TSX jumps 2 pct as oil rally boosts energy stocks

In Toronto, Sept 16 Canada’s main stock index ended sharply higher on Wednesday, with energy stocks surging 5 percent as crude oil bounced and investors brace for a pivotal U.S. Federal Reserve rate decision. At midafternoon, the S&P/TSX index was up 253.24 points at 13,715.95, adding to a 109-point gain on Tuesday. Oil prices took on $1.18 a barrel to $45.77 U.S.

“The last few weeks of August were a bit of a Draconian sell-off and I think what we’re seeing now is somewhat of a relief rally”, said George Schultze, who oversees $200-million as founder and managing member of Schultze Asset Management in Purchase, NY.

Hewlett-Packard may also be in focus after the tech firm said on Tuesday that it expected to cut a further 25,000 to 30,000 jobs in its enterprise business. The consumer-price index dropped 0.1 per cent, the first decline since January.

A 15-per-cent plunge in energy costs over the past 12 months and a rising dollar are acting as a brake on inflation that the Fed views as temporary.

Data Wednesday showed prices paid by American households declined in August as cheaper gasoline helped keep inflation below the objective of Fed policy makers.

The Dow Jones industrial average soared 146.51 points to 16,517.47, while the S&P 500 advanced 15.05 points to 1,968.08 and the Nasdaq was ahead 35.37 points at 4,841.14.

Moreover, the nation’s number crunchers reported that manufacturing sales rose 1.7% to $52.2 billion in July, on the backs of motor vehicle parts and motor vehicle assembly industries.

Continued strength in retail spending is contributing to a strengthening USA economy and will be among the data weighed by the Fed as it decides whether to start raising interest rates. “So the question is: Can the Fed ignore what’s happening in the rest of the world?” Another alarm bell sounded Wednesday for the future of print newspapers in Canada when one of the country’s largest and oldest dailies announced the end of its printed weekday edition nearly three years after introducing a free digital tablet edition. The S&P 500 has had moves of at least 1 per cent in more than 10 sessions since August,20. “We’re in a situation where everybody knows a rate hike is coming and, in some ways, the Fed might be better served by just getting it over with”, he said.