S&P/TSX composite up more than 400 points as oil tops US$80 a barrel

Gains in the energy sector as the price of oil rose above US$80 a barrel helped Canada's main stock index surge more than 400 points higher on the first day of the fourth quarter.

Gains in the energy sector as the price of oil rose above US$80 a barrel helped Canada’s main stock index surge more than 400 points higher on the first day of the fourth quarter, while U.S. stock markets also climbed higher.

The S&P/TSX composite index was up 436.97 points or 2.4 per cent at 18,881.19.

Markets started to rebound Monday after a tough third quarter, said Angelo Kourfakas, an investment strategist at Edward Jones.

“That is with the help of lower bond yields, which are helping fuel the rally,” he said.

In New York, the major indexes all gained more than two per cent. The Dow Jones industrial average was up 765.38 points at 29,490.89. The S&P 500 index was up 92.81 points at 3,678.43, while the Nasdaq composite was up 239.82 points at 10,815.44.

In the current volatile market, investors are interpreting every economic release through the lens of what it might mean for the central banks’ tightening campaign, said Kourfakas.

“The market thinks that the Fed won’t be able to hike as much as they are now communicating because the economy is weakening at a fast pace, or is about to weaken.”

Any sign that inflation is behind us is cause for optimism among investors that the Bank of Canada and Federal Reserve might ease off, he said.