TORONTO -- Canada's main stock index lost ground to start the week on Monday while strong earnings and positive trade sentiment pushed the S&P 500 in the United States to a record high.
In Toronto, the S&P/TSX composite index closed down 16.96 points at 16,387.53.
Markets south of the border climbed as third-quarter corporate results continued to beat expectations and the U.S. and China both pointed to progress in reaching a deal on Phase 1 of a trade agreement.
In New York, the Dow Jones industrial average gained 132.66 points to close at 27,090.72. The S&P 500 index closed up 16.87 points at 3,039.42 after reaching a record high of 3,044.08 in earlier trading. The Nasdaq composite was up 82.87 points at 8,325.99, less than 10 points from setting a new record high.
Shares of Microsoft Corp. gained 2.5 per cent to help all three markets after the tech giant beat Amazon for the Pentagon's US$10-billion cloud computing contract.
Overall, U.S. markets primarily benefited from corporate results which pointed to continued momentum in the U.S. economy despite earlier fears of an impending recession, said Craig Fehr, Canadian markets strategist, Edward Jones.
The trade sentiment is also helping but there will undoubtedly be some setbacks in the future as the world's two largest economies try to hammer out a wide-ranging deal that includes thorny issues like intellectual property.
U.S. President Donald Trump touted the stock market movement.
"This is a big win for jobs, 401-K's and frankly everyone!" he tweeted.
Eight of the 11 major sectors on the TSX were lower led by materials, which lost ground on trade talk progress and anticipation of the U.S. Federal Reserve again cutting interest rates this week.
The key sector lost 1.3 per cent on lower gold prices as Yamana Gold Inc. and Eldorado Gold lost 3.35 and 3.2 per cent respectively.
The December gold contract was down US$9.50 at US$1,495.80 an ounce and the December copper contract was up 0.75 of a cent at US$2.68 a pound.
Lower crude oil prices also pulled down the energy sector with Crescent Point Energy Corp. losing 3.5 per cent and Encana Corp. down 2.2 per cent.
The December crude contract was down 85 cents at US$55.81 per barrel and the December natural gas contract was up 9.6 cents at US$2.56 per mmBTU.
Oil prices fell despite the positive trade sentiment on weak Chinese industrial data, said Fehr.
The Canadian dollar traded for an average of 76.59 cents US, the highest level since July 17 and compared with an average of 76.56 cents US on Friday.
Fehr said the rest of the week will give a clearer picture of the economy's health with interest rate decisions by the U.S. Federal Reserve and the Bank of Canada, along with GDP data and jobs reports.
This report by The Canadian Press was first published Oct. 28, 2019.
