TORONTO -- Canada's main stock index followed a strong January performance by starting the month lower despite crude oil prices hitting an almost 11-week high.
Investors pocketed some profits and took a pause after the Toronto market gained 8.5 per cent in January for its best start in at least 14 years, says Kevin Headland, senior investment Strategist at Manulife Investments.
"We just had one of the best months we've seen in awhile, especially the TSX 1/8which was 3/8 one of the best performing markets around the world, so I think it's just kind of a breather," he said in an interview.
The S&P/TSX composite index closed down 34.29 points to 15,506.31 after falling from morning high of 15,568.98.
It was driven down by the materials sector, which fell on lower metals prices.
The April gold contract was down US$3.10 at US$1,322.10 an ounce and the March copper contract was down 1.15 cents at US$2.77 a pound.
The energy sector fell 0.7 per cent even though the price of West Texas Intermediate rose to surpass US$55 a barrel for the first time since mid-November. Imperial Oil led the decline, falling by 4.7 per cent, followed by Barrick Gold Corp. Shopify Inc. rose by nearly one per cent.
The March crude oil contract was up US$1.47 at US$55.26 per barrel and the March natural gas contract was down eight cents at US$2.73 per mmBTU.
The Canadian dollar traded at an average of 76.37 cents US, the highest level since Nov. 7, and compared with an average of 76.08 cents US on Thursday.
The health care sector gained 1.8 per cent as several cannabis companies saw their share prices rise in heavy trading. Aphria Inc. rose more than 10 per cent, followed by Aurora Cannabis Inc., Cronos Group Inc. and The Green Organic Dutchman Holdings.
In New York, the Dow Jones industrial average was up 64.22 points at 25,063.89. The S&P 500 index was up 2.43 points at 2,706.53, while the Nasdaq composite was down 17.87 points at 7,263.87.
The S&P was affected by disappointed results from Amazon while the Dow gained on strong jobless numbers that saw the U.S. economy add 304,000 jobs in January to mark the 100th straight month of jobs growth.
Headland doesn't believe Friday's decrease in the TSX signals a repeat of last year's performance when geopolitical risk was more acute, the Federal Reserve was much more hawkish and valuations were higher.
"I would expect February to be probably a decent month, not as good as January and really predicated on the rest of the earnings coming out in the U.S. and of course Canada," he said.
"And as long as those numbers meet expectations and economic data and geopolitical risk remains as expected we should see a fairly normal February."
