NEW YORK – North American stocks edged higher on the first trading day of the new year, recovering from earlier losses, after December’s market rout left investors nervous.
Weak manufacturing data from China on Wednesday continued to fuel concerns about slowing demand from the world’s second largest economy, which could lead to slowing global growth, reported Associated Press.
The Caixin/Markit manufacturing purchasing managers’ index (PMI) for December showed the country’s manufacturing sector shrank for the first time in 19 months.
“We think that growth in the U.S. and Chinese economies will slow in 2019, and by more than investors are discounting, causing equity prices to fall in both cases,” said Oliver Jones, markets economist at Capital Economics, in a report.
In Canada, the S&P/TSX composite index recovered from earlier losses to trade up 0.5 per cent to 14,391.30 points in the afternoon. The benchmark index lost 12 per cent last year, with a swift downturn in the last three months of 2018, following the global trend.
Healthcare stocks led the gains on Wednesday, with shares of marijuana producers Canopy Growth and Cronos Group both up more than six per cent.
The energy sector was also higher as oil prices rallied on news that Saudi Arabia was following through with a pledge to cut exports in order to ease the global supply glut.
The price for the benchmark U.S. oil contract — West Texas Intermediate — was up more than four per cent in New York to $47.41 US.
The Canadian dollar rose with the oil prices, up to 73.63 cents US, compared with an average of 73.30 cents US on Monday.
In other commodities, the price of gold jumped as investors fled to safe havens amid worries about global growth. Gold hit a six-month high, near $1,300 US an ounce after the Chinese manufacturing data came out.
Markets in the U.S. reversed earlier losses in the afternoon to all trade higher. The tech-heavy Nasdaq composite led the gains in New York and was up by 0.6 per cent to 6,677.96 points.
But, shares of Tesla plunged nearly seven per cent on the Nasdaq after the electric carmaker cut vehicle prices by $2,000 US, and its fourth quarter sales figures fell below expectations.
