TORONTO - The Toronto stock market shook off early losses to close positive Tuesday as buyers moved in on beaten down energy stocks following a string of steep declines.
The S&P/TSX composite index came back from an early triple-digit slide to advance 35.77 points to 14,898.53 as traders speculated about what the U.S. Federal Reserve might have to say about the pace of interest rate hikes.
The Canadian dollar was up 0.02 of a U.S. cent at 78.27 cents.
U.S. indexes were mainly lower with the Dow Jones industrials down 128.34 points at 17,849.08 and while the S&P 500 index off 6.99 points at 2,074.2. The Nasdaq was 7.92 points higher at 4,937.43.
The Federal Reserve started its two-day meeting on interest rates Tuesday. Traders will be watching to see whether the central bank removes the reference to "patience" in hiking rates from near zero.
There has been much speculation the bank could hike in June or September, but Ian Nakamoto, director of research at 3MACS, says the month doesn't really matter.
"For me, it's more a matter of is there going to be a rapid rise in rates," Nakamoto said.
The TSX energy sector has plunged almost 12 per cent this month as supply issues continued to drive the price of crude closer to US$40 a barrel. But on Tuesday, the sector gained almost one per cent even as April crude on the New York Mercantile Exchange fell for a sixth session, down 42 cents to US$43.46.
Prices had found support around $50, but the International Energy Agency warned last week that the recent stability in prices at that level was likely premature.
"(The) rally in oil was because of the unusually cold winter so demand was unusually high for a period," Nakamoto said.
"Now we're coming into the spring season, we are back at normal weather and the tanks keep filling. The irony is if there weren't as many storage tanks, maybe the bottom (in prices) would have already been reached."
The base metals sector also erased early losses, up 0.45 per cent, even as May copper fell three cents to US$2.63 a pound.
The consumer staples sector was also supportive, ahead 0.75 per cent. Convenience store operator Alimentation Couche-Tard Inc. (TSX:ATD.B) will acquire Shell's retail, commercial and aviation fuels businesses in Denmark for an undisclosed sum. The company also reported a quarterly profit of US$248.1 million or 44 cents per share, up from US$182.3 million or 32 cents per share a year ago. Revenue totalled $9.1 billion, down from $11.1 billion and its shares rose $1.11 to $49.24.
The gold sector lost 1.35 per cent as April bullion moved down $5 to US$1,148.20 an ounce.
Elsewhere on the corporate front, Bombardier Inc. (TSX:BBD.B) shares dipped a penny at $2.48 as the transport giant signed a letter of intent to sell 20 of its CS100 aircraft to Malaysian carrier Fly Mojo. A firm order would be worth US$1.47 billion, but could grow to $2.94 billion if options for an additional 20 CS100 planes are picked up. Bombardier now has letter of intent and firm commitments for 603 of its CSeries aircraft family of jets, which also includes the larger CS300.