Business

TSX closes higher on final day of difficult year for the market

Canada's main stock index closed higher along with U.S. markets on the final day of trading of what has been a difficult year for stocks.

The S&P/TSX composite index declined 12% overall in 2018

In this Dec. 28 photo, trader Jonathan Corpina works on the floor of the New York Stock Exchange. North American stocks moved higher on the last day of what has otherwise been a volatile year. (Richard Drew/Associated Press)

Canada's main stock index closed higher along with U.S. markets on the final day of trading of what has been a difficult year for stocks.

The S&P/TSX composite index closed up 100.86 points, at 14,322.86, as part of a late-December rally. But it wasn't enough to stave off significant losses for the year.

The index ended down 12 per cent for 2018 after declines that started in the summer gained momentum as trade disputes and slowing global growth stoked fears of a recession.

Declines accelerated in December, pushing the index down to as low as 13,776.90 on Christmas Eve, before staging a modest rally in the final days of the year.

The drop, especially in the final month of the year, caught most market-watchers off-guard.

"We all felt as though the market was a little ahead of itself, or maybe in some instances a lot ahead of itself," said Allan Small, senior investment adviser at HollisWealth.

He said the economy has slowed somewhat, but is still healthy and he expects more of a minor stock correction than a major economic crisis.

"Lot of people are talking about recession, but I don't think a recession's anywhere in the short term. What I think you have is a bear market without the recession."

Investors, however, will have to get used to the recent volatility as a major trade dispute with China hits a deadline in the new year, while Democrats take hold of the U.S. House of Representatives.

"I think it just stirs the pot a little more," said Small.

Investors did get some positive sentiment on the trade front after U.S. President Donald Trump tweeted that he had a positive discussion with Chinese President Xi Jinping, said Small.

"President Trump tweeted out over the weekend that he spoke with the Chinese president, everything seems positive, he seemed optimistic in his tweet that they're working towards some sort of trade deal."

The news helped send the Dow Jones industrial average up 265.06 points at 23,327.46. The S&P 500 index ended up 21.11 points higher at 2,506.85, while the Nasdaq composite was up 50.76 points at 6,635.28.

U.S. stocks still ended down for the year for their worst showing in a decade. The S&P 500 ended down 6.2 per cent, the Dow down 5.6 per cent.

The Canadian dollar averaged 73.30 cents US, down 0.02 of a US cent from Friday.

The February crude contract closed up eight cents at $45.41 US per barrel and the February natural gas contract was down 36 cents at $2.94 US per mmBTU.

The February gold contract was down $1.70 at $1,281.30 US an ounce, and the March copper contract was down five cents at $2.63 US a pound.

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