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TORONTO — Strong U.S. earnings and supportive economic data powered North American stock markets higher with Canada's main index hitting a one-month high.

Although there weren't any real headline-grabbing developments that shot markets higher Thursday, investors who were cautious are pleasantly surprised that increasing oil prices and bond yields don't appear to have had an impact on large companies reporting third-quarter results, said Macan Nia, senior investment strategist at Manulife Investment Management. 

"Not only are they (earnings) beating expectations, but the forward guidance is positive and that has given markets a reason to be optimistic going into the end of the year and entering the new calendar year," he said in an interview.

The S&P/TSX composite index closed up 201.47 points to 20,819.94, after reaching an intraday high of 20,840.33 that was the highest level since Sept. 9.

In New York, the Dow Jones industrial average was up 534.75 points at 34,912.56. The S&P 500 index was up 74.46 points at 4,438.26, while the Nasdaq composite was up 251.79 points at 14,823.43. 

Also contributing to the positive sentiment was an easing of bond yields and the Biden administration's approval for the Los Angeles Port to operate 24 hours a day in the hopes of decreasing congestion that has contributed to supply chain disruptions, Nia said.

"I think the markets are looking at that development out of the L.A. Port Authority as a positive in terms of getting these goods into the hands of consumers so they can purchase them. And obviously, that will help earnings going forward."

Sentiment was also supported by Canadian manufacturing sales rising 0.5 per cent in August from July, on higher sales of petroleum, coal, chemicals and primary metals. In the U.S., first-time benefit claims dipped below 300,000 last week for the first time during the pandemic.

Although earnings growth likely peaked during the summer, Nia said economic activity remains robust in the middle of October.

"And that's something that is giving investors something to cheer about as we go into the end of the year," he said.

September is typically a volatile month for markets and is followed by a recovery before hitting a so-called Santa Claus rally in December.

Worries about high inflation seem to have taken a back seat, at least for the day. 

Nine of the 11 major sectors on the TSX were higher, with six ending the day up more than one per cent. Consumer staples and real estate were slightly lower.

Energy led, climbing 2.2 per cent as shares of Enerplus Corp. gained 5.3 per cent, MEG Energy Corp. was up 4.7 per cent and Crescent Point Energy Corp. was 4.3 per cent higher.

Oil prices rose above US$81 per barrel even as U.S. stockpiles increased more than expected last week as refinery activity declined sharply.

Nia said an improving economic environment and improving demand amid a supply-demand imbalance continue to be a tailwind for prices.

The November crude contract was up 87 cents at US$81.31 per barrel and the November natural gas contract was up 9.7 cents US$5.69 per mmBTU. 

"We believe that demand will continue to improve as we just really get through this COVID," he said, pointing to higher oil prices and a corresponding rise in the loonie.

"We think that we still have more upside from these levels, but it's not going to be this type of increase that we've seen over the past year, but there is still upside left for the price of oil based on our models."

The Canadian dollar traded for 80.83 cents US compared with 80.35 cents US on Wednesday. 

Consumer discretionary increased 1.55 per cent as shares of Aritzia Inc. surged 17.2 per cent after the Vancouver clothing retailer reported very strong results that handily beat expectations.

Materials increased 1.3 per cent on higher metals prices with Lundin Mining Corp. up 5.5 per cent and Oceanagold Corp. up four per cent.

The December gold contract was up US$3.20 at US$1,797.90 an ounce and the December copper contract was up 11.55 cents at US$4.63 a pound. 

A dip in bond yields helped the technology sector, with Lightspeed Commerce Inc. rising 5.1 per cent and BlackBerry Ltd. moving 4.2 per cent higher.

This report by The Canadian Press was first published Oct. 14, 2021. 

Companies in this story: (TSX:BB, TSX:LSPD, TSX:LUN, TSX:OGC, TSX:ERF, TSX:MEG, TSX:CPG, TSX:ATZ, TSX:GSPTSE, TSX:CADUSD=X) 

Ross Marowits, The Canadian Press