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North American stock markets partly recover from uncertainty over Trump COVID test

TORONTO — North American stock markets partially recovered on Friday from deep early losses caused by uncertainty after U.S. President Donald Trump said he had tested positive for the coronavirus.

TORONTO — North American stock markets partially recovered on Friday from deep early losses caused by uncertainty after U.S. President Donald Trump said he had tested positive for the coronavirus. 

Markets nosedived after Trump tweeted that he and his wife have COVID-19, although an official said his symptoms are mild.

The markets later improved once House Speaker Nancy Pelosi suggested that a fiscal stimulus package deal was "imminent" and talked about help for the battered airline industry.

"As we've seen through the day, the markets have been kind of choppy, but I wouldn't necessarily say that we've had any kind of meaningful sell-off," said Philip Petursson, chief investment strategist at Manulife Investment Management.

"I would say this is an extension of the volatility that we saw in September ... Trump may be the catalyst for this, but the symptoms are more seasonal than anything else." 

The S&P/TSX composite index closed up 14.71 points to 16,199.25 after falling by as much as 178.84 points earlier in the day.

In New York, the Dow Jones industrial average was down 134.09 points at 27,682.81 after losing as much as nearly 434 points. The S&P 500 index was down 32.36 points at 3,348.44, while the Nasdaq composite was down 251.49 points at 11,075.02. 

Stock markets closed the trading week higher by between 0.8 and 1.9 per cent.

Petursson said the shifting market performance Friday reflects a tug of war between those who believe the Trump news is negative versus those who think it's benign.

At the heart of the decrease is uncertainty given Trump's age (74) and his weight, both of which would make him more prone to severe outcomes from the virus.

The fear among investors is if Trump, who polls say is trailing Joe Biden, becomes incapacitated, can't campaign or even function as president and has to pass the baton to Vice-President Mike Pence.

"So I think there's some speculation out there as to what is the worst-case outcome. And the worst-case outcome is that he won't be on the ticket come Nov. 3," Petursson said in an interview.

Trump's health "stole the headlines" from the monthly U.S. jobs report which, while disappointing, still saw the unemployment rate fall to 7.9 per cent as more people gave up looking for work.

Non-farm payroll rose by 661,000 in September as just over half the jobs lost in the spring have returned.

The TSX eked out a gain despite lower crude oil and gold prices.

Energy led the 11 major sectors, rising 1.1 per cent with Vermilion Energy Inc. up 5.7 per cent and Husky Energy Inc. up three per cent.

Shares of Suncor Energy Inc. climbed 2.9 per cent after the oil and gas giant said it would eliminate up to 1,930 jobs over the next 18 months. 

The November crude contract was down US$1.67 at US$37.34 per barrel and the November natural gas contract was down 8.9 cents at nearly US$2.44 per mmBTU. 

The Canadian dollar traded for 75.13 cents US compared with 75.23 cents US on Thursday. 

The influential financials sector rose nearly one per cent to help the TSX while telecommunications also moved higher.

"Financials being the largest weight on the TSX, that certainly is lifting the rest of the TSX into the green," said Petursson.

Technology, health care, materials and consumer staples were lower.

Materials dropped on lower gold prices.

The December gold contract was down US$8.70 at US$1,907.60 an ounce and the December copper contract was up 11.2 cents at almost US$2.98 a pound. 

This report by The Canadian Press was first published Oct. 2, 2020. 

Companies in this story: (TSX:VET, TSX:HSE, TSX:SU, TSX:GSPTSE, TSX:CADUSD=X) 

Ross Marowits, The Canadian Press