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TORONTO — A surge in Shopify shares powered the technology sector higher as the bounce in sa¹ú¼Ê´«Ã½'s largest market index continued for a fourth day.

The S&P/TSX composite index closed up 82.96 points to 19,020.67. 

In New York, the Dow Jones industrial average was up 47.79 points at 31,874.84. The S&P 500 index was up 23.21 points at 3,959.90, while the Nasdaq composite was up 184.50 points at 11,897.65. 

Greg Taylor, chief investment officer of Purpose Investments, said the rally follows last week's activity that was "a little too risk-off" as sentiment got really low.

"It feels like this week people are having more second thoughts about that and coming back to the markets and we're seeing a decent bounce back in some of the areas that got hurt the most in the last few weeks," he said in an interview.

Oil stocks have been leading the TSX for much of the year, banks have shown some strength in the past few days and tech stocks are doing a little better.

"I think some of this plays into positioning as people just got a little too bearish and the sentiment got too washed out."

Early U.S. earnings reports haven't been as bad as some had feared. For example, Netflix surpassed forecasts of another disastrous quarter and the stock enjoyed a relief rally.

"That's spread over to the rest of some of these really beaten up tech stocks and that's given a general more risk-on mood to markets."

Technology gained 4.9 per cent on the TSX with Shopify Inc. up 12.3 per cent and Lightspeed Commerce Inc. up 7.8 per cent.

Health care was the midweek leader, rising 5.8 per cent as shares of Canopy Growth Corp. gained 17.3 per cent and Tilray Inc. was 11.4 per cent higher.

Energy was higher even though crude oil prices dipped as natural gas prices reached their highest level since 2008.

The September crude contract was down 86 cents at US$99.88 per barrel and the August natural gas contract was up 74.3 cents at US$8.01 per mmBTU. 

Birchcliff Energy Ltd. and Advantage Oil & Gas Ltd. were up 4.0 and 3.4 per cent, respectively.

Taylor said oil has been bouncing around because of the rumblings about what's going on with the Russian pipeline to Germany.

Natural gas had a really good day due to the heat wave that's increasing energy use for cooling.

"Most Canadian producers are more skewed to natural gas than oil and that's why we're seeing a decent move higher in some of these natural gas names," he said.

The Canadian dollar traded for 77.62 cents, compared with 77.50 cents US on Tuesday.

While some of the riskier parts of the market seems to be coming back, Taylor said the best sector in the last few days has been energy, which has come off an "ugly" June after leading for most of the year.

Energy companies will start reporting quarterly results next week and some analyst preview reports suggest the numbers are going to be strong.

"The companies are going to be able to reward investors with more dividends and I think that's catching a lot of attention and bringing people back to this space." 

Materials was the weakest sector on the day as gold prices continued to fall despite ongoing inflation concerns. First Quantum Minerals Ltd. lost 7.4 per cent while West Fraser Timber Co. Ltd. increased another 5.5 per cent a day after a report said a company shareholder is looking at making a takeover bid.

The August gold contract was down US$10.50 at US$1,700.20 an ounce and the September copper contract was up 3.4 cents at nearly US$3.33 a pound. 

Taylor said everyone is trying to figure out if this is another bear market rally that lasts a week or two or has longer legs even though summer trading volumes are lower.

"I think on average most people are rather defensively positioned right now and out of the market and holding little more cash. And if the market works ... I think that could cause some shortcovering and allocations to come in and push it further than most people are expecting."  

This report by The Canadian Press was first published July 20, 2022. 

Companies in this story: (TSX:BIR, TSX:ARX, TSX:WEED, TSX:TLRY, TSX:SHOP, TSX:LSPD, TSX:FM, TSX:WFG, TSX:GSPTSE, TSX:CADUSD=X) 

Ross Marowits, The Canadian Press