North American stocks looked relatively calm in midday trading on Wednesday, providing a sense of relief to investors after Tuesday’s sharp drop.
Shortly after noon, the Dow Jones industrial average was up 12 points or 0.1 per cent, to 13,114. The broader S&P 500 was unchanged, at 1413. In Canada, the S&P/TSX composite index was down 8 points or less than 0.1 per cent, to 12,218.
The moves follow a relatively upbeat reading on China’s economy, which points to a soft-landing. The HSBC flash manufacturing purchasing managers’ index for October remained in contraction territory, but rose to a three-month high of 49.1.
In the United States, the Commerce Department reported that new home sales in September rose 5.7 per cent to an annual pace of 389,000 – slightly higher than expectations and the highest level in more than two years, providing more evidence that the housing market is recovering.
The Federal Reserve is set to deliver its monetary policy statement in the afternoon. But given that the central bank introduced bold stimulus measures last month, observers aren’t expecting any big policy changes this time around.
Within the S&P 500, financials rose 0.5 per cent and materials rose 0.4 per cent. Technology stocks fell 0.5 per cent, while utilities and energy stocks fell 0.2 per cent each.
Within Canada’s benchmark index, commodity producers continued to struggle: materials fell 0.4 per cent and energy stocks fell less than 0.1 per cent. Financials were flat and industrials rose 0.7 per cent.
Netflix Inc. slumped 14.1 per cent after reporting disappointing quarterly results on Tuesday after markets closed. However, Facebook Inc. soared more than 21 per cent – the biggest one-day jump since the social media company went public in May – after reporting better-than-expected revenue and demonstrating to investors that consumers are using Facebook on mobile devices.
Canadian Pacific Railway Ltd. rose 4.8 per cent after it reported earnings of $224-million, up 20 per cent over last year.