North American stocks rebounded from earlier lows on Wednesday in midday trading after investors turned optimistic on U.S. budget talks in Washington.
Shortly after noon, the S&P 500 was up 3 points or 0.3 per cent, to 1402 – recovering from a 1385. The blue-chip Dow Jones industrial average was up 44 points or 0.3 per cent, to 12,922. In Canada, the S&P/TSX composite index was down 16 points or 0.1 per cent, to 12,096.
The turnaround followed remarks from John Boehner, the Republican House Speaker, who told reporters that budget talks can “avert this crisis sooner rather than later.” As well, President Barack Obama said he hoped a deal could be reached before Christmas.
A deal is necessary to avoid the so-called fiscal cliff of automatic tax increases and spending cuts that will kick in in the New Year, threatening the push the U.S. economy into recession. The fiscal cliff has been an on-again, off-again concern among investors for the past couple of months.
Within the S&P 500, consumer stocks showed the biggest gains, with staples and discretionary stocks up 0.6 per cent each. Industrials and energy stocks rose 0.5 per cent each.
In Canada, commodity producers continued to drag on the benchmark index: Energy stocks fell 0.6 per cent and materials fell 0.5 per cent.
Among commodities, gold fell to $1,717 (U.S.) an ounce, down $25. Crude oil fell to $86.07 a barrel, down $1.11.
In Europe, the U.K.’s FTSE 100 rose less than 0.1 per cent and Germany’s DAX index rose 0.2 per cent.