North American stocks were mixed in midday trading on Tuesday, but showed signs of stability after Monday’s sharp selloff shook confidence in the ongoing bull market.
The S&P 500 was up 2 points or 0.1 per cent, to 1490, a day after it suffered its biggest one-day drop since early November. The blue-chip Dow Jones industrial average was up 70 points or 0.5 per cent, to 13,854. In Toronto, the S&P/TSX composite index was down 25 points or 0.2 per cent, to 12,628.
The moves followed assurances from Ben Bernanke, chairman of the Federal Reserve, that the central bank’s view on stimulus remains the same. In testimony before the Senate Banking Committee, Mr. Bernanke said the asset purchases – known as quantitative easing, or QE – were not raising concerns about risk-taking or inflation.
Recently released minutes from the last Fed policy meeting had suggested that some committee members were growing concerned about the costs associated with quantitative easing, raising concerns that Fed stimulus could end sooner than expected.
Meanwhile, the Conference Board’s consumer confidence index rose to 69.6 in February, up from a revised 58.4 in January and well-ahead of expectations.
The U.S. housing market also looked upbeat. New home sales in January rose 15.6 per cent, month-over-month, topping expectations. As well, the S&P/Case-Shiller home price index for 20 U.S. cities rose 6.84 per cent in December, year-over-year.
Within the S&P 500, telecom stocks rose 0.8 per cent, consumer discretionary stocks rose 0.4 per cent, and industrials rose 0.2 per cent. Financials and technology stocks fell 0.1 per cent each.
Within Canada’s benchmark index, materials rose 1 per cent after the price of gold jumped to $1,612 (U.S.) an ounce, up $19 for its biggest one-day gain of the year. Energy stocks fell 0.9 per cent after crude oil fell to $92.30 a barrel, down 81 cents. Financials fell 0.2 per cent.
Bank of Montreal rose 1.1 per cent after it reported a first-quarter profit of $1.53 (Canadian) a share, down from $1.65 a year ago. However, earnings beat expectations on an adjusted basis, and the bank boosted its quarterly dividend by 2 cents.