North American stocks were higher in midday trading on Tuesday, ahead of a slew of decisions later in the week that could have an impact on the global economy.
Shortly after noon, the Dow Jones industrial average was up 83 points or 0.6 per cent, to 13,338. The broader S&P 500 was up 6 points or 0.4 per cent, to 1435. In Canada, the S&P/TSX composite index was up 13 points or 0.1 per cent, to 12,229.
Moody’s Investors Service said that it could downgrade the U.S. credit rating if the country does not cut its debt as a percentage of gross domestic product in the next budget negotiations. Standard & Poor’s cut the U.S. rating last year, creating a flutter of volatility as economists and investors digested the implications.
But most of the attention seemed to be on the near future. On Thursday, the U.S. Federal Reserve will release its latest monetary policy, and many observers are expecting the central bank to produce a stimulus plan – either by extending its commitment to keeping interest rates exceptionally low or by another round of government bond-buying, also known as quantitative easing.
In Europe, Germany’s constitutional court said it would rule on Wednesday on whether the country will participate in the euro zone’s permanent €500-billion bailout fund. And Greek politicians are set to meet to discuss ways to cut spending in a prelude to financial assistance.
Germany’s DAX index rose 1.3 per cent but the U.K.’s FTSE 100 was relatively unchanged.
Within the S&P 500, energy stocks were the biggest movers, rising 0.9 per cent. Telecom stocks rose 0.7 per cent, while materials and industrials rose 0.6 per cent each. Economically defensive stocks lagged, with utilities and consumer staples relatively flat.
Within Canada’s benchmark index, industrials rose 0.5 per cent, while energy stocks and materials rose 0.4 per cent each. Financials fell 0.2 per cent.