Stocks held onto big gains in midday activity on Wednesday, with markets expecting central banks to come to the rescue as the global economy continues to falter.
At noon, the Dow Jones industrial average was up 206 points or 1.7 per cent, to 12,334. The broader S&P 500 was up 23 points or 1.8 per cent, to 1,308. In Canada, the S&P/TSX composite index was up 164 points or 1.4 per cent, to 11,672.
There was little concrete evidence that major central banks were drawing up plans to give the economy a boost, following a series of disappointing reports from Europe and the United States in recent weeks. However, suggestions that it has left doors open to more stimulus was enough for investors.
The European Central Bank's Mario Draghi left Europe’s key interest rate unchanged on Wednesday, but said he was ready to act if the region's growth outlook dims. And Federal Reserve official (and head of the Reserve Bank of Atlanta) Dennis Lockhart said that extending the Fed's so-called Operation Twist – a stimulative move that involves selling short-term bonds and buying longer-term bonds – was still an option.
The stock market gains were broad, but heavily favoured the more economically sensitive areas. Within the S&P 500, energy and financials led the way, rising 2.5 per cent each. Information technology stocks rose 2.1 per cent and materials rose 2 per cent.
Within Canada's benchmark index, energy stocks rose 2.2 per cent, materials rose 1.9 per cent and industrials rose 1.5 per cent.
In Europe, the gains were also big. The U.K.'s FTSE 100 rose 2.4 per cent and Germany's DAX index rose 2.1 per cent.