North American stocks were near session highs in midday trading on Tuesday, with investors apparently unconcerned about rising European bond yields and instead focused on hopes for policy stimulus from the U.S. Federal Reserve - again.
At noon, the Dow Jones industrial average was up 96 points or 0.8 per cent, to 12,507, after a relatively flat start to the day. The broader S&P 500 was up 8 points or 0.6 per cent, to 1317. In Canada, the S&P/TSX composite index was up 41 points or 0.4 per cent, to 11,443.
Bloomberg News reported that Charles Evans, the head of the Federal Reserve Bank of Chicago, said he would support more stimulus - rekindling expectations that the Fed will make some sort of effort to give the flagging U.S. economic recovery a boost. Despite similar hopes last week, Fed chairman Ben Bernanke offered few concrete hopes that any such stimulus was in the works.
Within the S&P 500, most of the 10 subindexes were higher, led by economically sensitive areas. Industrials rose 1 per cent, materials rose 0.9 per cent and energy stocks rose 0.8 per cent. Defensive areas trailed.
In Canada, materials showed by far the biggest gains, rising 1.8 per cent with support from gold producers and fertilizer producers. Energy stocks and industrials rose 0.6 each, while financials rose 0.5 per cent.
Tuesday's gains come despite ominous signs in Europe, where bond yields rose sharply, pushing Italian and Spanish borrowing costs higher. The yield on Spain's 10-year government bond jumped to 6.65 per cent, up more than 18 basis points (there are 100 basis points in a percentage point). The yield on Italian 10-year government bonds rose to 6.14 per cent, up nearly 14 basis points.
Despite the tremors in the government bond market, European stocks fared relatively well. Among major indexes, the U.K.'s FTSE 100 rose 0.8 per cent and Germany's DAX index rose 0.3 per cent.Report Typo/Error