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Specialist trader Michael O'Connor gives a price to traders on the floor at the New York Stock Exchange, April 3, 2013. (Brendan McDermid/Reuters)
Specialist trader Michael O'Connor gives a price to traders on the floor at the New York Stock Exchange, April 3, 2013. (Brendan McDermid/Reuters)

Inside the Market

At the open: Stocks mount tepid recovery as gold regains footing Add to ...

Stocks snapped back from the pounding they took Monday, inspired by a modest recovery in gold prices and some better-than-expected U.S. economic data and blue chip corporate earnings.

But the gains weren't nearly enough to erase the slaughtering the main indexes took a day earlier.

In early trading, the S&P/TSX composite index was up 88 points, or 0.7 per cent, at 12,093; the S&P 500 was up 11 points, or 0.6 per cent at 1,563; and the Dow Jones industrial average was up 96 points, or 0.6 per cent, at 14,696.

The COMEX June gold contract was up $33, or 2.4 per cent, at $1,395 (U.S.) per ounce at the start of the North American trading day after briefly tip-toeing above $1,400. It was, of course, only a minor victory; bullion has plunged 13 per cent over the last two trading sessions. Silver futures were up 1.7 per cent, but other commodities were more sluggish. Copper was nearly flat and crude oil down 0.1 per cent. 

Nevertheless, investors are regaining some of their confidence this morning after the tumultuous start to the week.

The panic selling seen in gold Monday has evaporated, and there's lots of talk today that prices have fallen so far that it will inspire a surge in physical buying - which should eventually end up supporting the market. Indeed, bargain hunting is on a lot of people's minds; Barrick Gold Corp. is up about 2.5 per cent and Kinross Gold nearly 5 per cent.

U.S. and Canadian stock markets saw a wave of fresh selling into the close on Monday after news of the deadly explosion at the finish line of the Boston Marathon further rattled nerves. The S&P/TSX fell 332 points and the Dow 265 points, their worst declines of the year. While suspected to be a terrorist act, the situation appears to be contained to just the two bombs that went off Monday afternoon, and not part of a bigger plot that could have further drained confidence in equity markets.

Economic news this morning has been largely supportive and indicative of an economy slowly picking up pace.

New home starts in the U.S. rose 7 per cent last month to a  1,036,000-unit annual rate, the highest level since 2008. Industrial production, meanwhile, grew 0.4 per cent in March, double the 0.2 per cent rise expected by economists.

And the latest reading on U.S. inflation gave the Federal Reserve little reason to be concerned that quantitative easing measures are igniting price acceleration in the economy. U.S. consumer prices dropped 0.2 per cent in March after a 0.7 percent jump in February. Analysts were expecting a flat reading. The core measure, which excludes volatile food and energy costs, rose 0.1 per cent, less than forecast.

Most of the big earnings reports today came in strong than expected. But retailer Target Corp. warned first-quarter earnings would miss expectations, sending its stock down 0.7 per cent at the open.

Goldman Sachs Group Inc. reported a stronger-than-expected 5.5 per cent rise in quarterly profit as it earned more from underwriting fees and its investing and lending business. Shares opened up but quickly headed south, and at least check were trading down 1 per cent.

Johnson & Johnson said its adjusted earnings were $1.44 per share in the first quarter, better than the $1.40 expected by analysts. Shares are up 1 per cent.

Coca-Cola said adjusted first-quarter earnings were 46 cents per share, topping analysts’ average estimate of 45 cents. Shares are up 4 per cent.

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