The Toronto stock market remained in positive territory Monday as traders hoped for hints this week about when the U.S. Federal Reserve may move on hiking interest rates.
The S&P/TSX composite index was ahead 45.16 points to 15,349.40. The Canadian dollar was unchanged at 91.84 cents (U.S.).
New York’s Dow industrials jumped 153.03 points to 16,815.94, the Nasdaq gained 39.11 points to 4,504.04 and the S&P 500 index rose 15.11 points to 1,970.17.
The Fed has kept short term interest rates near zero since the financial crisis of 2008-2009.
Traders will initially look to the Fed’s minutes from its latest meeting on rates on Wednesday.
They’ll also look to Friday when Fed chair Janet Yellen delivers the keynote speech at the central bank’s annual meeting in Jackson Hole, Wyo., which has been the scene of other major announcements.
“And in particular, they remember back two years ago signalling the next round of quantitative easing (so) I can understand why people are so focused on it,” said David Wolf, portfolio manager in the Global Asset Allocation group at Fidelity Investments, adding he doesn’t think markets will end up any the wiser about rates.
“The (Fed) keeps on drilling it into us it is data dependent, not calendar dependent, and the data have been evolving, generally in a positive direction that suggests that tightening is on the visible horizon. Anything more specific is just sort of market chatter that should be tuned out.”
One reason higher rates are a concern is that investors could be tempted to put more of their money in investments with a higher guaranteed rate of return.
Inflation plays a big part in when rates will start to head higher and traders will also consider the latest reading on the U.S. consumer price index on Tuesday. Economists looked for inflation to come in at an annualized rate of two per cent.
Sentiment was also helped along after the Russian and Ukrainian foreign ministers held talks in Berlin over the weekend. The discussions were aimed at ratcheting down tensions in eastern Ukraine, where pro-Russian militias have been battling Ukrainian forces.
Meanwhile, the bidding heated up for U.S. discount chain Family Dollar. Dollar General Corp. said that it will pay $78.50 (U.S.) per share in cash, three per cent higher than Family Dollar Stores Inc.’s Friday closing price. Dollar General put the deal’s value at $9.7-billion.
Last month Dollar Tree Inc. made an $8.5-billion bid for Family Dollar.
The tech sector led advancers with BlackBerry Ltd. ahead 14 cents to $10.61 (Canadian) as the company said that it has created a new business unit that will combine some of its most innovative technology, including QNX embedded software, Certicom cryptography applications and its patent portfolio.
The financial sector climbed 0.6 per cent ahead of the start of a series of earnings reports coming in from the big banks. Royal Bank reports Friday and its shares climbed 56 cents to $80.41.
The metals and mining sector gained 0.35 per cent while September copper was unchanged at $3.10 (U.S.) a pound.
The energy sector was the major decliner, falling one per cent as September crude dropped $1.29 to $96.06 a barrel, near its lowest since April after fears of supply disruptions from major producer Iraq faded, removing much of the risk premium that built up in May and June.
The gold sector also pressured the TSX, down 0.5 per cent while a lessening of geopolitical tensions pushed December bullion down $6.70 to $1,299.50 an ounce.