The Toronto stock market registered a solid gain Tuesday following the debut appearance before Congress by the new chairwoman of the U.S. Federal Reserve.
The S&P/TSX composite index was ahead 72.49 points to 13,866.67 as Janet Yellen said she expects a “great deal of continuity” with her predecessor, Ben Bernanke.
Yellen signalled she supports his view that the economy is strengthening enough to withstand a pullback in stimulus, but that rates should stay low to fuel further growth.
The Canadian dollar was up 0.12 of a cent to 90.58 cents (U.S.) as traders also looked ahead to a new budget from the Conservative government after the market close.
New York indexes were also positive as the Dow Jones industrials gained 92.09 points to 15,893.88, while the Nasdaq was up 14.12 points to 4,162.29. The S&P 500 index added 7.85 points to 1,807.69.
So far, the Fed has moved twice over the last two months to cut its bond buying program by a total of $20-billion to $65-billion (U.S.) and analysts generally expect the Fed to continue cutting by $10-billion every meeting.
Yellen’s remarks to the House Financial Services Committee have been highly anticipated, particularly with U.S. employment data for January falling well short of expectations last week and fresh worries about how emerging markets are dealing with Fed tapering.
“I think it just built up the wall of worry that we spent all year last year knocking down,” said Philip Petursson, director of institutional equities at Manulife Asset Management.
“Markets just want some reassurance and it looks like they’re getting it.”
Traders also braced for what could be some further negative news from China after data last week showed the manufacturing sector in the world’s second-biggest economy still expanding but at a slower pace.
Meagre trade growth is expected when import and export data is released Wednesday. Inflation data comes out the next day and Barclays Research said it expects inflation to moderate to 2.3 per cent year over year in January from 2.5 per cent in December, thanks in large part to lower food inflation.
On the earnings front, Cineplex Inc. had $20.2-million of net income or 32 cents per share, well below estimates of 48 cents. Revenue of $323.2-million also missed estimates and its shares fell 84 cents to $40.66.
Flight simulator maker CAE Inc. had $46.1-million of net income in its third quarter, up from $37.5-million a year earlier. Revenue grew to $513.6-million, up 2.5 per cent from a year earlier and its shares were unchanged at $13.90.
Mining stocks led TSX advancers with the gold group ahead 3.2 per cent as the April gold bullion contract moved ahead $13.90 to $1,288.60 (U.S.) an ounce.
The March copper contract was down one cent to $3.21 (U.S.) a pound and the base metals sector climbed 1.25 per cent.
The energy sector was ahead 0.3 while the March crude oil contract on the New York Mercantile Exchange edged up 13 cents to $100.19 (U.S.) a barrel.
The tech sector also provided lift, up 0.55 per cent.Report Typo/Error
- S&P/TSX Composite15,533.47-247.73(-1.57%)
- S&P 500 INDEX2,367.34+3.53(+0.15%)
- Dow Jones Industrials20,821.76+11.44(+0.05%)
- NASDAQ NMS COMPOSITE INDEX5,845.310.00(0.00%)
- Gold Front Month Futures$1,256.70-0.10(-0.01%)
- Cineplex Inc$50.380.00(0.00%)
- Cae Inc$19.940.00(0.00%)
- Updated February 24 4:00 PM EST. Delayed by at least 15 minutes.