An electronic display shows the Dow Jones Industrial Average above 18,000 on the floor of the New York Stock Exchange in New York, Tuesday, Dec. 23, 2014. U.S. stocks pushed further into record territory on Tuesday as the Dow Jones industrial average crossed past the 18,000-point mark for the first time.Seth Wenig/The Associated Press
The Toronto stock market rallied Tuesday following the release of better than expected economic data in Canada and the United States.
The S&P/TSX composite index was ahead by 136.58 points to 14,568.96 by mid-day. The Canadian dollar climbed 0.17 of a cent to 86.10 cents (U.S.).
Statistics Canada reported that gross domestic product rose by 0.3 per cent in October. The result beat economists' expectations of 0.1 per cent growth during the month, following September's reading of 0.4 per cent.
The federal agency said growth was broad-based, attributing it to several major sectors of the economy – especially oil and gas extraction, mining and manufacturing.
"I think it's just that time of year that the market is looking for good news. That just happens to be the news lifting the markets," said Ian Nakamoto, director of research at 3Macs.
In the U.S., the Commerce Department revised upwards its GDP figures for the third quarter to five per cent from a previous figure of 3.9 per cent. Economists had expected GDP to grow by 4.3 per cent.
The pace was the fastest quarterly growth since the summer of 2003 and followed a 4.6 per cent annual growth rate in the April to June quarter. The Commerce Department attributed the growth in the July to September period to consumer spending and business investment.
U.S. consumer spending also rose at the fastest pace in three months in November, while income posted the best gain in five months – both encouraging signs for economic growth. The Commerce Department says consumer spending increased 0.6 per cent in November, double the 0.3 per cent October gain and the best showing since August.
Consumer spending is closely watched because it accounts for about 70 per cent of economic activity.
Meanwhile, U.S. new home sales slipped 1.6 per cent in November – a sign that stronger job growth has not boosted housing sales yet.
The mostly positive data helped lift Wall Street.
The Dow Jones industrials advanced 83.06 points to 18,042.5, the first time ever the index has traded above the 18,000-mark. The S&P 500 index added 4.54 points to 2,083.08. Both the Dow and the S&P had closed at record highs on Monday.
The Nasdaq declined 10.40 points to 4,771.02.
Trading volumes are expected to be lower this week, with both the Toronto and New York markets to close at 1 p.m. ET on Wednesday and remain shut Thursday for Christmas. New York reopens on Friday, but the TSX will be closed for Boxing Day.
Nakamoto said there seems to be a general sense of optimism looking ahead to 2015.
"The markets are usually fairly strong in the last two weeks of the year," he said. "If things are bad, or if we've gone through bad news, people tend to be optimistic about the next year."
The February crude contract on the New York Mercantile Exchange was up $1.06 at $56.32 (U.S.) barrel.
"People may be looking at the glass half full, and saying there is some oversupply here, but demand may catch up," said Nakamoto.
"(But) it could rally for all I know and come back down again. It's just a volatile commodity."
Crude prices had hit $107 a barrel in June but have plunged nearly 50 per cent since then due to low demand, especially after Saudi Arabia and other members of the Organization of Petroleum Exporting Countries agreed to maintain production levels in the face of a global supply glut.
In other commodities, the February bullion contract was down $1.90 at $1,177.90 an ounce, while March copper was down one cent at $2.86 a pound.