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A structure showing the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt July 11, 2012. (ALEX DOMANSKI/REUTERS)
A structure showing the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt July 11, 2012. (ALEX DOMANSKI/REUTERS)

At the open: Markets rise amid surprise ECB rate cut, stimulus Add to ...

The Toronto stock market was slightly higher Thursday, as the European Central Bank announced it’s cutting its key interest rate and putting in place a new stimulus program to help rescue Europe’s weak economic recovery.

The S&P/TSX composite index climbed 4.02 points to 15,661.65. The Canadian dollar rose 0.43 of a cent to 92.27 cents (U.S.), also finding support in the ECB announcement.

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The Dow Jones industrials gained 48.37 points to 17,126.65, while the Nasdaq jumped 15.58 points to 4,588.14. The S&P 500 index saw an uptick of 4.83 points to 2,005.55.

The European Central Bank trimmed its benchmark interest rate to a low of 0.05 per cent from a previous record low of 0.15 per cent. ECB President Mario Draghi says the bank will start buying asset-backed securities and covered bonds in October.

The efforts aim to make credit cheaper at a time when concerns continue to grow that the economy of the 18-country eurozone might go into reverse. It did not grow in the second quarter, raising fears of a triple-dip recession.

Although it was a surprise move, the measures fall short of some expectations that an ECB stimulus program would have involved the purchase of government bonds, similar to what the U.S. Federal Reserve has done.

The ECB also cut its growth forecast for 2014 to 0.9 per cent from 1.0 per cent previously. It lowered its inflation forecast for the year to 0.6 per cent from 0.7 per cent.

On Wednesday, the Bank of Canada kept its key rate unchanged at one per cent, where it has been since September 2010, and showed no indication that it will hike rates until next year.

In economic news, Statistics Canada reported higher-than-anticipated trade surplus. The agency reported that Canada’s merchandise exports grew by 1.4 per cent in July, while imports edged down 0.3 per cent.

This raised the country’s trade surplus with the world to $2.6-billion from $1.8-billion in June. Economists had expected a surplus of about $1.2-billion, according to Thomson Reuters.

In the U.S, the Labor Department says slightly more Americans sought unemployment benefits last week, but the total number of people receiving jobless aid remains at its lowest level in more than seven years.

Applications for jobless aid rose 4,000 to a seasonally adjusted 302,000. The four-week average, a less volatile measure, increased 3,000 to a still-low 299,750. A steady decline over the summer in applications means that 2.46 million people collected benefits last week, the lowest total since June 2007, a few months before the Great Recession began.

U.S. figures for August will be released on Friday, as well as the latest Canadian jobs data.

On the corporate front, Manulife Financial Corp. announced after markets closed on Wednesday that it’s buying the Canadian operations of Standard Life for $4-billion (Canadian) in cash. Manulife said the acquisition will boost its presence in Quebec, which it has underserved in the past. Its shares dipped more than one per cent, or 24 cents, to $22.13 on the Toronto Stock Exchange.

Meanwhile, in commodities, the December crude contract was down 41 cents to $95.13 (U.S.) a barrel, while December bullion was up $2.70 to $1,273 an ounce. December copper was jumped four cents to $3.15.

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