The Toronto stock market was higher Tuesday, as commodity prices fell and the U.S. Federal Reserve begins a two-day policy meeting.
The S&P/TSX composite index added 10.21 points to 15,050.64, while the Canadian dollar dipped 0.17 of a cent to 92.07 cents (U.S.).
Traders will be cautious with any major moves as the Fed meets to discuss its latest economic outlook, and decide whether it will continue to taper its massive bond buyback program. It’s expected the central bank will cut the purchases by $10-billion to $35-billion (U.S.) a month. The stimulus has helped keep long-term borrowing rates low, and sent markets upwards.
The Fed will give its update on Wednesday.
US. indexes were mixed, with the Dow Jones industrials down 3.01 points to 16,778, the Nasdaq jumped 12.73 points to 4,333.84 and the S&P 500 futures gained 0.77 of a point to 1,938.55.
The latest economic data continues to offer signs that the U.S. economy is steadily recovering.
The Labor Department reported that U.S. consumer prices increased in May by the largest amount in more than a year as the cost of food and gasoline showed big gains and airline fares jumped by the largest amount in 15 years. It says its consumer price index rose 0.4 per cent in May, the biggest one-month jump since a 0.6 per cent increase in February 2013.
But still, there were indications of a slowdown in the housing sector as the pace of U.S home construction slipped in May with many Americans still struggling to afford new houses.
The U.S. Commerce Department says builders started work at a seasonally adjusted annual rate on 1.01 million homes. That was down 6.5 per cent from 1.07 million in April. Construction firms began work on fewer single-family houses, condominiums and apartments last month.
Meanwhile, Ottawa is expected to release its long-awaited decision on the Northern Gateway pipeline after the markets close Tuesday.
The $7-billion, 1,200 kilometre pipeline would link Alberta oilsands to a terminal in Kitimat on the British Columbia coast for shipment overseas. The project has already received approval from a joint panel of the National Energy Board and the Canadian Environmental Assessment Agency but faces stiff opposition from many First Nations, who have threatened court challenges if the project gets the green light. Shares in Enbridge gained 0.87 per cent, or 45 cents, to $51.96.
Commodity prices ran lower, after enjoying a bump in prices in the last few sessions.
The July crude contract on the New York Mercantile Exchange fell 18 cents to $106.72 (U.S.) a barrel.
The U.S. has sent a small contingent of troops to secure its assets in Iraq, a key global supplier of oil. About 300 U.S. soldiers are being positioned in and around Iraq to protect the U.S. Embassy and other American interests as President Barack Obama weighs options for dealing with the al-Qaeda inspired militants who have captured a vast swath of the country’s north.
Iraq’s crude oil exports have so far not been disrupted, but the conflict raises concern about whether the country can rebuild its oil infrastructure and meet global demand.
August bullion was down $7 to $1,268.30 (U.S.) an ounce and July copper was up a penny at $3.06 a pound.