A trader listens to an announcement by the U.S. Federal Reserve on the floor of the New York Stock Exchange in New York Dec. 18, 2013.LUCAS JACKSON/Reuters
The Toronto stock market was slightly higher Thursday, a day after markets responded enthusiastically to the Federal Reserve's decision to modestly cut back on a key stimulus program. The Fed also emphasized that short-term rates aren't going up any time soon.
The S&P/TSX composite index gained 19.71 points to 13,354.44 following a 155-point jump after the Fed said it was cutting its $85-billion (U.S.) of monthly bond purchases by $10-billion starting in January. Further cuts will depend on economic data, particularly jobless levels and inflation.
A stronger American currency pushed the Canadian dollar down to mid-2010 lows, moving down 0.12 of a cent to 93.43 cents (U.S.) early Thursday.
U.S. indexes moved lower after racking up big gains Wednesday with the Dow Jones industrials down 21.58 points to 16,146.39 after charging ahead almost 300 points.
The Nasdaq declined 10.38 points to 4,059.69 and the S&P 500 index was 5.02 points lower to 1,805.63.
The latest instalment of quantitative easing has been around since September 2012 and kept long-term rates low and supported strong gains on many equity markets this year.
The tapering of asset purchases will be the first step toward winding down a program that has been in place since the 2008 financial crisis.
Most sectors were positive but the TSX was weighed down by a slide of two per cent in the much-battered gold sector as bullion prices resumed sliding after the Fed moved to cut back on its latest quantitative easing. QE had supported gold prices because of inflationary fears. But inflation is tame in many countries and data out earlier this week showed the consumer price index rising at an annual rate of only 1.2 per cent, significantly below the Fed's inflation target of two per cent.
The February gold contract on the New York Mercantile Exchange fell $33.40 to $1,201.60 (U.S.) an ounce. Gold prices are down 39 per cent so far this year while the TSX Global Gold sector has tumbled 49 per cent. On Thursday, Barrick Gold fell 47 cents to $17.61 (Canadian) and Goldcorp faded 59 cents to $22.01.
Elsewhere on commodity markets, January crude gained 32 cents to $98.12 (U.S.) a barrel and the energy sector gained 0.65 per cent. Canadian Natural Resources was ahead 33 cents to $34.75 (Canadian).
The base metals component moved 0.25 per cent higher while March copper slipped two cents to $3.29 (U.S.) a pound.
Tech stocks also lifted the TSX with CGI Group ahead 69 cents to $37.74. BlackBerry rose six cents to $6.53 a day before the smartphone maker releases its latest earnings.
A major decliner was auto parts company Martinrea International. It says it has identified an issue with the financial reporting of one of its Canadian plants. It said "it appears at this point that the plant misreported its financial statements over a number of years dating back to 2005." Its stock fell $1.18 or 12.53 per cent to $8.24.
In other corporate news, retailer Target says that about 40 million credit and debit card accounts may have been affected by a data breach. The chain, which has 1,797 U.S. stores and 124 in Canada, said that customers who made purchases using their cards at its U.S. stores between Nov. 27 and Dec. 15 may have been exposed.
Target Corp. advised customers who suspect there has been unauthorized activity on their cards should call them at 866-852-8680. Target shares declined 87 cents to $62.68.
A report from a federal review panel on Enbridge's proposed Northern Gateway pipeline through B.C. will be released later Thursday (at 4:30 p.m. EST) following more than a year of hearings. The final decision on whether the pipeline can go ahead rests with the federal government. Enbridge slipped eight cents to $44.77.
Facebook says it plans to offer 70 million shares of stock for sale that includes more than 41 million shares from chairman and CEO Mark Zuckerberg. The secondary offering of stock comes as the social media network prepares to join the Standard & Poor's 500 index after the close Friday. Its shares lost 78 cents to $54.78.
Most overseas markets also ran up sharply following the Fed's announcement as London's FTSE 100 index ran up 0.9 per cent, Frankfurt's DAX rose 0.95 per cent and the Paris CAC 40 advanced 1.05 per cent.
Earlier in Asia, Tokyo's Nikkei 225 index gained 1.7 per cent while Sydney's S&P ASX 200 added 2.1 per cent. But China's benchmark Shanghai Composite Index shed 0.9 per cent as a rise in money market interest rates pushed up trading costs and raised fears of an economic slowdown. Hong Kong and India also fell.