The Toronto stock market advanced Tuesday while traders reacted positively to the debut appearance before Congress by the new chair of the U.S. Federal Reserve.
The S&P/TSX composite index was ahead 39.7 points to 13,833.88 as Janet Yellen said in her prepared remarks to a congressional committee that she expects a “great deal of continuity” with her predecessor, Ben Bernanke.
She signalled that 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 down 0.09 of a cent to 90.37 cents (U.S.) as traders also looked ahead to a new budget from the Conservative government after the market close.
New York indexes were positive as traders looked to the question and answer session that will follow Yellen’s testimony (which was to start at 10 a.m. EST) for her thoughts on inflation, the economy and wrapping up stimulus.
The Dow Jones industrials gained 38.82 points to 15,840.61, the Nasdaq was up 7.34 points to 4,155.51 while the S&P 500 index added 2.95 points to 1,802.79.
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 emerging markets.
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 90 cents to $40.60.
Flight simulator maker CAE Inc. had $46.1-million of net income in its fiscal third quarter, up from $37.5-million million a year earlier. Revenue grew to $513.6-million, up 2.5 per cent from a year earlier and its shares dipped three cents to $13.87.
The gold sector led TSX advancers, up 1.23 per cent as April bullion moved ahead $3.80 to $1,278.50 (U.S.) an ounce.
Financials were also supportive, up 0.3 per cent.
March copper was down two cents to $3.21 (U.S.) a pound and the base metals sector climbed a slight 0.13 per cent.
The energy sector was flat while March crude on the New York Mercantile Exchange dropped 21 cents to $99.854 (U.S.) a barrel.