Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

Inside the Market

Up-to-the-minute insights
on developing market news

Entry archive:

In this Friday, June 1, 2012, file photo, trader Edward Curran works on the floor of the New York Stock Exchange. Wall Street was set to open June 7, 2012 a little higher. Dow Jones industrial futures rose 0.1 percent to 12,431 and S&P 500 futures added 0.2 percent to 1,317.80. (Richard Drew/AP)
In this Friday, June 1, 2012, file photo, trader Edward Curran works on the floor of the New York Stock Exchange. Wall Street was set to open June 7, 2012 a little higher. Dow Jones industrial futures rose 0.1 percent to 12,431 and S&P 500 futures added 0.2 percent to 1,317.80. (Richard Drew/AP)

The close: Dow hands back most of early gain Add to ...

North American stocks saw early gains evaporate on Thursday, as investors weighed a cautious Federal Reserve against a rate cut in China.

The Dow Jones industrial average closed at 12,460.96, up 46.17 points or 0.4 per cent, a day after the blue-chip index scored its biggest one-day gain since December. Earlier in the day, the index had been up about 140 points. The broader S&P 500 closed at 1,314.99, down 0.14 point or 0 per cent. In Canada, the S&P/TSX composite index closed at 11,592.12, down 41.28 points or 0.4 per cent.

The U.S. market had shown impressive gains throughout most of the day, following news that China had cut its key lending rate by a quarter of a percentage point – its first cut since 2008 – in an effort to stimulate economic growth in the country, where deteriorating growth has raised alarms that the world’s biggest growth engine is sputtering. In another stimulative move, China handed its banking sector greater flexibility in setting lending and deposit rates.

In the United States, the struggling employment situation took a slight turn for the better. The Labor Department reported that initial jobless claims for the period ended last week fell by 12,000, to 377,000 – in line with economists’ expectations, but still elevated after a number of weekly increases.

However, investors checked their enthusiasm for stocks shortly after Federal Reserve chairman Ben Bernanke testified before Congress, offering no substantial clues that the Fed is gearing up for another round of economic stimulus. Mr. Bernanke simply reiterated that the Fed is “prepared to take action as needed to protect the U.S. economy in the event that financial stresses escalate.” Investors had been hoping for a clear signal from the Fed that it had a stimulus option ready to go.

In Europe, stocks closed higher. Germany’s DAX index rose 0.8 per cent and the U.K.’s FTSE 100 rose 1.2 per cent.

In Canada, the benchmark index was largely held back by gold producers after the price of gold reacted negatively to Mr. Bernanke’s testimony. It closed at $1,588 (U.S.) an ounce, down $46.20. Barrick Gold Corp. fell 4.2 per cent and Kinross Gold Corp. fell 6.1 per cent.

Meanwhile, Lululemon Athletica Inc. fell 8.8 per cent after the yoga wear company reported better than expected first quarter earnings and sales, but delivered a second quarter earnings forecast that was below expectations.

Research In Motion Ltd. rose 4.1 per cent after it announced it would discontinue its low-end PlayBook tablet.

 

For Globe Unlimited Subscribers

Business videos »

Most popular videos »

Highlights

Most Popular Stories