Stocks on Wednesday ended a recent weak stretch, with major U.S. indexes rising toward new highs after investors cheered the latest policy statement from the Federal Reserve.
The S&P 500 closed at 1558.71, up 10.37 points or 0.7 per cent – marking its first gain over the past four sessions. The blue-chip Dow Jones industrial average closed at 14,511.73, up 55.91 points or 0.4 per cent. That is just 28 points shy of its record high on March 14.
In Canada, the S&P/TSX composite index closed at 12,826.55, up 52.68 points or 0.4 per cent.
Gains in the TSX were helped by another rally in Research In Motion Ltd., which rose 7.2 per cent. Morgan Stanley upgraded the BlackBerry maker to “overweight” from “underweight” and raised its price target on the stock to $22 from $10 (U.S.). In Toronto, the shares closed at $16.53 (Canadian).
In broader terms, North American stocks showed strength soon after trading began – but added to the gains after the Fed released its latest monetary policy statement.
The Fed stuck to its stimulus policies of ultra-low interest rates and asset purchases, even as it noted improvements in economic activity and the labour market – suggesting that it will not remove economy-boosting policies any time soon.
The stock market gains also suggest that investors are no longer worried about the threat posed to the euro zone by Cyprus. The country rejected on Tuesday a bailout plan that would have tapped bank deposits. It has instead appealed to Russia for financial assistance, but European leaders remain committed to finding a solution to the crisis.
Bond yields of other less-than-stable European nations – including Spain and Italy – declined, following a jump on Tuesday. Gold, seen as a haven, also eased back, to $1,606.14 (U.S.) an ounce, down $6.61.
In the U.S., FedEx Corp. slumped 6.9 per cent after it reported that its quarterly earnings fell 31 per cent over last year, to $1.13 a share. It also forecast weaker-than-expected earnings for the current quarter. The company is seen by some investors as a bellwether for the global economy.
Among Canadian commodity producers, Suncor Energy Inc. rose 0.1 per cent and Barrick Gold Corp. fell 0.2 per cent.
Crude oil rose to $2.96 a barrel, up $80 cents.