A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Feb. 29, 2016.Bloomberg
The U.S. dollar hit a 14-year high on Tuesday as the yen slid after the Bank of Japan stuck to its ultra-loose monetary policy, while U.S. stock indexes touched record highs as the rally in riskier assets since the U.S. election looked set to continue.
On Wall Street, the Dow neared the 20,000 level as reassurance over Italy's plan to spend up to 20 billion euros ($21 billion) to rescue its troubled banks offset risk aversion following attacks in Turkey and Germany a day earlier.
"Investors have become so fast in digesting bad news, and this explains the resilience in financial markets," said Hussein Sayed, chief market strategist at FXTM.
U.S. stocks have rallied since the Nov. 8 election, with the S&P 500 rising nearly 6 percent on bets that President-elect Donald Trump's plans for deregulation and infrastructure spending will give a boost to business.
The Dow Jones industrial average rose 85.04 points, or 0.43 per cent, to 19,968.1, the S&P 500 gained 6.81 points, or 0.30 per cent, to 2,269.34 and the Nasdaq Composite added 19.93 points, or 0.37 per cent, to 5,477.38.
Both the Dow and Nasdaq hit all-time intraday highs.
Canada's main stock index rose for the fourth straight day on Tuesday, led by the financial and energy groups as oil and bond yields climbed, while shares of BlackBerry Ltd. advanced after the company posted better-than-expected earnings.
The Canadian smartphone pioneer, which has gone through a wrenching transition in recent years, reported adjusted earnings of 2 cents a share, which came in ahead of analysts' expectations for a loss of 1 cent a share.
BlackBerry shares rose 2.5 per cent to $10.60, while shares of label and packaging maker CCL Industries Inc. surged 18.8 per cent to $269.42.
CCL said on Monday it would acquire the U.K.-based Innovia Group of companies for about $1.13-billion.
Financials gained 0.7 per cent as bond yields climbed, with Toronto-Dominion Bank advancing 0.7 per cent to $67.18 and Manulife Financial rising 1.4 per cent to $24.81.
Higher bond yields reduce the value of insurance companies' liabilities and increase the net interest margins of banks.
Energy rose 0.1 percent as oil prices climbed on forecasts of a steep draw in U.S. crude stocks that could indicate global oversupply is starting to shrink.
U.S. crude prices were up 0.8 per cent at $52.56 a barrel, while Suncor Energy Inc. rose 0.7 per cent to $44.11.
At 11:25 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index rose 42.94 points, or 0.28 per cent, to 15,312.79.
Six of the index's 10 main groups were higher.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.2 per cent, with Franco-Nevada Corp. falling more than 3 per cent to $74.28 and Barrick Gold Corp. down 1.1 per cent at $18.89.
Spot gold fell 1.1 per cent as the U.S. dollar rose and investors sold on expectations of stronger global economic growth and higher U.S. interest rates, while deadly attacks in Turkey and Germany failed to spur safe-haven buying.
Amaya Inc. founder David Baazov said he had ended talks to buy the Canadian online gambling company because some shareholders were demanding a higher premium.
The company's shares fell 3.3 per cent to $18.75.
The value of Canadian wholesale trade rose far more than expected in October as sales of building materials jumped and motor vehicle sales hit a record high, data from Statistics Canada showed.
European shares steadied, with the pan-European FTSE Euro 300 adding 0.3 per cent. Emerging market shares were flat while MSCI's broadest index of Asia-Pacific shares outside Japan ended down 0.3 per cent.
China's CSI 300 index slid 0.6 per cent on Beijing's move to tighten supervision of shadow banking activities and on liquidity concerns, while Japan's Nikkei closed up 0.5 per cent after a late BOJ-linked rally.
The U.S. dollar rose, tracking U.S. bond yields higher, as the strong appetite for risk assets pushed traders out of bonds and into stocks. Positive comments on Monday from Federal Reserve Chair Janet Yellen on the state of the U.S. labor market also boosted the greenback.
"She didn't use the opportunity to take the market back from being overly hawkish," said UBS currency strategist Constantin Bolz, in Zurich. "Maybe there were some people who ... thought they would hold off from further dollar longs until she spoke, in case she were to row back."
The dollar rose almost half a percent against a basket of major currencies to 103.65, the highest level since December 2002.
Its gains were strongest against the yen, which slid around 1 percent after the Bank of Japan, shrugging off the yen's recent slump, said it would keep monetary policy loose.
Benchmark 10-year U.S government bond yields, which set the bar for global borrowing costs, rose to just above 2.58 per cent.
The dollar rally and bond market selloff since the Nov. 8 U.S. election have been stoked by bets Trump's administration would enact looser fiscal policy, which would spur higher U.S. growth and inflation.
"The dollar and bonds have been trading in lockstep," said Ellis Phifer, senior market strategist at Raymond James in Memphis. "There are still concerns spending will increase and more debt supply will be on its way."
The greenback has risen 12 per cent versus the yen since Mr. Trump's surprise victory. The win was made official on Monday after Mr. Trump surpassed the required 270 Electoral College votes.
Oil prices rose on Tuesday to a one-week high on expectations of a steep draw in U.S. crude stocks that could indicate the global glut is starting to shrink.
Benchmark Brent crude futures were up 91 cents, or 1.7 per cent, at $55.83 a barrel at 11:13 a.m. ET. Brent hit an intraday high of $55.92.
U.S. crude futures rose 52 cents at $52.64 a barrel. Both contracts rose despite a strong dollar, which hit a 14-year high.
Crude prices often decline when the dollar strengthens, as it then becomes more expensive to hold dollar-denominated oil contracts.
Analysts polled by Reuters expected U.S. crude oil inventories to show a draw of 2.4 million barrels in the week to Dec. 16.
The American Petroleum Institute, an industry group, will release its figures on Tuesday, ahead of official government figures due Wednesday.
"There are expectations that we'll see supplies start to tighten by the end of the year," said Phil Flynn, analyst at Price Futures Group in Chicago. "We'll get more heating oil demand this weekend and could see a drop in production next week and even last week because of the cold temperatures."
One outlying factor that has flummoxed some analysts has been a series of increases in U.S. inventories at the key oil storage hub in Cushing, Oklahoma. Flynn said this rise has been largely offset by a drop in Gulf Coast inventories.
Crude stocks fell more than expected last week, feeding expectations for another large drop in this week's figures.
A deal to cut global supply among OPEC and non-OPEC producers struck this month has boosted oil prices to 17-month highs. The gains have set up 2016 to be the first year since 2012 in which Brent has risen.
"The new balance seems to be between $53 and $57 a barrel on Brent for the next weeks," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
Russian Energy Minister Alexander Novak told Russian newspaper Vedomosti that Russia may extend a production cut beyond the first half of 2017 if needed.
Asia is seen posting its biggest net additions to refining capacity in three years in 2017, further boosting demand for crude in the world's largest and fastest-growing oil-consuming region.