North American markets down after Fed comments

TORONTO — Canada’s main stock index dropped moderately while U.S. stocks fell more sharply after the head of the Federal Reserve said he’s feeling more optimistic about the economy.

Fed chairman Jerome Powell made his first public comments Tuesday and he reaffirmed to the House Financial Services Committee that the central bank plans to raise interest rates gradually.

The market was spooked last month when potential signs of inflation strengthened, raising speculation that the Fed may speed up its timetable and knocking stock prices down by 10 per cent around the world. The Toronto Stock Exchange’s S&P/TSX composite index was down 43.51 points to 15,671.15, led by losses in the energy, materials, metals and gold sector.

In New York, the Dow Jones industrial average was down 299.24 points to 25,410.03. The S&P 500 index was down 35.32 points to 2,744.28 and the Nasdaq composite index was down 91.11 points to 7,330.35. The Canadian dollar closed at an average trading value of 78.49 cents US, down 0.34 of a U.S. cent.

The April crude contract was down 90 cents to US$63.01 per barrel and the April natural gas contract was unchanged at US$2.68 per mmBTU.

The April gold contract was down US$14.20 to US$1,318.60 an ounce and the May copper contract was down four cents to US$3.19 a pound.