Equilibrium back after fed concerns
The Toronto stock market closed higher Friday after worries about the future of U.S. economic stimulus drove the TSX lower over the previous two sessions.
The S&P/TSX composite index advanced 61.66 points to 12,701.63 with all sectors positive, except for tech stocks, while the TSX Venture Exchange advanced 10.71 points to 1,144.68.
The Canadian dollar was down US0.2¢ at US97.96¢. It had earlier hit an eightmonth low of US97.51¢ amid data showing lower than expected retail sales and tame inflation figures.
Retail sales fell 2.1% in December, led by a decrease in vehicle sales. That was much more than the 0.3% decline that economists had expected. The drop followed five consecutive monthly gains in retail sales. Excluding sales at motor vehicle and parts dealers, retail sales decreased by 0.9%.
Meanwhile, Canada’s already low inflation subsided further in January. Statistics Canada says the consumer price index rose 0.5% in January compared with a year earlier, a smaller increase than the 0.8% gain in December and the smallest increase since October, 2009.
A strong earnings report from tech giant Hewlett Packard Co. helped push New York indexes well into positive territory after two days of declines, sparked by the release of minutes from the Fed’s latest pol- icy meeting. They showed that some policymakers were worried that the bank’s US$85 billion in monthly bond purchases could eventually unsettle financial markets or cause the central bank to take losses.
The Fed’s bond purchases, commonly known as quantitative easing, are designed to boost the U.S. economy by increasing liquidity in financial markets.
The Dow Jones industrials gained 119.95 points to 14,000.57, the Nasdaq was ahead 30.33 points to 3,161.82 and the S&P 500 index advanced 13.18 points to 1,515.6.
Personal computer maker Hewlett-Packard on Thursday reported earnings of $1.2 billion, or 63¢ per share, down 16% from a year ago. Ex-items, HP would have earned 82¢ per share, well above the average estimate of 71¢ per share among analysts surveyed by FactSet. Revenue fell 6% to $28.4 billion, about $470 million above analysts’ projections.
Friday’s figure followed an in increase in the ZEW index based on surveys of investment analysts released Tuesday. Commodity prices were mixed following a string of steep losses.
Commodities have been punished by a U.S. dollar which strengthened after the release of the Fed minutes on Wednesday. Also, oil prices had been undercut by data showing U.S. oil inventories rose last week by a much more than expected 4.14 million barrels.