TSX SHOWS UPTICK; OTTAWA OKs GATEWAY
• The Toronto stock market racked up a small gain Tuesday as commodities mostly fell despite continuing uncertainty in Iraq, while south of the border the U.S. Federal Reserve began a two-day policy meeting.
The S&P/TSX composite index added 15.46 points to 15,055.89. The Canadian dollar dipped US0.19¢ to US92.05¢.
Traders were cautious as they awaited the outcome of the Fed meeting and its latest economic outlook, due for release Wednesday.
The meeting is taking place amid news from the U.S. Labor Department that U.S. consumer prices rose 0.4% in May, the biggest one-month jump since February 2013, pushed up by the rising cost of food and gasoline and the biggest hike in airline fares in 15 years.
The U.S. central bank is expected to cut its monthly bond purchases by US$10-billion to US$35-billion a month but traders will be looking for clues as to the Fed’s intentions on future tapering. The stimulus has helped keep long-term borrowing rates low and supported equity markets.
Gareth Watson, vice-president of investment management and research at Richardson GMP Ltd., says there shouldn’t be any big surprises from the central bank.
“Ever since they started tapering we haven’t really had any surprises out of them. We’ll be looking at the language of the release and pay attention to the press conference,” he said. “But they’ve been pretty predictable.”
Wall Street was higher, with the Dow Jones industrial average up 27.48 points to 16,808.49, Nasdaq 16.12 points higher at 4,337.23 and the S&P 500 index ahead 4.21 points at 1,941.99.
Meanwhile, after markets closed, Ottawa gave the green light to Enbridge Inc.’s proposed Northern Gateway pipeline, contingent upon the pipeline company satisfying all 209 conditions imposed in December by a joint review panel of the National Energy Board and Canadian Environmental Assessment Agency.
The $7-billion, 1,200-kilometre pipeline would link crude from the Alberta oilsands to a terminal in Kitimat, B.C., for shipment overseas. It faces stiff opposition from many First Nations and environmentalists.
Shares in Enbridge closed up 45¢ at $51.96 on Tuesday.
Commodity prices were mostly lower after enjoying a bump last week as a result of the deteriorating military situation in Iraq. The July crude contract on the New York Mercantile Exchange declined US54¢ to US$106.36 a barrel.
Mr. Watson said if the situation in Iraq continues, it may give the Toronto Stock Exchange more support to surpass its record high close of 15,073 set back in June 2008.
But if the current oil price is any indication, traders are now in a “wait and see” mode with oil, he said. “That initial risk premium has been put into oil prices,” said Mr. Watson.
Investors did not flock to gold either. August bullion was down US$3.20 to US$1,271.70 an ounce, while July copper was up US1¢ at US$3.06 a pound.