Signs of stability in Eurozone
European Central Bank keeps status quo on borrowing costs
Lower borrowing costs in Europe helped overshadow some disappointing economic data out of the U.S. on Thursday, allowing Canada’s benchmark stock index to rally to a positive close.
The S&P/TSX composite index, which had spent much of the day in negative territory, finished the day with a gain of 13.38 points, or 0.11 per cent, at 12,274.32. Seven of the 10 subindexes advanced, led by health care.
The Dow Jones industrial average, which had swung between gains and losses on Thursday, closed at 12,471.02, up 21.57 points, or 0.17 per cent, while the Nasdaq built on its earlier gains to close at 2,724.70, a gain of 13.94 points, or 0.51 per cent.
Yields decreased at bond auctions in Spain and Italy on Thursday. Also on Thursday, European centralbank president mario draghi said he saw signs of stabilization in the region.
“There are significant cross currents,” said Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust. “Lower borrowing costs will help in the refinancing that’s due in the next few months in the Euroland in general. Still, they’ve got to spur growth to get things going. In the U.S., today’s economic numbers were weaker than anticipated. The market has had a nice run here. Sentiment has gotten more bullish, which makes me nervous.”
Retail sales increased less than expected in the U.S. in December, up 0.1 per cent when analysts had forecast gains of 0.3 per cent. Also, the previous week’s initial jobless claims rose — as did the four-week moving average, which rose for the first time in six weeks.
“Given anecdotal reports of relatively solid holiday shopping, it is possible that part of the downside surprise in nominal December sales reflected steeper than normal discounting,” said RBC Economics economist Nathan Janzen.
The price of crude oil fell $1.77 US to $99.10 US a barrel in trading in New York, while gold gained $8.10 US to $1,647.70 US an ounce.
The Canadian dollar rose 10 basis points to 98.20 cents US.
Canada’s junior Venture exchange rose 9.38 points, or 0.61 per cent, to 1,540.50.