U.S. inflation stability pumps up Wall Street

Major North American stock indices made moderate gains ahead of the weekend on news that U.S. inflation was unchanged last month.

The Toronto Stock Exchange’s S&P/TSX composite index advanced 39.81 points to 15,174.81.

In New York, two indices reached alltime highs. The S&P 500 index added 11.44 points for a record of 2459.27, while the Dow Jones industrial average rose 84.65 points to 21637.74 — its third consecutive day of record highs.

Meanwhile, the Nasdaq composite index climbed 38.03 points to 6312.47.

The U.S. Department of Labor released data showing inflation was unchanged in June and rose 1.6 per cent over the last 12 months. Excluding food and energy items, the consumer price index rose 0.1 per cent in June and 1.7 per cent for the past 12 months, the department said.

Those figures, which came in below market expectations, were the primary driver behind the growth Friday, said senior investment strategist Macan Nia of Manulife Investments.

Nia said the flat inflation numbers gave markets a boost because it suggests the U.S. Federal Reserve might have more reason to delay another interest rate increase.

The market thinks the Fed is “going to be a little bit more cautious,” he said.

This week, the U.S. central bank had already signalled it may slow down the pace of rate hikes if annual inflation stays below its two per cent target.

That’s good news for markets in a simplistic sense because it means the cost of borrowing money to invest remains low, Nia said.

The belief the U.S. might slow its rate hikes also weakens the U.S. dollar and provides a boost for gold, he said.

The price of the precious metal shot up $10.20 to $1,227.50 US an ounce, as the global gold sector led advancers on the TSX where bullion stocks gained an average of nearly one per cent of their worth.

Elsewhere in commodities, the August crude contract gained 46 cents to $46.54 US per barrel, the August natural gas contract advanced 1.9 cents to $2.98 per mmBTU US and the September copper contract was up about three cents to roughly $2.69 US a pound.

The Canadian dollar was trading at an average price of 78.91 cents US, up 0.44 of a U.S. cent.

Brazil proposes shrinking protected Amazon forest

SAO PAULO — Brazil’s Environment Ministry is proposing to open up 860,000 acres of a protected reserve in the Amazon to logging, mining and agricultural use.

The bill that would reduce the size of the National Forest of Jamanxim was sent to Congress Thursday.

It comes after President Michel Temer vetoed legislation that would have reduced protections on a larger parcel of land following pressure from environmental groups and Brazilian supermodel Gisele Bündchen.

Activists worry that fewer protections will lead to increased deforestation, at a time when Brazilian rain forests are already being cut at the fastest rate in nearly a decade.

The Environment Ministry said Friday that the bill includes measures to prevent deforestation and will reduce land conflicts and promote jobs. Land conflicts are rising, partly because of incursions by loggers and farmers into protected areas