Stocks lower, Fed says QE to conclude at end of month
TORONTO — The Toronto stock market closed lower Wednesday as the U.S. Federal Reserve did just what many traders expected - announced the end of its quantitative easing program, kept its key rate unchanged at close to zero and said it was in no hurry to hike rates.
The S&P/TSX composite index fell 96.68 points to 14,527.57 with particular pressure coming from gold stocks as the impending end of QE send bullion prices sharply lower.
The Canadian dollar lost ground as the greenback appreciated in the wake of the Fed announcement, down 0.16 of a cent to 89.36 cents US.
U.S. indexes were also lower as the Dow Jones industrials dropped 31.44 points to 16,974.31, the Nasdaq declined 15.06 points to 4,549.23 and the S&P 500 index shed 2.75 points to 1,982.3.
Some traders have viewed the completion of the QE stimulus with some trepidation since the program of massive bond purchases has kept long-term rates low and helped encourage the strong rally on stock markets over the past few years.
But economic conditions have improved dramatically since the Fed first launched its initial QE program in the wake of the 2008 financial collapse and the U.S. central bank noted Wednesday that softness in the labour market is gradually diminishing.
All TSX sectors were lower save for small gains in consumer discretionary and utilities stocks.