TSX SwellS higher, N. Y. hiTS New reCOrDS

• The Toronto stock market and the loonie were sharply higher Thursday after U. S. Federal Reserve chairman Ben Bernanke offered reassurances that a key stimulus measure that has helped global markets rebound this year isn’t going away any time soon.

The S& P/ TSX composite index ran up 186.33 points to 12,493.26, pushing the TSX back into positive territory for the year, albeit only by 60 points or 0.5%.

Bernanke said in a speech after markets closed Wednesday that the U. S. economy still needs help from the central bank’s low interest rate policies because unemployment remains high and inflation is below the Fed’s target. The greenback weakened sharply following Bernanke’s comments and the Canadian dollar surged 1.22¢ to 96.29¢ US after hitting an intraday high of 96.43¢ US.

U. S. indexes took off to record highs as the comments from the Fed chief reassured investors who were dismayed by his remarks last month that the Fed would likely slow its bond purchases later this year and end them around mid- 2014 if the American economy strengthened.

The Dow Jones industrials jumped 169.26 points to 15,460.92, above its all- time closing high of 15,409 set May 28.

The Nasdaq gained 57.54 points to 3,578.3, its highest since October 2000. It remains well below the all- time high of 5,048 it reached March 10, 2000. The S& P 500 index advanced 22.4 points to 1,675.02, above its record close of 1,669 from May 21.

“Sit back and enjoy the bull market,” said Ron Meisels, president of Phases + Cycles in Montreal.

“There is still a lot of money on the sidelines ready to buy bargains. And there are still bargains in New York and Toronto.”

The Fed has been buying $ 85 billion of financial assets a month to keep interest rates low and encourage borrowing and spending. That stimulus has driven global stocks higher, so the prospect of reducing it has caused market volatility in recent weeks.

Bernanke’s latest comments came after the release of minutes from the Fed’s most recent meeting showed that about half of the Fed’s 19- member policy- making committee supported an end to the bond- buying program late this year.

But many also agreed at the meeting last month that the job market’s improvement would have to be sustained before the Fed would reduce the purchases.

The meeting was held prior to the release of a stronger- than- expected U. S. employment report for June, which came out last Friday.

Gold prices shot up following Bernanke’s comments, with the August contract on the New York Mercantile Exchange ahead $ 32.50 to US$ 1,279.90 an ounce.

Gold prices have enjoyed a sharp increase in recent years as a result of quantitative easing by the Fed and other central banks worldwide, but have fallen recently due to Bernanke’s tapering comments.

All TSX sectors participated in Thursday’s advance with the gold sector leading advancers, up about 6.5% as Barrick Gold Corp. rose $ 1.16 to C$ 15.85 while Goldcorp Inc. climbed $ 1.85 to $ 27.20.

The sector is the worst performer by far on the TSX but has come off the worst declines of the year recently.