TSX riSeS on poSiTive World Bank forecaST
TORONTO • The Toronto stock market closed with a solid gain Wednesday as a positive forecast on the global economy helped boost oil and metal prices.
The S& P/ TSX composite index gained 80.20 points to 13,772.58 while the Canadian dollar edged up US0.03¢ to US91.37¢.
The World Bank’s global economics prospects report said global growth is expected to rise from 2.4% in 2013 to 3.2% this year and 3.4% in 2015.
“This should be the first year of synchronous global growth we’ve seen since the credit crisis,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.
“Europe isn’t going to be great, but our view is we have had a couple of quarters in which they have inched out of negative territory on the economic side.”
U. S. indexes were higher after a strong earnings report from Bank of America Corp. and a much better- than- expected reading on manufacturing in the U. S. Northeast.
The Empire manufacturing survey beat expectations, rising to 12.5 in January from a revised 2.2 in December. The survey showed significant improvements in balances for new orders, shipments and employee numbers.
The Dow Jones industrial average jumped 108.08 points to 16,481.94, Nasdaq advanced 31.86 points to 4,214.88 and the S& P 500 index rose 9.50 points to 1,848.38.
Bank of America, the second- largest U. S. bank, earned US$ 3.44- billion, or US29¢, a share in the October- to- December period, up from US$ 732- million a year earlier. The showing beat forecasts by US2¢ a big improvement in loan- loss provisions. It shares were up US38¢ to US$ 17.15.
Also supporting markets was a positive read on the economy by the U. S. Federal Reserve. Its latest regional survey, known as the Beige Book, said the American economy expanded at a moderate pace in December and retail sales gained in most of the 12 Fed districts.
The Fed continued to be an overhang on markets as the central bank has started to reduce its bond- purchasing program to US$ 75- billion a month, down from US$ 85billion. But it has also said that further tapering would depend on economic performance, particularly jobs data.
Uncertainty about Fed intentions took off again after December jobs data released last Friday came in far below expectations.
Corporate earnings were the other big issue as fourth- quarter data start to come in. The S& P 500 rocketed about 30% last year and investors now want to see if strong earnings and revenue can justify that gain and push stock prices higher.
The base metals component was the leading TSX advancer, up 3.7% as the March copper contract added US2¢ to US$ 3.35 a pound. The tech sector gained 1.48% with Open Text Corp. ahead $ 2.19 to $ 99.23 while BlackBerry Ltd. rose 26¢ to $ 9.36.
The gold sector moved into positive territory, up 1% even as the February bullion lost US$ 7.10 to US$ 1,238.30 an ounce.
The February crude oil contract on the New York Mercantile Exchange gained US$ 1.58 to US$ 94.17 a barrel amid data showing a much bigger than expected 7.7- million barrel drop in supplies and the energy sector was up 0.39%.