The Canadian Press - ONLINE EDITION

Stocks jump, Yellen says US can weather stimulus taper while keeping rates low

  • Print

TORONTO - North American stock markets racked up solid gains Tuesday thanks to reassuring words from the new chair of the U.S. Federal Reserve.

The S&P/TSX composite index jumped 86.81 points to 13,880.99 after Janet Yellen said that while she thinks the U.S. economy is strong enough to weather a cutback in a key stimulus program, rates should stay low to support a still lacklustre economy.

The Canadian dollar was up 0.31 of a cent to 90.77 cents US.

New York's Dow Jones industrials surged 192.98 points to 15,994.77, while the Nasdaq was up 42.87 points at 4,191.04 and the S&P 500 index added 19.91 points to 1,819.75.

Yellen told a congressional committee that she expects a "great deal of continuity" with her predecessor, Ben Bernanke. And she said that if the economy keeps improving, the Fed will take "further measured steps" to reduce the support it’s providing through monthly bond purchases.

So far, the Fed has moved twice over the last two months to cut its bond buying program by a total of US$20 billion to $65 billion and analysts generally expect the Fed to continue cutting by $10 billion every meeting.

Yellen’s remarks to the House financial services committee had been highly anticipated, particularly with last week's U.S. employment data for January falling well short of expectations and amid fresh worries about how emerging markets are dealing with Fed tapering.

"I think it just built up the wall of worry that we spent all year last year knocking down," said Philip Petursson, director of institutional equities at Manulife Asset Management.

"Markets just want some reassurance and it looks like they’re getting it."

There was also relief that Congress appeared poised to raise the U.S. borrowing limit without the political drama that happened late last year and in 2011. That would avert the threat of a default on the U.S. government’s debt.

On the earnings front, Cineplex Inc. (TSX:CGX) had $20.2 million of net income or 32 cents per share, well below estimates of 48 cents. Revenue of $323.2 million also missed estimates and its shares fell 62 cents to $40.88.

Flight simulator maker CAE Inc. (TSX:CAE) had $46.1 million of net income in its third quarter, up from $37.5 million a year earlier. Revenue grew to $513.6 million, up 2.5 per cent from a year earlier and its shares were 49 cents higher at $14.39.

Mining stocks led TSX advancers with the gold group ahead just over three per cent as the April bullion contract moved ahead $15.10 to US$1,289.80 an ounce.

The base metals sector climbed 0.96 per cent. The March copper contract was down one cent to US$3.21 a pound ahead of what could be some further negative news from China after data last week showed the manufacturing sector in the world's second-biggest economy was still expanding but at a slower pace. Meagre trade growth is expected when import and export data is released Wednesday.

The energy sector was ahead 0.34 per cent even as the March crude oil contract on the New York Mercantile Exchange edged 12 cents lower to US$99.94 a barrel.

The financials sector also provided lift, up 0.4 per cent.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

Photo Store Gallery

  • JOE.BRYKSA@FREEPRESS.MB.CA Local-(  Standup photo)-    A butterfly looks for nector on a lily Tuesday afternoon in Wolseley-JOE BRYKSA/WINNIPEG FREE PRESS- June 22, 2010
  • A baby Red Panda in her area at the Zoo. International Red Panda Day is Saturday September 15th and the Assiniboine Park Zoo will be celebrating in a big way! The Zoo is home to three red pandas - Rufus, Rouge and their cub who was born on June 30 of this year. The female cub has yet to be named and the Assiniboine Park Zoo is asking the community to help. September 14, 2012  BORIS MINKEVICH / WINNIPEG FREE PRESS

View More Gallery Photos

Poll

Now that the snow is mostly gone, what are your plans?

View Results

Ads by Google