TORONTO (CP) — The Toronto stock market posted a triple-digit gain Tuesday as a small recovery in oil and metals prices helped buoy North American markets.
The S&P/TSX index closed up 109.37 points to 13,462.71 after sliding more than 216 points in the previous two sessions.
In New York, the Dow Jones industrial average soared 228.89 points to 16,599.85, while the S&P 500 advanced 25.06 points to 1,978.09 and the Nasdaq climbed 54.76 points to 4,860.52.
American markets seemed rejuvenated after dipping Monday amid interest rate worries ahead of the two-day policy rate meeting of the U.S. Federal Reserve, which starts Wednesday.
The Fed will announce Thursday whether it plans to raise its benchmark rate or continue to hold it near zero, where it has been since the Great Recession.
“We’re just in this back and forth trading while people wait and see what the Fed does on Thursday,” said Colin Cieszynski, chief market strategist at CMC Markets.
Some observers predict the U.S. central bank will move to increase rates, but others expect the Fed to opt for caution in the face of halting progress in the U.S. economic recovery, the slowdown in China and turbulence on global financial markets.
Cieszynski said that higher rates won’t actually have much of a long-term impact on the value of the American dollar because markets have already priced it into the value.
“We’re in a situation where everybody knows a rate hike is coming and, in some ways, the Fed might be better served by just getting it over with,” he said.
If they delay the rate hike, Cieszynski said, the uncertainty that has contributed to recent volatility on the world markets will keep hanging around.
The loonie ended the day up 0.06 of a U.S. cent at 75.49 cents US.
The Canadian dollar is stabilizing after being hit by the collapse in oil prices and the accelerating American recovery, Cieszynski said.
“I think that just about all the bad news has been priced in,” he said.
“You never know if another shoe is going to fall, but I think a lot of shoes have already fallen on it.”
On commodity markets, the October contract for benchmark crude oil rose 59 cents to US$44.59 a barrel, while October natural gas fell three cents to US$2.728 per thousand cubic feet.
December gold fell $5.10 to US$1,102.60 an ounce, while December copper prices strengthened 2.1 cents to US$2.427 a pound.
In economic news, the Commerce Department reported the U.S. retail sales rose just 0.2 per cent in August after advancing 0.7 per cent in July, slightly less than economists had forecast.
Meanwhile, the Fed also reported that manufacturing production fell 0.5 per cent in August, its biggest decline since January 2014, with lower automobile production accounting for most of the decline.
Peter Henderson, The Canadian Press
