TORONTO – The Toronto Stock Exchange enjoyed its third consecutive advance Wednesday, apparently indifferent to renewed fears of the debt default by Greece and the possibility of rising interest rates in the U.S. that sent markets elsewhere tumbling.
The S&P/TSX composite index was up 42.60 points at 14,947.51, after rising about 250 points over the previous 2 days.
The loonie was down 0.43 of a U.S. cent at 80.65 cents.
On commodity markets, the August oil contract closed down 74 cents at US$60.27 a barrel, while August gold lost $3.70 to US$1,172.90 an oz.
In New York, 2 days of advances came to an end as the Dow Jones industrial average plunged 178.00 points Wednesday to 17,966.07, while the Nasdaq dropped 37.68 points to 5,122.41 and the S&P 500 gave back 15.62 suggests 2,108.58.
Norman Raschkowan, senior partner at Sage Road Advisors, noted that the TSX has been a bit of a \”laggard\” in recent weeks compared with U.S. markets, that have recently tested and even set new record highs.
\”So I believe part of what\’s happening is there is a bit of a pullback in New York because some of the enthusiasm has waned and Canada, perhaps, continues to be benefiting from a catch-up.\”
\”Then you\’ve got news over a couple of particular securities, such as Rogers, which is a reasonably important security in the index, and so that has helped too.\”
Shares in Rogers Communications (TSX:RCI.B), which announced a $465-million deal to buy small wireless company Mobility, were up 76 cents or 1.78 per cent at $43.35.
In Ny, the downward move came amid renewed hints from the U.S. Fed of not one but possibly two hikes this season to its historically low policy rate that has helped sustain markets because the Great Recession.
Reserve governor Jerome Powell said Tuesday that he expected the U.S. central bank to begin raising its benchmark interest rate in September, having a second rate hike arriving December.
Expectations of the Fed increase got a further boost Wednesday once the U.S. Commerce Department released a study showing the American economy contracted under thought in the first quarter – 0.2 percent versus 0.7 in its previous report.
As well, traders were delay by news from Europe indicating that Greece and its creditors remain farther apart on the deal than was believed the 2009 week amid optimistic statements from both sides. Failure from the talks could lead to a debt default by Greece by the end of the month.
Still, that\’s one little bit of uncertainty troubling the markets that Raschkowan believes will get resolved fairly soon, one way or another.
\”I would expect that they\’ll reach some kind of accommodation that allows Greece to postpone its sort of day of reckoning again,\” Raschkowan said. \”It\’s possible they will not but I suspect that\’s the preferred outcome for sides of the discussions.\”