Stocks rise after days of losses
Posted: Jun 6, 2012 12:08 PM ET
Last Updated: Jun 6, 2012 4:12 PM ET
North American stock markets rallied strongly Wednesday, after more than a month of watching share prices get beaten down.
The S&P/TSX composite index, which rose by as much as 179 points during the session, closed with a gain of 125.69 points, or 1.1 per cent, at 11,633.40.
The Canadian dollar was up 0.95 of a cent to 97.29 cents US.
In New York, the Dow Jones industrials rose 286.84 points, or 1.78 per cent, to 12,414.79 The Nasdaq composite index gained 66.61 points, or 2.4 per cent, to 2,844.72 and the S&P 500 index was ahead 29.63 points, or 2.3 per cent, to 1,315.13.
The July crude contract on the New York Mercantile Exchange closed up 73 cents at $85.02 US a barrel, July copper jumped eight cents to $3.37 US a pound and August bullion was ahead $17.30 to $1,634.20 US.
"It's a relief rally," said John Stephenson, portfolio manager at First Asset Funds.
"Many people have been sitting on the sidelines, waiting for an opportunity to get in. And hope springs eternal."
The Wall Street Journal reported that the U.S. Federal Reserve might provide more stimulus to the American economy.
A hint of what the Fed has in mind could come as early as tomorrow, when chairman Ben Bernanke is scheduled to testify on economic developments before the congressional Joint Economic Committee.
Traders also speculated that European politicians will take steps to ease the region's debt crisis soon.
"But the problems that have plagued the eurozone are unlikely to get resolved any time soon because at the heart one is poor design and the euro itself is flawed because there is no fiscal part of it," added Stephenson.
"There's the common currency, the common trading zone but all they have done is create a free trade region just like NAFTA with a common currency but no fiscal control."
In Europe, Britain's benchmark stock index closed up 2.36 per cent, Frankfurt's DAX ran ahead 2.09 per cent and France's rose 2.42 per cent.
The European Central Bank left its benchmark lending rate unchanged on Wednesday.
The central bank has been urged to cut rates to alleviate pressure on Europe's weakened banks and governments, but bank President Mario Draghi has said the bank cannot make up for inaction by governments.
The cost for Spain to borrow got slightly cheaper, with the yield on its key 10-year bond edging down to 6.24 per cent, suggesting that investors are feeling a bit more confident about the debt-laden country's prospects.With files from The Canadian Press and The Associated Press
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