Stock markets in Toronto and New York ended the trading day with more losses Wednesday as oil prices slipped further and investors examined remarks from the chair of the U.S. Federal Reserve for interest rate clues.
The main index of the Toronto Stock Exchange fell 97 points, or 0.8 per cent, to close at 12,186. The Dow Jones industrial average slid almost 100 points to end the day at 15,915.
Both benchmarks had been up by triple digits earlier in the day.
- Janet Yellen sticks with plan to hike rates — but that can change, she tells Congress
- Oil closes below $28 US a barrel, dragging TSX down 253 points
- IEA says oil supply will far outstrip demand in 2016
Investors and traders closely watched congressional testimony from U.S. Federal Reserve chair Janet Yellen for clues to the outlook for monetary policy.
Yellen told Congress there is reason to believe the United States will continue on a path of moderate growth that will allow the Fed to pursue "gradual" interest rate hikes.
Yellen said that while there are global threats to the U.S. economy, the Fed still plans to raise interest rates gradually. But she acknowledged that the Fed would move slower "if the economy were to disappoint."
Sharp falls in global stocks and weak U.S. economic data have led markets to slash expectations for the pace and extent of Fed interest rate rises. The Fed raised its key lending rate in December — the first such hike in almost a decade.
Oil prices, which fell eight per cent on Tuesday to their lowest since September 2003, were volatile following the release on Wednesday of new inventory supply figures. U.S. crude oil inventories fell by 754,000 barrels in the past week, versus expectations of a 3.2-million barrel increase, the Energy Information Administration said.
Benchmark West Texas Intermediate crude dropped 49 cents to settle at $27.45 US a barrel in New York trading — a new 13-year low.
The Canadian dollar closed down more than a quarter of a cent at 71.77 cents US.