Dow has biggest gain in 3 years, TSX up 132 points
A fresh decline in oil prices halted the advance of Toronto stocks
New York stocks shot sharply higher on Thursday, with the Dow seeing its biggest gain in three years -- a 400-point jump.
The West Texas Intermediate contract traded in New York declined another $1.81 to $54.66 US a barrel. Brent, the most international oil contract, was again below $60 US, trading at $59.53, down $1.65.
A fall in world demand for oil and a glut in supply have made oil prices volatile. Traders aren’t certain how low prices will go and keep testing for a bottom.
Energy stocks edged slightly higher and financials gained ground even as the price of crude oil turned lower again after stabilizing over the past two days.
The Canadian dollar moved higher to 86.29 US.
The Dow Jones industrial average rose 421.28 points, or 2.4 per cent, to 17,778.15. It is up 2.9 per cent this week and 7.3 per cent on the year.
The U.S., which is a net importer of oil and has a broader-based economy, is less sensitive to crude oil movements.
But today's optimism was driven by the Fed's soothing remarks on interest rates yesterday. Traders in New York felt more confident about the pace of future interest rate hikes after the U.S. central bank said it could be "patient" in deciding when to hike rates.
Chair Janet Yellen forestalled any suggestion of a rise in rates in the first quarter of 2015, meaning rates likely won’t rise until the spring of 2015.
Some analysts suggested the more positive tone on markets this week is partly due to investors realizing that lower oil prices are a big positive for a largely depressed global economy.
"Six months from now, you should start to see the benefits of lower oil prices and you`ll start to see growth pick up globally," said Norman Raschkowan, senior partner at Sage Road Advisers.
"It`s going to be very positive for Europe, which had been skirting with deflation and concerns about falling back into recession. This should put an end to that speculation."
With files from the Canadian Press