North American stock markets registered solid gains mid-afternoon Wednesday as the U.S. Federal Reserve ended months of speculation and announced it will start cutting back on its monthly asset purchases.
The S&P/TSX composite index rocketed 154.57 points, or 1.2%, to end Wednesday at 13,334.73
The Canadian dollar skidded 0.68 cents to 93.59 cents U.S.
The gold sector proved the lone decliner as Goldcorp was ahead three cents to $22.60 and Iamgold slid 14 cents to $3.55.
March copper was unchanged at $3.32 U.S. a pound while the base metals component rose. First Quantum Minerals gained 52 cents to $17.59.
The energy sector moved ahead with Suncor Energy ahead 89 cents to $36.40.
Imperial Oil Ltd. has applied for regulatory approval to build a new Aspen oilsands project northeast of Fort McMurray, Alta., which would cost an estimated $7 billion. The first phase of Imperial's $12.9-billion Kearl oilsands mine north of Fort McMurray started up earlier this year. Imperial gained $1.06 to $46.43.
Financials were up as Manulife Financial improved by 50 cents to $20.23 and TD Bank climbed $1.60 to $97.41.
The telecom sector was up as federal Industry Minister James Moore said the government will move to prevent wireless providers from charging customers of rival companies more than they charge their own customers for domestic roaming.
The CRTC is already investigating the issue of whether big wireless companies are charging their smaller Canadian competitors too much to use their networks. BCE was up 31 cents to $45.28.
Elsewhere on the corporate front, a report from a federal review panel on Enbridge's proposed Northern Gateway pipeline, which would link the Alberta oil sands with a tanker port on the B.C. coast, will be released Thursday following more than a year of hearings.
The highly-anticipated report on the controversial project will include the panel's recommendations for the project but the final decision on whether the pipeline can go ahead rests with the federal government. Enbridge rose 90 cents to $44.85.
Canadian food company Saputo will face just one rival in the home stretch to acquire Australia's oldest diary processor. Bega Cheese is withdrawing from the race for Warrnambool Butter & Cheese. Saputo's remaining rival is Murray Goulburn, which says its AU$9.50 cash offer is superior to Saputo's, which has a range from AU$9 to AU$9.60 depending on how much stock the Canadian company acquires. Saputo rose 21 cents to $47.98.
On the economic calendar, Statistics Canada reported this morning that October’s wholesale trade strengthened 1.4% to $50.5 billion, compared to a market call for a 0.3% improvement, after two straight months of sub-par growth.
Higher sales were reported in five of seven sub-sectors, representing over 70% of wholesale sales.
ON BAYSTREET
The TSX Venture Exchange grew 4.64 points to 890.71
All but one of the 14 TSX subgroups were higher, with health-care and global base metals heading the parade, each up 2%, while real-estate strengthened 1.7%.
Only a 0.4% decline by gold kept things from being unanimous.
ON WALLSTREET
The Dow Jones industrial average jumped nearly 250 points after the Federal Reserve surprised some experts Wednesday by announcing a modest reduction, or tapering, in its bond buying program.
The blue-chips finished the day ahead 292.71, or 1.8%, to 16,167.97
The S&P 500 index spiked 29.65 points to 1,810.65. The NASDAQ improved 46.38 points to 4,070.06
The Fed will reduce its monthly purchases of mortgage-backed securities and U.S. Treasuries to $75 billion U.S. per month, down from $85 billion.
The bullish response is somewhat surprising, since investors were rattled when Fed Chairman Ben Bernanke first talked about tapering back in May. But investors have had plenty of time to get used to the idea of a slight reduction in the Fed's bond buying. The Fed's decision also can be interpreted as a sign the economy is back on its feet and no longer needs as much stimulus.
Ford shares plunged 6% after the automaker said it expects profits in North America to be lower next year as it rolls out new models in the United States. General Motors and Tesla shares were also lower.
Gogo shares sank after the lockup period for certain holders of the stock expired. Company insiders and underwriters were prohibited from selling shares for 180 days after the in-flight Internet provider went public on June 20.
Shares of movie theater chain AMC rose 6% after the company raised $331 million U.S. from its initial public offering late Tuesday.
General Mills shares were slightly lower after reporting earnings that missed forecasts, while FedEx shares rose slightly after issuing a decent outlook for the current quarter. Oracle is set to report results after the market close.
Shares of social media companies were under pressure. LinkedIn was hit particularly hard, while Facebook and Twitter suffered more minor losses.
In economic news, the U.S. Commerce Department said the number of new homes breaking ground soared nearly 23% in November from the month prior. But applications for building permits, a leading indicator for new home construction, fell 3% in the month.
Prices for 10-year U.S. Treasuries sagged, raising yields to 2.89% from Tuesday’s 2.84%. Treasury prices and yields move in opposite directions.
Oil prices gained 43 cents to $97.65 U.S. a barrel.
Gold prices docked $6.20 to $1,223.90 U.S. an ounce.
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