North American markets leaped, as the U.S. Federal Reserve ended years of near-zero interest rates and assured investors that the world’s largest economy is resilient enough to withstand future increases in borrowing costs at a gradual pace.
The S&P/TSX composite index gained 246.51 points, or 1.9%, to close Wednesday at 13,166.08
The Canadian dollar faded 0.31 cents to 72.50 cents U.S., its lowest in more than a decade.
Gold, silver and copper prices rallied.
Oceanagold Corp. gathered 19 cents, or 7.6%, to $2.68, while Barrick Gold Corp. climbed 76 cents, or 7.8%, to $10.53, and Lundin Mining Corp. rose 18 cents, or 5.3%, to $3.57.
Canadian Pacific Railway Ltd. rose $5.45, or 3.2%, to $177.08, after raising its takeover offer for Norfolk Southern Corp. The company is attempting to persuade Norfolk Southern to accept a proposal to create a transcontinental railroad.
Valeant Pharmaceuticals International Inc. jumped $13.82, or 9.2%, to $163.57, as it attempted to restore confidence during an investor conference Wednesday. The drug maker said that the fallout with Philidor Rx Services will cut hundreds of millions of dollars from earnings this quarter and next year.
The energy group retreated as oil fell on fresh evidence of growing global oversupply.
The main culprits among energy plays on Wednesday included Canadian Natural Resources, which fell 68 cents, or 2.3%, and Encana Corp, which lost 26 cents, or 3.4%, to $7.31.
On the economic front, Statistics Canada reported that foreigners invested $22.1 billion in Canadian instruments in October, while Canadian investors added $3.2 billion of foreign securities to their holdings, mostly non-U.S. foreign bonds.
ON BAYSTREET
The TSX Venture Exchange increased 2.46 points to 498.21
All but one of the 13 TSX subgroups were higher, with gold surging 4.6%, metals and mining better by 4.3%, and materials soaring 4%.
The lone laggard was energy, sinking 0.4%.
ON WALLSTREET
U.S. stocks closed higher after the Federal Reserve raised rates for the first time in nearly a decade. Only the energy sector lagged as oil prices resumed their decline.
The Dow Jones industrial average raced ahead 224.18 points, or 1.3%, to finish at 17,749.09, with General Electric leading advancers and DuPont and Exxon Mobil the only decliners.
The S&P 500 added 30 points, or 1.5%, to 2,073.41, in positive territory for the year so far, with utilities leading nine advancers and energy the only decliner..
The NASDAQ index spiked 75.78 points, or 1.5%, to 5,071.13.
The U.S. central bank was widely expected to raise the Fed Funds rate by a quarter point Wednesday, while emphasizing that the pace of tightening will be gradual. The hike was the first since June 2006.
Fed Chair Janet Yellen said in a press conference that policy would remain accommodating and that the significance of the first hike should not be overblown.
In economic news, housing starts rose 10.5% in November, while building permits rose 11%.
U.S. industrial production saw its sharpest decline in more than three and a half years in November as utilities dropped sharply, a sign of weakness that could moderate fourth-quarter growth.
The Fed said Industrial output slipped 0.6% after a downwardly-revised 0.4% dip in October, marking the third straight month of declines. Capacity utilization was 77%
December Flash Manufacturing Purchasing Managers Index fell to from November to 51.3, the weakest improvement in manufacturing sector business conditions in three years
Prices for the 10-year Treasury faded, raising yields to 2.29% from Tuesday’s 2.27%. Treasury prices and yields move in opposite directions.
Oil prices gave back $1.67 a barrel to $35.68 U.S.
Gold prices hiked $11.53 to $1,072.75 U.S. an ounce.
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