Canadian stocks slipped in early trading Wednesday as gold prices plunged in the face of a strengthening U.S. dollar, which rallied after the Federal Reserve issued a modest upgrade of economic forecasts the day before.
The S&P/TSX composite index was off 24.06 points, or 0.19 per cent, to 12,513.63 shortly after the open.
Gold prices were a drag on the resource-heavy benchmark index, falling, for the third straight session, by $47.80 U.S. an ounce to $1,646.40 U.S..
Yet global markets were generally upbeat, hitting eight-month highs after the Fed on Tuesday improved its outlook for the United States, the world's largest economy, saying it expects "moderate" growth over coming quarters versus the "modest" growth the central bank said it expected in January.
Markets also rallied around news that major U.S. banks had passed stress tests showing they had enough capital on hand to withstand a severe downturn in the economy.
"A little bit of good news goes a long way, and we're seeing it played out in the market at the moment," Peter Sullivan, HSBC's head of equity strategy for Europe and the U.S., told Reuters.
Oil prices were lower, dipping 44 cents to $106.80 U.S. a barrel.
The Canadian dollar slipped five basis points to $1.0104 U.S..
In corporate news, Montreal-based Mega Brands reported a 97 per cent drop in adjusted fourth-quarter profit, hurt mainly by lower toy sales in the United States. The toymaker's quarterly net income fell to $234,000 from $11.3 million a year ago.
Meanwhile, earnings at Toronto's GMP Capital fell to $2.4 million, or two cents a share, from $46 million, or 50 cents a share a year ago, due to weakness in its capital markets segment.
In Europe, London's FTSE added 0.34 per cent to 5,976.13, the Paris CAC rose 0.68 per cent to 3,574.39 and Frankfurt's DAX gained 1.08 per cent to 7,071.55
In Asia, Japan's surging Nikkei added 1.53 per cent to 10,050.52, the first time it has crossed that mark in about eight months. The benchmark Japanese index is up almost 20 per cent since early January. Hong Kong's Hang Seng slipped 0.15 per cent to 21,307.89.
On Tuesday, the S&P/TSX composite index rose 109.68 points, or 0.88 per cent, to 12,537.69, while the Dow Jones industrial average gained 217.97 points, or 1.68 per cent, to close at 13,177.68 - its highest level since 2007 - and the Nasdaq rose 56.22 points, or 1.88 per cent, to 3,039.88, its highest level since 2000.
