North American markets that surged after the Federal Reserve’s Open Market Committee statement took a bit of a step back on Wednesday.
Fed chairman Ben Bernanke signalled a slowly-but-steadily improving economy, which took a bit of the air out of gold prices — because the metal is less attractive as a safe haven in good times — and weighed on Canada’s benchmark stock index.
At midday in Toronto the benchmark S&P/TSX composite index had fallen about 151 points, or 1.20%, to 12,387, with the materials sub-sector posting the biggest loss, down 3.54 per cent, while energy lost 1.64%.
The price of gold had tumbled US$49.20 to US$1,645.00 an ounce at midday. Oil was off by 65 US cents at US$106.06 a barrel.
The Canadian dollar slipped 28 basis points to $1.0081 in late-morning trading.
In the U.S., markets were mixed after the Fed released results of stress tests on U.S. banks.
“There’s some digesting going on,” Richard Sichel, chief investment officer at Philadelphia Trust Co., told Bloomberg. “There’s pretty good news out there. The stress tests results were very good. Overall, economic news has been better-than-expected. Yet all that gave a really good push to stocks. So, there’s nothing negative in a sideways market after that occurs.”
The Dow Jones industrial average was up about 14 points, or 0.10%, to 13,191 at midday, while the Nasdaq composite had slipped about two points, or 0.06%, to 3,038.
Asian markets were mixed on Wednesday, with Tokyo’s Nikkei rising 1.53% while Hong Kong’s Hang Seng slipped 0.15%. In Europe, the FTSE in London edged up 0.03%, the CAC in Paris rose 0.49%, and Frankfurt’s DAX advanced 1.22%.
