NEWS

TSX, Dow sharply higher today

10/17/2014 12:00 EDT | Updated 12/17/2014 05:59 EST
Markets turned sharply positive today, after three weeks in which stocks were beaten down by falling oil prices and worries about a global economic slowdown.

The main Toronto stock index was up 203 points at 14,256 in late morning, as traders sought bargains among more cheaply priced stocks.

They were buying up financial stocks, energy stocks and railroads, all sectors that have been hard hit over the last month.

Today’s rise followed a 183-point surge on Thursday, but the Toronto Stock Exchange is still down 10 per cent since its high in September.

The Canadian dollar inched above 89 cents US to 89.04, after Statistics Canada reported the cost of living is rising at an annual rate of two per cent.

That figure is considered a sign of a healthy economy at a time when Europe is worried about deflation.

Oil contracts in New York rose 78 cents to $83.48 US a barrel, good news for Canadian energy producers and a sign the long slide in oil prices may be over.

U.S. indexes also registered solid gains, with the Dow up 229 points at 16,346, the S&P 500 up 18 points at 1,890 and the Nasdaq up 61 points at 4,279.

Traders were encouraged by comments from St. Louis Federal Reserve Bank president James Bullard, that the Fed should consider delaying the end of its massive quantitative easing program.

The Fed is set to stop making purchases of U.S. bonds next month, and investors had feared that interest rates might rise shortly after the bond-buying program stopped.

U.S. markets have so far avoided formally falling into correction, defined as a drop of 10 per cent. By Thursday, the Dow was down seven per cent and the S&P 500 eight per cent.

No one is yet ready to declare the volatility over. There is often a calm period or a bounce back upward amid a strong correction.

And geopolitical concerns, including the effects of the Ebola outbreak and tensions between Russia and Ukraine, still hang over markets.

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