TORONTO – The Toronto stock market closed modestly higher Tuesday as a rally in copper prices pushed mining stocks higher while traders looked at the latest assessment of when interest rates might rise and by how much.
The S&P/TSX composite index gained 20.94 points to 14,299.49.
The Canadian dollar was up 0.28 of a cent at 89.61 cents US.
New York markets were also higher as traders looked to see how severe winter weather affected the housing sector.
The Dow Jones industrials ran up 91.19 points to 16,367.88, the Nasdaq added 7.88 points to 4,234.27 and the S&P 500 index climbed 8.18 points to 1,865.62.
Charles Plosser, president of the Philadelphia Federal Reserve Bank, told CNBC he sees the federal funds rate at three per cent at the end of 2015 and four per cent at the end of 2016.
The current target range for the federal funds rate is between zero and 0.25 per cent.
Federal Reserve chairwoman Janet Yellen caught markets unaware last week when she said that the Fed could start increasing rates from near zero about six months after the end of its bond buying program.
But analysts say markets are getting increasingly used to the idea of rates going up.
“After the last Fed meeting, I think it was pretty evident there was a possibility that you may see rates go up quicker than people might have anticipated,” said Sadiq Adatia, chief investment officer of Sun Life Global Investment.
“So I think people are bracing themselves for potentially a rate hike in 2015, maybe a bit earlier than what was initially planned.”
Meanwhile, cold weather continued to limit buying last month as U.S. sales of new homes dropped by 3.3 per cent.
The S&P/Case-Shiller 20-city composite also indicated that U.S. home prices ticked down 0.1 per cent in January in a third month of declines, with 12 of 20 tracked cities posting drops. On a seasonally adjusted basis, home prices in January rose 0.8 per cent.
Commodities advanced as May copper was up six cents to US$3.01 a pound and the TSX base metals sector improved by 3.18 per cent.
The gold sector climbed 0.33 per cent as April bullion inched up 20 cents to US$1,311.40 an ounce.
May crude on the New York Mercantile Exchange erased early gains to decline 41 cents to US$99.19 a barrel, but the energy sector edged 0.2 per cent higher.
The tech sector was also supportive, up 0.34 per cent, but shares of BlackBerry (TSX:BB) gave back some of Monday’s three per cent rise, down six cents to $10.44 ahead of earnings on Friday. Meanwhile, CBC reported Chinese computer company Lenovo was among potential buyers when the company put itself up for sale last year, but the federal government turned thumbs down on the plan.
The TSX was pressured by defensive sectors such as utilities and consumer staples.