TORONTO – Markets in Toronto and on Wall Street soared after the Federal Reserve decided to hold off on plans to reduce stimulus until it sees greater strength in the U.S. economy.
The S&P/TSX composite index closed up 97.29 points to 12,931.40 — the highest level it’s been since July 2011. The Canadian dollar surged 0.70 of a cent to 97.83 cents US
In a statement after its two-day meeting, the Fed says it won’t slow the $85 billion a month in bond purchases until it sees more conclusive evidence that the U.S. economic recovery will be sustained.
The bond purchases are intended to keep long-term loan rates low to encourage borrowing and spending. It had been widely expected that the Fed would announce a start to reducing its bond purchases as early as this month. The Fed meets again in October.
On Wall Street, both the Dow Jones industrials and the S&P 500 closed at record highs. The Dow surged 147.21 points to 15,676.94, and the S&P climbed 20.76 points to 1,725.52. The Nasdaq racked up a solid 37.94 points to 3,783.64
The news that the Fed will continue to pump stimulus money into Treasurys and mortgage bonds initially lifted December bullion substantially, but the gains were not sustained as it closed down $1.80 to US$1,307.60 an ounce. The October crude contract gained $2.65 cents to US$108.07 a barrel while December copper was ahead six cents to US$3.28 a pound.
© The Canadian Press, 2013