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TSX, New York markets hold steady ahead of closely-watched Bank of Japan meeting

TORONTO – North American stock markets ended Thursday with little change, as traders awaited to see if the Bank of Japan will be spurred into action to help stimulate its lagging economy.

The Toronto Stock Exchange’s S&P/TSX composite index added a meek 6.18 points at 14,552.72, helped by gains from the metals and energy sectors.

The Canadian dollar was up 0.17 of a U.S. cent to 75.98 cents US.

It’s widely expected that the Bank of Japan will announce more stimulus for the world’s third-largest economy, with Japanese Prime Minister Shinzo Abe already announcing 28-trillion yen (US$266 billion) in extra government spending to jump-start growth.

But what investors will be carefully watching for is how those stimulus measures will be implemented.

“People are kind of on the edge of their chairs,” said Michael Greenberg, a portfolio manager at Franklin Templeton Solutions.

The central bank could inject more stimulus in a variety of ways including a rate cut, or additional purchases of exchange-traded funds or corporate bonds.

An overly-aggressive policy, or no measures at all, have the potential to cause stock markets to see increased volatility, noted Greenberg.

That’s because traders have expected that stock markets will continue to be fuelled by easy fiscal and monetary policies from central banks.

“Each central bank announcement is being looked at with a fine-tooth comb to try to gauge: Are they going to continue to be supportive of markets or are they getting to the end of their ability to do that?” he asked.

Meanwhile, it seemed like stock markets had little reaction to the U.S. Federal Reserve’s decision to hold interest rates steady despite hints that it may still be poised for a hike as early as its September meeting.

In New York, the Dow Jones industrial average was down 15.82 points at 18,456.35, the broader S&P 500 composite index was ahead 3.48 points to 2,170.06 and the Nasdaq composite jumped 15.17 points to 5,154.98.

In corporate news, Facebook shares rose 1.35 per cent to US$125 after the social networking company reported earnings that more than doubled from a year earlier, topping analysts’ views.

Meanwhile, Ford Motor Co. saw its shares tumble after it reported that its profits fell nine per cent to US$2 billion in the second quarter as the automaker dealt with weak sales in the U.S. and China. Its shares were down US$1.13, or 8.2 per cent, to finish at $12.71.

Commodities were mixed as the September crude contract lost 78 cents to US$41.14 per barrel, while September natural gas gained 21 cents to US$2.87 per mmBTU.

The December gold contract was up $6.70 to US$1,341.20 and September copper contracts rose two cents to US$2.21 a pound.

— With a file from The Associated Press

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