TORONTO – The Toronto stock market closed slightly higher Monday as traders played it cautious ahead of a busy week for economic data and earnings news, including the U.S. Federal Reserve’s latest word on interest rates.
The S&P/TSX composite index gained 18.48 points to 14,797.83. The Canadian dollar moved down 0.26 of a cent to 80.23 cents US.
New York’s Dow Jones industrials gained 6.1 points to 17,678.7, the Nasdaq was up 13.88 points to 4,771.76 and the S&P 500 index climbed 5.27 points to 2,057.09.
Markets were unaffected by the election victory of Greece’s anti-austerity Syriza party over the weekend. Syriza wants the eurozone to ease the spending cuts and tax increases required under Greece’s financial bailout program and even forgive some of the country’s rescue loan debt.
“But so what? At the end of the day, they (Syriza) won but the negotiating room that they will have as a party is pretty much zero,” said John Stephenson, president and CEO of Stephenson & Co.
The U.S. Federal Reserve is holding its interest rate meeting on Wednesday. The Fed is expected to start moving rates away from near zero around the middle of this year and traders will be looking for any signs the central bank might move earlier.
But Stephenson thinks they will go later than generally thought.
“Because of all this uncertainty out there, they will be on hold longer than most people think. Consensus is they move in June but I don’t think they move that soon. They’ll move later.”
Other major data points include the latest economic growth figures for Canada and the United States, both out Friday.
Economists believe Canadian gross domestic product grew 0.1 per cent in November. TD Bank (TSX:TD) said Monday that it now expects the economy to grow by just two per cent this year, compared with its December estimate of 2.3 per cent, because of falling oil prices.
TD also said that is expects oil will average US$47 this year. Oil prices have fallen more than 40 per cent since the end of November when Saudi Arabia rejected calls to cut production in order to support prices.
In the U.S., fourth-quarter GDP is expected to come in at an annualized rate of 3.1 per cent, down from a five per cent pace in the third quarter.
On the TSX, lift came from the industrials sector, up one per cent with Canadian National Railway (TSX:CNR) rising 96 cents to $85.44 ahead of earnings coming out Tuesday.
The gold sector ran up 1.75 per cent per cent, while February bullion faded $13.20 to US$1,279.40 an ounce. However, the sector has surged 36 per cent this month while gold prices have steadily advanced.
The base metals sector was ahead 0.8 per cent as March copper rose four cents to US$2.54 a pound.
The energy sector advanced, up 0.3 per cent, with oil in New York closing down 44 cents at US$45.15 a barrel.
Telcos led decliners, down 1.85 per cent with Rogers Communications (TSX:RCI.B) down $1.98 or 4.2 per cent to $45 after Canaccord Genuity (TSX:CF) cut its rating on the stock to hold from buy. It added it expects Rogers to report a “sluggish” quarter when it posts earnings Thursday.