Toronto, Wall St. cautious as U.S. Fed begins two-day policy meeting | iNFOnews | Thompson-Okanagan's News Source
Subscribe

Would you like to subscribe to our newsletter?

Current Conditions Mostly Cloudy  4.0°C

Toronto, Wall St. cautious as U.S. Fed begins two-day policy meeting

TORONTO - Toronto and Wall Street markets were cautious Tuesday, as the U.S. Federal Reseve heads into a two-day meeting that will likely end with the central bank announcing that it's ready to start reducing its monetary stimulus.

The Canadian dollar was slightly higher, up 0.09 of a cent to 97.08 cents US.

Though hiring and economic growth in the United States remain soft, the Fed is widely expected to slow the pace of its US$85-billion-a-month in bond purchases. This highly anticipated move could happen as early as Wednesday.

Most economists expect the Fed's initial "tapering" move to be small — a reduction of between $10 billion to $15 billion of monthly purchases in Treasurys and mortgage bonds.

The program, dubbed quantitative easing, was designed to keep long-term loan rates low to get people to borrow and spend and invest in the stock market.

U.S. futures were mixed in pre-trading. The Dow Jones industrial futures was ahead by five points to 15,436, the Nasdaq futures was up 1.5 points to 3,162.50 and the S&P 500 futures fell 0.2 of a point to 1,691.

North American markets had closed higher on Monday after economist Larry Summers, the frontrunner to head the central bank, bowed out.

Summers had long been perceived as an opponent to the Fed's aggressive bond-buying program, and his withdrawal to succeed current Fed chairman Ben Bernanke had investors predicting that Fed vice-chair Janet Yellen, a supporter of the stimulus program, may be next in line for the top job.

There wasn't much excitement on the commodity markets either. Oil prices declined as the October crude contract dipped 33 cents to US$106.26 a barrel. December bullion saw an uptick of $4 to US$1,321.80 an ounce, while December copper was unchanged at US$3.22 a pound.

European stocks opened lower. Britain's FTSE 100 fell 0.3 per cent to 6,600.01. Germany's DAX shed 0.2 per cent to 8,593.76. France's CAC-40 lost 0.4 per cent to 4,136.91.

The European Auto Manufacturers' Association reported that car sales in Europe were still sagging despite the return of modest economic growth.

For the first eight months of the year, passenger car sales in the European Union were off 5.2 per cent to 7.84 million compared with the same period last year. That's the lowest January-August figure since the group started keeping track in 1990.

New car registrations in August fell 5 per cent from a year ago to 653,872, the association said.

But it wasn't all bad news overseas, Germany's index of economic optimism among investment professionals rose more than expected in September, underlining stronger growth prospects in Europe's largest economy.

The ZEW rose to 49.6 points from 42 in August. Market analysts had expected an increase to 45. The rise is being attributed to eased fears that a crisis over high public debt will occur, along with market fears of a government default. The eurozone returned to modest growth of 0.3 per cent in the second quarter. Germany had a more robust expansion at 0.7 per cent. The survey remains above its long-term average of 23.8.

Meanwhile, overnight, Japan's benchmark index failed to hold its early gains. The Nikkei 225 in Tokyo fell 0.7 per cent to close at 14,311.67. Hong Kong's Hang Seng fell 0.3 per cent to 23,180.52. South Korea's Kospi dropped 0.4 per cent to 2,005.58. Australia's S&P/ASX 200 rose 0.1 per cent to 5,251.20.

News from © The Canadian Press, 2013
The Canadian Press

  • Popular kamloops News
View Site in: Desktop | Mobile