Canada's main stock market, the Toronto Stock Exchange, twice
lost strong gains Wednesday - the second time it proved costly.
The first time, mid-morning, the index lost around half of the
100-plus points it was already up from Tuesday's close. On that
occasion, it recovered fairly quickly and pushed on to stand around
150 points higher early afternoon. But then it slumped again, and
this time there was no quick recovery. The index lost all gains and
even slipped in to negative territory late on, before finally
finding some buyers in the final minutes.
Investors and traders were left winded after the United States
Fed's meeting minutes did not shed much light on plans regarding
the timing of the end of its current open-ended asset purchase
program, raising doubts about just how much the U.S. economy has
recovered. This, in turn, cast a cloud over the economy in Canada,
which is the largest trading partner of the States. All of this
uncertainty - on top of weaker commodities - weighed on many stocks
in the resources heavy TSX.
Having said that, the Metals & Mining and Telecom sectors
were the only ones to make gains.
It was a volatile day for gold futures, which spiked ahead of
Fed chairman Ben Bernanke's speech but then swung lower as the
markets digested the content of his speech for clues on when, or
if, the FOMC will begin to curb its loose monetary policies. Gold
peaked at $1,410 per ounce ahead of the speech and closed down at
$1,367.40 per ounce after the Fed Reserve Minutes showed many
members want to see further progress being made in the U.S.
economic recovery before they move to slow or end stimulus.
Crude-oil futures settled down 2% today, pressured by the latest
inventory data. The U.S. Energy Information Administration said
crude supplies declined by 300,000 barrels for the week ended May
17. Analysts polled by Platts expected a 1.2 million-barrel
decline. Also adding downward pressure to oil prices was Fed
Chairman Ben Bernanke's speech in which he said that if economic
improvement continued, "We could in the next few meetings take a
step down in our pace" of bond purchases.
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