Skip to main content

The Globe and Mail

The close: Dow, TSX make impressive rebound

A trader looks at electronic boards, which are reflected on a table, at the stock exchange in Madrid July 6, 2012.

ANDREA COMAS/REUTERS

Stocks made an impressive rebound from an early dip on Tuesday, after investors took an upbeat view on Federal Reserve chairman Ben Bernanke's testimony in Washington.

The Dow Jones industrial average closed at 12,805.32, up 78.11 points or 0.6 per cent – marking a 160-point rebound from its low point during the day.

The broader S&P 500 closed at 1,363.67, up 10.03 points or 0.7 per cent.

Story continues below advertisement

In Canada, the S&P/TSX composite index closed at 11,571.19, up 50.01 points or 0.4 per cent.

Although there some upbeat economic reports for investors to digest – including a 0.4 per cent gain in U.S. industrial production in June, a rise in homebuilder confidence and tame inflation – the focus was largely on Mr. Bernanke's testimony before the Senate Banking Committee.

Mr. Bernanke's remarks weighed on major indexes after he said that reducing unemployment would be "frustratingly slow" but offered no solutions in the form of additional stimulus – dashing some expectations that he would use the opportunity to outline the need for an economic booster.

However, markets rebounded soon after, presumably on the hope that stimulus was still coming.

The Fed did offer a form of stimulus in its last monetary policy report.

However, with economic conditions deteriorating since then – highlighted by a disappointing monthly payrolls report for June – many observers have been counting on the Fed to take a more aggressive stance.

Meanwhile, the Bank of Canada held its key interest rate unchanged at 1 per cent on Tuesday, as expected.

Story continues below advertisement

While it trimmed its economic growth outlook to 2.1 per cent this year from 2.4 per cent previously, it maintained its line that interest rates could move higher. Some observers have been expecting the central bank to cut its key rate before increasing it.

Goldman Sachs Group Inc. reported that its second quarter earnings fell 11 per cent from last year, topping expectations for a bigger slide. The shares rose 0.3 per cent.

Johnson & Johnson beat expectations with its quarterly earnings but lowered its full-year guidance. The shares rose 0.8 per cent.

Coca-Cola Co. rose 1.6 per cent after reporting that its net earnings fell 0.4 per cent over last year, due to rising costs. However, revenues beat expectations.

Crude oil continued its steady rebound, rising to $89.22 (U.S.) a barrel, up 79 cents. Among Canadian producers, Suncor Energy Inc. rose 0.9 per cent.

Report an error Licensing Options
About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.