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The close: Dow, TSX surge after losing streak ends

JPMorgan Chase CEO Jamie Dimon leaves after speaking at a Deutsche Bank Securities conference on Monday, May 21, 2012 in New York.

Jin Lee/AP

North American stocks ended a six-day losing streak with a bang on Friday, driven partly by a rally among U.S. banks and speculation that China will stimulate its economy after reporting weaker economic growth.

The Dow Jones industrial average closed at 12,777.09, up 203.82 points or 1.6 per cent.

The broader S&P 500 closed at 1,356.77, up 22.01 points or 1.7 per cent. The index had fallen a total of 2.8 per cent during a six-day slide.

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In Canada, the S&P/TSX composite index closed at 11,514.53, up 89.06 points or 0.8 per cent, also breaking a six-day losing streak.

U.S. banks were the strongest group within the S&P 500. While JPMorgan Chase & Co. said that its recent trading loss has ballooned to $5.8-billion (U.S.), more than double its first estimate, the bank nonetheless reported earnings of about $5-billion in the second quarter, or $1.21 a share. The shares rose 5.5 per cent.

Wells Fargo & Co. rose 3.2 per cent after releasing its quarterly results – but the entire sector seemed to get an earnings-fuelled lift: Bank of America Corp., which releases its results next week, rose 4.6 per cent.

The overall gains in the market come despite some weak economic reports. The Thomson Reuters/University of Michigan consumer sentiment index fell to 72 from 73.2 in June.

As well, China reported that its economy slowed to growth of 7.6 per cent in the second quarter, at an annualized pace.

However, weak might be good here: A growth reading below the 8 per cent has typically brought a stimulative response from policy makers.

In Europe, stocks also moved higher: The U.K.'s FTSE 100 rose 1 per cent and Germany's DAX index rose 2.2 per cent.

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In Canada, commodity producers were among the strongest performers after key commodity prices moved higher.

Gold rose to $1,592 an ounce, up $26.70. Crude oil rose to $87.10 a barrel, up $1.02. Suncor Energy Inc. rose 1.9 per cent and Barrick Gold Corp. rose 0.5 per cent.

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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


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