North American stock markets followed overseas markets higher on Thursday, after China cut interest rates for the first time in four years, raising investor hopes that other governments may also be ready to launch further monetary stimulus to try to boost the economy.
In Toronto, the S&P/TSX advanced 58.76 points, to 11,692.16 points. All sectors of the index rose, led by energy and materials.
Shares of Lululemon Athletica Inc. fell 7.5 per cent, after the yoga wear retailer reported higher first-quarter profit but said inventories rose and warned that same-store sales growth would slow.
In New York, the S&P 500 climbed 13.18 points, to 1,328.31, and the Dow Jones industrial average gained 129.49 points, to 12,544.28 points, in a broad rally. Advancing issues outpaced declining stocks by about 10 to one.
Investors will be focusing on remarks from Federal Reserve Chairman Ben Bernanke, who testifies before Congress this morning on the economic outlook. Any sign that the world's most powerful central bank may be ready to embark on more stimulus could send stocks and commodity prices higher.
However, Mr. Bernanke may have a hard time justifying additional quantitative easing given that the U.S. economy appears to be stumbling forward. The latest unemployment data, released this morning, showed that the people applying for U.S. jobless benefits fell last week. New applications for weekly benefits dropped by 12,000, to a seasonally adjusted 377,000, down from an upwardly revised 389,000 the previous week.
The price of gold fell $11.70 (U.S.) to $1,622.50 an ounce after the Fed gave a fairly upbeat assessment of U.S. economic conditions in its Beige Book survey, released late on Wednesday. Gold bulls had been hoping that a weaker read on the economy would have forced the Fed to loosen its monetary policy.
Oil prices climbed by $1.29 a barrel, to $86.31. The price of copper rose 4.2 cents, or 1.2 per cent, to $3.421 a pound. And the Canadian dollar increased against the greenback by 0.41 cents to 0.97 cents.