North American markets rise on strong U.S. economic data
Major North American indices advanced Wednesday as the U.S. released a series of strong economic data that showed the economy’s readiness should the nation’s central bank raise its benchmark interest rate again.
The gross domestic product in the U.S. grew at an annual rate of three per cent between April and June, said the U.S. Commerce Department, which is the fastest pace in two years. The department also raised its estimate for economic growth.
Meanwhile, private businesses in the U.S. added 237,000 jobs in August, according to a report by ADP Research Institute.
“That’s actually helping the markets,” said Noman Ali, a portfolio manager with Manulife Asset Management. “Because the economy is stronger than what’s been expected and so people are less worried about the Fed raising rates in a slowing economy.”
The Toronto Stock Exchange’s S&P/TSX composite index rose 50.43 points to 15,133.13.
In New York, the Dow Jones industrial average gained 27.06 points to 21,892.43, the S&P 500 index advanced 11.29 points to 2,457.59, and the Nasdaq composite index climbed 66.42 points to 6,368.31.
On Bay Street, weakness in energy and gold stocks offset some of the growth.
Both sectors were among the worst performing of the TSX as their corresponding commodity prices fell.
The October crude contract fell by 48 cents to $45.96 (U.S.) per barrel and the December gold contract declined by $4.80 to $1,314.10 an ounce.
Oil prices fell even as Tropical Storm Harvey continued to rain on the Gulf region. On Tuesday, the largest oil refinery in the U.S. was shut down and the operator of a major pipeline carrying fuel to the East Coast said it was running at a reduced rate.
Read more:Harvey’s Gulf Coast refining disruption expected to be measured in months
Meanwhile, the precious metal fell in worth as the economic data strengthened the case for the Fed raising rates, which is negative for gold, said Ali.
The Canadian dollar was trading at an average price of 79.33 cents U.S., down 0.57 of a U.S. cent.
Elsewhere in commodities, the October natural gas contract shed 4.4 cents to about $2.94 per mmBTU and the December copper contract retreated about 1.8 cents to roughly $3.09 a pound.
With files from the Associated Press