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TORONTO - North American markets closed higher Tuesday, building on the momentum of recent record highs as investors bet that the upward trend has not yet run its course.
Both the Dow Jones industrial index and S
"Markets, globally, in general are on the rise," said Gareth Watson, vice-president of the investment management group at Richardson GMP Ltd.
"The flow of money in the equity markets has not come to a halt and we haven't necessarily had any negative headlines that... would likely pull these markets back from an economic standpoint. These are not huge gains... but I think it's a continuing momentum from the rise we've had for the past number of weeks now."
U.S. markets climbed following the latest survey by the National Federation of Independent Business that found small business owners were slightly more optimistic in April.
It also surged despite a speech by Charles Plosser, president of the U.S. Federal Reserve's Philadelphia regional bank, in which he said the Fed should "seriously look at tapering off asset purchases" now that the U.S. economy was showing signs of improvement.
Watson said the comments may have had little effect on investors, because Plosser isn't a voting member on the Fed committee that sets interest rates and is known to be hawkish in his views.
The Fed has been buying US$85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing rates down, a move known as quantitative easing.
The U.S. economy grew 2.5 per cent in the first quarter and, while hiring has picked up, the unemployment rate is still at 7.5 per cent, above the Fed's target of 6.5 per cent. As a result the central bank is expected to keep buying bonds.
There was no major economic news out of Canada, but on the corporate front, BlackBerry shares fell more than three per cent, or 49 cents, to $15.55 after the smartphone maker's chief executive, Thorsten Heins, announced the company will launch another smartphone with a physical keyboard this summer. Heins also said its BBM messenger service will be available to Android and iPhones by the end of the year.
Canada's largest home improvement retailer, Rona Inc. (TSX:RON), saw its shares drop nearly five per cent, or 51 cents, to $10.12 after reporting it has decided not to sell its network of big box stores outside Quebec as it continues to finalize its turnaround plan. Rona had a $22.7-million adjusted net loss applicable to participating shares, or 19 cents per share in the first quarter. That was up from a loss of $13.5 million or 11 cents per share last year. Overall revenue was down slightly, slipping by $4.6 million to $929.4 million.
Meanwhile, Tim Hortons shares were up 0.84 per cent, or 47 cents, to $56.12 as the coffee chain said it was buying back more than a million of its common shares from an unidentified seller by the end of this month. The cost of the Tim Hortons stock buyback wasn't disclosed.
In commodities, the June crude oil contract dipped 96 cents to US$94.21 a barrel as the TSX energy sector experienced a lift of 0.67 per cent. Shares in oil and gas company Husky Energy (TSX:HSE) were up more than two per cent at C$30.60.
June bullion dropped $9.80 to US$1,424.50 an ounce as the gold sector fell by 0.24 per cent, after being positive after fluctuating for most of the day. Shares in Barrick Gold (TSX:ABX) were up 1.76 per cent, while Aurizon Mines (TSX:ARZ) increased by 4.46 per cent.
July copper dipped eight cents to US$3.28 a pound, as the metals and mining sector was the leading decliner, down by 1.23 per cent. Shares in Teck Resources (TSX:TCK.B) fell more than two per cent, while Thompson Creek Metals (TSX:TCM) was down more than five per cent.
The health-care sector was the leading advancer on the TSX with a gain of 2.11 per cent.
Note to readers: This is a corrected story: A previous version said copper prices dropped 71 cents