Markets, loonie up as oil continues to rise

TORONTO -- The Toronto stock market was set to cap its second strong weekly advance in a row after a dismal start to the year as oil prices continued to improve.

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At mid-afternoon Friday, the S&P/TSX composite index was 131.10 points higher at 12,723.03 and up a net 330 points for the week after shedding more than 246 points on Monday.

This week's gains followed a 316-point advance last week after a three-week string of losses that saw the TSX drop more than 1,200 points in the three weeks that followed the Christmas break.

The commodity-sensitive Canadian dollar also continued to trend higher on the strength in oil, up 0.29 of a U.S. cent at 71.38 cents US after having rebounded from below 69 cents US early last week.

In New York, markets were sharply higher, helped by a big gain in technology companies after Microsoft posted a strong fourth quarter, as well as strong results from both Visa and MasterCard.

The Dow Jones industrial average soared 318.11 points to 16,387.75 on the heels of a 125-point advance Thursday. The S&P 500 rose 37.00 points to 1,930.36 and the Nasdaq added 80.27 points to 4,586.94.

In commodities, the March contract for North American benchmark crude oil closed up 40 cents at US$33.62 a barrel. It has now risen 18.5 per cent since finishing as low at US$28.36 last week.

Elsewhere in commodities, March natural gas shot up 11.6 cents to US$2.298 per mmBtu, while April gold added 30 cents to US$1,116.40 an ounce and March copper rose 1.55 cents to US$2.067 a pound.

Overseas, Asian markets began the day with a big rally after the Bank of Japan announced a surprise stimulus measure by cutting its key overnight interest rate to a negative 0.1 per cent. Effectively, the move means that commercial banks will be charged for leaving large amounts of cash parked at the central bank.

The policy is intended to encourage banks to lend more money in order to stimulate investment and growth in Japan's struggling economy.

Japan's Nikkei 225 jumped 2.8 per cent on the news, while Hong Kong's Hang Seng gained 2.5 per cent and the Shanghai composite rose 3.1 per cent.

European indexes also rose, with Germany's DAX up 1.6 per cent, France's CAC 40 up 2.2 per cent at Britain's FTSE 100 closing 2.6 per cent higher.



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