Loonie flirts with 73 cents, TSX also rises

TORONTO -- The Toronto stock market and the loonie were both ahead for a second consecutive session Thursday as metal prices continued to trend higher in the face of a weakening U.S.

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At mid-afternoon, the S&P/TSX composite index was up 148.01 points at 12,741.03, its second triple-digit increase in as many days.

The Canadian dollar was also higher for a second day, up 0.15 of a U.S. cent at 72.76 cents US after having soared 1.32 cents Wednesday in its biggest one-day gain in almost four years.

In New York, markets were mixed, with the Dow Jones industrial average up 18.94 points to 16,355.60, while the broader S&P 500 lost 3.60 points to 1,908.93. The Nasdaq composite fell 15.29 points to 4,488.95.

In commodities, the April gold bullion contract rose $13.70 to US$1,155.00 a troy ounce, while the March copper contract added three cents to US$2.12 a pound, helping make mining issues among the leading advancers on the TSX.

Meanwhile the March oil contract, which enjoyed a big run-up of $2.40 a barrel Wednesday, gave back 60 cents to US$31.68, while March natural gas fell seven cents to US$1.97 per mmBtu.

Some of the recent strength in commodities can be attributed to the falling greenback. Commodities are priced in U.S. dollars so as it falls it makes them more affordable to holders of other currencies.

The U.S. dollar has weakened recently against many other major currencies amid indications of a slowdown in the American economy and growing expectations that the U.S. Federal Reserve will decide against further interest rate increases later this year.

There was some more bad news for the U.S. economic front Thursday as the U.S. Commerce Department reported U.S. factory orders fell 2.9 per cent in December. It was the fourth such contraction in the last five months and closed out a year in which demand for American manufactured goods retreated for the first time in six years.

Meanwhile, the Labor Department reported that U.S. productivity fell three per cent in the fourth quarter in the biggest such quarterly decline in nearly two years.

"The market is starting to price in a small chance of recession, not some realistic chance, but enough of a chance to give investors pause and reposition," Khoa Le, who co-heads a derivatives trading desk at Credit Suisse, told The Associated Press.


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