Newspaper article The Canadian Press

Markets Close Higher Ahead of Fed Meeting, Slightly Weak U.S. Retail Sales

Newspaper article The Canadian Press

Markets Close Higher Ahead of Fed Meeting, Slightly Weak U.S. Retail Sales

Article excerpt

Markets close higher ahead of Fed meeting

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TORONTO - North American markets closed higher Friday amid a spate of economic news from the United States and Canada as attention now focuses on next week's meeting of the U.S. Federal Reserve.

The S&P/TSX composite index climbed 22.34 points to 12,723.40. The Canadian dollar was down 0.20 of a cent to 96.65 cents US.

Americans bought more cars, furniture and electronics in August, but held back on most other retail purchases. The U.S. Commerce Department says spending at retail businesses rose 0.2 per cent last month, the smallest gain in four months.

Analysts had been expecting a gain of 0.4 per cent in August but revised figures issued Friday showed July spending was stronger than first estimated. The department's revised estimate for July was a gain of 0.4 per cent, up from 0.2 per cent

"It came out pretty much in the wash. A tad to the negative side but not by very much," said Bob Gorman, chief portfolio strategist at TD Waterhouse. "I would say the figures were marginally softer than anticipated but only marginally."

Gorman said the figures likely aren't strong enough to change the Fed's mind about starting to reduce its stimulus at the end of its two-day policy meeting next Wednesday.

The Fed has been buying US$85 billion in bonds each month in an attempt to keep a lid on interest rates and to boost lending. Currently, most analysts expect the central bank to begin tapering its stimulus by US$10 billion.

"Generally speaking, people are not making huge bets prior to the Fed announcement," said Gorman.

Trading was light as the TSX and Wall Street headed into the weekend and the start of the Jewish Yom Kippur holiday at sundown.

The Dow Jones industrials jumped 75.42 points to 15,376.06, the Nasdaq was up 6.22 points at 3,722.18 and the S&P 500 was ahead 4.57 points at 1,687.99.

Meanwhile, higher energy costs pushed U.S. wholesale prices up 0.3 per cent last month. Prices were up a modest 1.4 per cent over the past year, the lowest year-over-year gain since April.

The Commerce Department reported that U.S. businesses restocked their shelves and warehouses in July at the fastest pace since January as sales rose, a hopeful sign for economic growth. …

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