U.S. Federal Reserve chair Janet Yellen cautions against reading too much into the Fed’s newly released chart showing where policy makers stand on interest rates. ‘There’s a lot of uncertainty around it,’ she says.JOSHUA ROBERTS/Reuters
The Toronto stock market closed lower as the U.S. Federal Reserve did just what many traders expected.
The Fed said its quantitative easing program will wrap up at the end of the month as scheduled, kept its key interest rate unchanged at close to zero and said it was in no hurry to hike rates.
The S&P/TSX composite index fell 96.68 points to 14,527.57. The Canadian dollar lost 0.16 of a cent to 89.36 cents (U.S.). All 10 industries in the benchmark Canadian equity gauge declined today. Trading was 3.5 per cent below the 30-day average.
U.S. indexes were also lower as the Dow Jones industrials dropped 31.44 points to 16,974.31, the Nasdaq declined 15.06 points to 4,549.23 and the S&P 500 index shed 2.75 points to 1,982.3.
Some traders viewed the completion of the QE stimulus with trepidation since the program also helped encourage the strong rally on stock markets over the past few years.
Markets had looked for reassurance that the Federal Reserve would keep short-term rates low after QE ends and got it as the Fed kept words "considerable period" in its announcement.
Toronto-Dominion Bank and Royal Bank of Canada, the nation's largest lenders, paced losses in financial shares. Barrick Gold Corp. retreated 4.3 per cent as gold prices fell. Teck Resources Ltd. gained 1.8 per cent after boosting its forecast for zinc-concentrate production. Horizon North Logistics Inc. plunged 31 per cent after earnings fell short of analysts' expectations.
Barrick Gold lost 4.3 per cent to $14.45 (Canadian), headed for the lowest close since 1992, as the gold producer prepares to report earnings after the market close. Gold futures fell, extending losses, after the central bank decision cut demand for the metal.
Bankers Petroleum Ltd. climbed 1.2 per cent to $4.32 and Athabasca Oil Corp. increased 1.2 per cent to $3.90. Brent crude rose to a two-week high after OPEC's Secretary-General said the recent plunge in prices doesn't reflect the balance between supply and demand.
With files from Bloomberg News