Loonie hits 10-month high, U.S. stocks sink

Loonie 20141125

The loonie hit its highest level since late June 2015 on Thursday as it closed at 79.69 cents US. (Jonathan Hayward/Canadian Press)

Stock markets in New York finished solidly in the red Thursday amid the latest round of disappointing data that showed U.S. economic growth retreating to levels not seen in two years.

The Dow Jones industrials plunged 210.79 points to 17,830.76, while the broader S&P 500 fell 19.34 points to 2,075.81 and the tech-heavy Nasdaq plunged 57.85 points to 4,805.29.

Shares in Apple were a major weight, sinking three per cent to $94.81 US after billionaire investor Carl Icahn told CNBC he had sold his stake in the company. A day earlier Apple reported its first revenue decline in over a decade as iPhone sales fell.

In economic news, the U.S. Commerce Department reported that gross domestic product, the broadest measure of economic health, grew just 0.5 per cent in the first quarter, down from 1.4 per cent growth in the fourth quarter.

The January-March performance was the poorest showing since U.S. GDP contracted by 0.9 per cent in the first three months of 2014.

"This has been a very busy week for economic results," said Colum McKinley, vice-president of Canadian equities at CIBC Asset Management.

"Investors are digesting a large number of corporate results being reported in the U.S. and part of the reaction today is just digesting and reacting to some of the that news."

Meanwhile, the S&P/TSX composite index in Toronto was flat, down 1.23 points to 13,886.43 after being propped up early by energy, gold and material stocks.

Dollar nears 80 cents

The loonie continued its recent rise, adding 0.44 of a U.S. cent to 79.69 cents US after hitting an intraday high of 79.90 cents US. The last time the Canadian dollar closed above 80 cents was on June 30, when it finished at 80.06 cents US.

The Canadian currency has gained new life from recent strength in oil prices as well as general U.S. dollar weakness that has followed Wednesday's statement from the U.S. Federal Reserve indicating it is in no hurry to raise interest rates.

Although some may consider the loonie surpassing 80 cents US a psychological threshold for more gains, McKinley said the currency will remain volatile because it is driven so heavily by crude prices.

However, McKinley noted that oil producers have been aggressively cutting capital expenditures and cutting back on production, which should have a positive effect on prices in the coming months.

On Thursday, the June contract for benchmark North American crude rose 70 cents to $46.03 a barrel US, while June natural gas faded eight cents to $2.08 US per mmBtu. July copper added a penny to $2.23 US a pound, while June gold rose $16 to $1,266.450 US a troy ounce.

Let's block ads! (Why?)

Share on Google Plus

About Quang

My blog is the place to update the latest information on sports, science and technology ... If you found this article good, useful please the share for others to see, even if you want to design a ecommerce website or web edit or set a special plugin functionality, please contact us now (Information in the footer)
    Blogger Comment
    Facebook Comment

0 nhận xét:

Đăng nhận xét