Stock markets close in mixed territory; gold climbs higher for second day

TORONTO – There were signs that investors were looking for some direction Wednesday as North American stock markets closed with mixed results and barely changed commodity prices.

Equity markets started the day deep in negative territory but recouped most of those losses by mid-day. At the close, the S&P/TSX index faded 23.17 points at 12,740.27, dragged down by metals and financials sectors.

The Toronto exchange was hurt by disappointing results from Royal Bank (TSX:RY), which reported that its net income for its last quarter was flat at $2.45 billion as it was affected by declining oil prices.

Allison Mendes, a senior portfolio manager, said that Royal’s results weren’t surprising because no bank is immune to eroding crude values, adding that the upside is that the banks will likely emerge barely scathed.

“Without a doubt, these Canadian banks are going to weather the storm but it’s still rough trading in the interim,” said Mendes, who works at Manulife Asset Management.

The Canadian dollar was up 0.43 of a cent to 73.06 cents US.

There seemed to be more positive sentiment in New York, with the major indexes there rebounding from earlier lows. The Dow Jones industrial average added 53.21 points to 16,484.99. The Nasdaq composite index gained 39.03 points to 4,542.61, while the broader S&P 500 composite index gained 8.53 points to 1,929.80.

Despite ending the day higher, Mendes said falling oil prices and concerns over slowing growth in China are still weighing on the minds of investors.

“Investors are still skittish and that’s really nothing new,” she said. “It’s the same old story.”

On Wednesday, the International Monetary Fund warned that the global economy is still “highly vulnerable” to adverse shocks and urged the United States and other major governments to prepare contingency plans that could be rolled out quickly to boost growth.

The IMF report said a fragile global recovery has weakened further in the face of increasing financial market turbulence, falling oil prices and diminished growth prospects in China and other emerging market countries.

The lending agency said that the world’s 20 largest economies should keep pursuing growth strategies they have already unveiled. But it adds that G20 nations should develop additional measures that could be implemented quickly if growth keeps wilting.

The IMF report will be delivered at a meeting Friday and Saturday of G20 finance officials in Shanghai.

Meanwhile, commodity markets were barely changed as the April crude contract gained 28 cents at US$32.15 per barrel. The April contract for natural gas was unchanged at US$1.83 per mmBtu, while March copper also showed little change at US$2.10 a pound.

Gold was the only outlier, with April bullion jumping for the second straight day, up $16.50 to US$1,239.10 an ounce.

— With a file from The Associated Press

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