U.S. stock markets, which had been marching upwards for a week, closed at all-time highs Thursday after Federal Reserve chairman Ben Bernanke said the central bank will keep supporting the economy.
The Dow Jones Industrial Average and Standard & Poor's 500 each closed at record highs when the bell rang to close trading at 4 p.m. in New York.
The Dow closed at 15,461 and the S&P 500 finished at 1,675.
The S&P/TSX composite index, Canada's benchmark stock index, also finished higher, up 186 points to finish at 12,493. But the TSX is still about 3,000 points away from its pre-recession peak.
Fuelling all the gains, Bernanke made a speech late Wednesday after U.S. markets had closed, saying the economy still needs "a highly accommodative monetary policy for the foreseeable future."
U.S. unemployment too high to raise rates
He said the U.S. economy needs help because unemployment is high. The remarks seemed to ease investors' fears that the central bank will pull back on its economic stimulus too quickly.
Stock index futures rose overnight and the market surged at the open Thursday.
"It's back to the old accommodative Fed, so the markets are happy again," said Randy Frederick, Managing Director of Active Trading and Derivatives at the Schwab Center for Financial Research.
U.S. stocks posted their sixth straight day of gains, the longest streak in four months.
The Nasdaq composite rose 52 points, or 1.2 percent, to 3,572. The Nasdaq is at its highest since October 2000. It remains well below the all-time high of 5,048 it reached March 10, 2000.
Waiting on earnings
"The Bernanke qualifications have taken the interest rate risk off the table and now it's really about what will earnings say," said Jonathan Lewis, chief investment officer at Samson Capital Advisors.
In government bond trading, the yield on the 10-year note fell to 2.58 per cent from 2.63 per cent Wednesday. The yield has dropped this week. It surged as high as 2.74 per cent Friday after the government reported strong hiring in June. Many traders took that report as a signal that the Fed would be more likely to slow its bond purchases sooner rather than later.
The Fed is currently buying $85 billion a month in bonds to keep interest rates low and to encourage spending and hiring.
Gold also rose. The price of bullion rose for a fourth straight day, climbing $32.50, or 2.6 per cent, to $1,279.90 an ounce. Gold has rebounded this week after falling close to a three-year low. That helped mining stocks. In other commodity trading, oil fell back from a 16-month high, dropping $1.61, or 1.5 percent, to $104.91 a barrel.
In Toronto, all of the 13 subgroups closed higher, but gold led the charge, hitting 171.64 points, up 10.55 points or 6.55 per cent as cash return to bullion-related stocks. Among the strongest were Goldcorp. Inc., up $1.85, or 7.3 per cent, at $27.20 and exploration company PMI Gold Corp., up two cents, or 7.02 per cent, at 30.5 cents.
Gold itself was quoted at $1,331 Cdn spot price and $1,334 asked at the close of trading Thursday at Travelex Canada Ltd., a major gold and foreign exchange dealer.
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