North American stocks rose at the start of trading on Tuesday as investors looked beyond a credit downgrade of Italy and focused instead on efforts by the European Central Bank to buy Italian government bonds.
The Dow Jones industrial average rose 46 points or 0.4 per cent, to 11,447. The broader S&P 500 rose 5 points or 0.4 per cent, to 1209. In Canada, the S&P/TSX composite index rose 43 points or 0.4 per cent, to 12,215.
The moves come a day after the European debt crisis took yet another turn: Standard & Poor's downgraded Italy's sovereign debt rating on Monday, raising concerns about the indebted nation's ability to meet its financial obligations, even as markets grow increasingly concerned about the rising probability that Greece will default on its obligations.
However, the ECB stepped into the fray, buying Italian bonds to keep down yields, and therefore borrowing costs. At the same time, investors are looking ahead to a meeting by the U.S. Federal Reserve, which will release its latest monetary policy statement on Wednesday. Some observers are hopeful that the Fed will announce new initiatives to stabilize the U.S. economic recovery.
The early gains on Tuesday were fairly broad, and some of the biggest moves were by economically sensitive stocks. Among U.S. financials, Bank of America Corp. rose 0.4 per cent and JPMorgan Chase & Co. rose 0.9 per cent. Walt Disney rose 0.6 per cent and Apple Inc. rose 1 per cent.
However, Netflix Inc., whose shares have been sliding sharply in recent weeks over concerns about slowing subscriber growth and a decision to separate the DVD business from the streaming business, continued to move lower, falling 4.4 per cent.
In Canada, financials were up slightly, with Royal Bank of Canada rising 0.3 per cent and Toronto-Dominion Bank rising 0.2 per cent. Energy stocks were mixed, even as the price of crude oil edged up to $86.32 (U.S.) a barrel, up 62 cents: Suncor Energy Inc. fell 0.3 per cent but Canadian Oil Sands Ltd. rose 0.2 per cent.
Gold rose to $1,792 an ounce, up about $13. Among producers, Barrick Gold Corp. rose 0.2 per cent.