A TSX tote board is pictured in Toronto, on Dec. 31, 2012.Frank Gunn/The Canadian Press
North American stocks climbed Thursday, after equities had their biggest two-day selloff in six weeks, as financial companies rose and an unexpected drop in retail sales bolstered the case for keeping interest rates low.
The Dow Jones industrial average rose 191.8 points to 17,827.21. The S&P 500 added 18.33 points to 2,058.57, after losing 1.9 per cent in the previous two sessions. The Nasdaq composite was up 28.20 points to 4,878.14.
In Toronto, the S&P/TSX composite index gained 26.97 points to 14,766.17, as higher copper prices helped support shares of some mining companies, helping offset a decline in the energy sector.
The Canadian dollar was at 79.10 cents (U.S.) early Thursday, up 0.74 of a U.S. cent.
The loonie hit a six-year low of 78.14 cents (U.S.) on Wednesday but closed slightly higher at 78.36 cents (U.S.)
In New York, Morgan Stanley, American Express Co. and Citigroup Inc. added more than 1.3 per cent as they announced dividend payments and details on share buybacks after approval from the U.S. Federal Reserve following stress tests. Intel Corp. fell 4.2 per cent after cutting its first-quarter revenue outlook.
"I think this is a question of the bad news is good news, which is a reversal of what we had Friday when we got killed," Donald Selkin, the chief market strategist at New York-based National Securities, which oversees $3-billion, said in a phone interview. "The only reason it's good is in policy because it throws a wet blanket over the surety of them raising rates."
Concern the U.S. Federal Reserve may start raising interest rates amid a pickup in the economic recovery has weighed on equities this year. Policy makers next meet on March 17-18.
Sales at U.S. retailers unexpectedly decreased in February for a third consecutive month as inclement weather and low wage gains restrained shoppers.
The 0.6 per cent drop followed a 0.8 per cent decrease in January, Commerce Department figures showed Thursday in Washington. The median forecast of 86 economists surveyed by Bloomberg called for a 0.3 per cent gain.
The dollar weakened versus the euro for the first time in three days as investors questioned whether gains of more than 2 per cent this week will prompt the Fed to soften its stance on the timing of an interest-rate increase.
"The weakness in the market has been based on that strong dollar," Selkin said. "The dollar's a little weaker today so maybe that'll help."
The greenback's rise to a 12-year high versus the euro has helped drag American stocks down more than 3 per cent since a record on March 2, erasing gains for the year on concern earnings growth will be lower than investors project.
A preliminary report on Friday will show consumer sentiment held steady this month, economists forecast. Consumer spending accounts for about 70 per cent of the U.S. economy.
With files from The Canadian Press, Reuters