The Toronto Stock Exchange Broadcast Centre in Toronto.MARK BLINCH
Stocks surged on Monday, shaking off last week's declines as investors welcomed efforts by Europe to boost its bailout fund and applauded Federal Reserve chairman Ben Bernanke's caution on the state of U.S. employment.
The Dow Jones industrial average closed at 13,241.63, up 160.90 points or 1.2 per cent – marking its biggest move in nearly two weeks. The broader S&P 500 closed at 1416.51, up 19.40 points or 1.4 per cent. In Canada, the S&P/TSX composite index closed at 12,574.79, up 109.13 points or 0.9 per cent.
Stocks showed early, though modest, gains after Germany said it would support boosting the euro zone's firewall, raising optimism that the region will be able to tackle the next flare-up of the sovereign-debt crisis.
However, the buying really got going after Mr. Bernanke said that while he's encouraged by the drop in the U.S. unemployment rate, more improvement in the country's employment situation will require the help of Fed monetary policy. His comments amounted to a fairly clear endorsement of ongoing ultra-low interest rates, even as some observers had been suggesting recently that economic improvements could push the Fed to raising rates sooner than expected. In recent monetary policy statements, the Fed has said that it would maintain rates at exceptionally low levels through at least the end of 2014.
The stock market's gains were broad, lifting all 10 subindexes within the S&P 500. Among some of the moves, American Express Co. rose 2.5 per cent, JPMorgan Chase & Co. rose 2.2 per cent and Microsoft Corp. rose 1.8 per cent.
In Canada, SNC-Lavalin Group Inc. rebounded from an earlier dip after its chief executive resigned over allegations that he had allowed unauthorized payments, ending the day 5.2 per cent higher. The company's quarterly earnings, released at the same time, were in line with expectations.
Among commodities, gold rose $23.20 (U.S.) an ounce, to $1,685.60. Crude oil rose to $107.03 a barrel, up 16 cents. Among Canadian commodity producers, Suncor Energy Inc. rose 1 per cent, Canadian Oil Sands Ltd. was unchanged and Barrick Gold Corp. rose 0.6 per cent.