National Newswatch

TORONTO — Canada's main stock index posted its second straight day of gains, as North American markets bounced back after a negative start to Thursday's trading session.

The Toronto Stock Exchange's S&P/TSX composite index advanced 79.39 points to 15,407.66, with the real estate and utilities sectors leading a largely broad-based advance.

In New York, the Dow Jones industrial average advanced 306.88 points to 25,200.37. The S&P 500 index was up 32.57 points to 2,731.20 and the Nasdaq composite index added 112.81 points to 7,256.43.

"When you look at the last couple of trading sessions, ... we've seen a sobering of panic by investors in the market," said Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel Inc. in Toronto.

The VIX index — Wall Street's so-called "fear gauge" because it measures how much volatility investors expect in the future — was trading under 20 late Thursday, relative to it being at 10 throughout 2017, but considerably less than it was earlier last week when it skyrocketed to 50.

The VIX's temporary spike, quadruple where it was a few weeks ago, emerged amid a rout in global equity markets last week that was triggered by U.S. jobs data showing wages grew more than anticipated — raising worries that signs of higher inflation might push the U.S. Federal Reserve to increase interest rates more quickly.

"We're seeing the VIX contract and get back to a direction where investors feel safer and more optimistic," said Pashootan, despite the fact more American data released Thursday signal inflation is increasing.

U.S. wholesale prices rose 0.4 per cent in January, the biggest increase since November. Investors also had little reaction to a report Wednesday that showed consumer prices rose in January.

In currency markets, the Canadian dollar closed at an average trading value of 79.96 cents US, up 0.35 of a U.S. cent.

A recent rally in crude partly explains the loonie's strengthening position. When oil prices rise, the loonie typically follows suit, especially against the greenback as oil prices are denominated in U.S. dollars.

The April crude contract was up 66 cents to US$61.17 per barrel.

Elsewhere in commodities, the March natural gas contract gave back a cent at US$2.58 per mmBTU. The April gold contract was down US$2.70 to US$1,355.30 an ounce and the March copper contract was up one cent to US$3.25 a pound.


David Hodges, The Canadian Press

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