Investors pause as North American stock markets finish little changed

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TORONTO—North American stock markets were little changed for the most part Thursday as investors seemed to take a breather amid a positive run earlier in the week.

Toronto’s S&P/TSX composite index fell 9.62 points to 13,494.36, weighed down by pressure from the materials and mining sectors.

On U.S. markets, the Dow Jones industrial average lost 31.57 points to 17,685.09, while the broader S&P 500 composite index faded 4.21 points to 2,059.74 and the Nasdaq composite was flat, up 0.56 of a point at 4,869.85.

Investors were buoyed this week by the latest comments from U.S. Federal Reserve chairwoman Janet Yellen, who said the Fed will proceed with caution on any rate hikes due to global economic concerns. Low interest rates have helped fuel strength on equity markets since the so-called Great Recession.

Stephen Carlin, head of equities at CIBC Asset Management, said the Toronto stock market seems to be taking a pause after a strong performing March to re-evaluate its outlook for the reminder of the year.

The positive sentiment has been generally attributed to recovering oil and gold prices and better than expected quarterly results from Canadian companies.

“We’ve had a number of good strong companies perform quite well, supported by strong earnings growth,” he said. “That’s the critical data point. What kind of earnings do we have for the remaining of the year?”

Carlin said CIBC expects the TSX to finish the year positive, as it forecasts a continual rise for commodity prices.

“We’re going to have a few pullbacks as we have, perhaps, not as robust growth statistics come out of each region, or we see some uncertainties with respect to growth initiative with central bank policies,” he said.

“I don’t see a straight line up from here. I see us trading in a sideways market but I do see a positive outcome for the year.”

In commodities, the May crude oil contract rose two cents to US$38.34 a barrel and May natural gas slipped four cents to US$1.96 per mmBTU. The June gold contract gained $7 to US$1,235.60 an ounce, while May copper was down a penny at US$2.18 a pound.

Meanwhile, the Canadian dollar dipped a day after hitting its highest level of the year.

The loonie closed 0.13 of a U.S. cent lower at 77 cents US despite a report by Statistics Canada that the Canadian economy grew more than expected in January.

The agency reported that real gross domestic product rose 0.6 per cent in the first month of the year, boosted by manufacturing, retail trade and the oil and gas sector. That was twice the gain economists had expected, according to estimates compiled by Thomson Reuters, and triple the 0.2 per cent increase in December.