TSX posts gains ahead of Federal Reserve meeting

The Toronto stock market gained traction on Tuesday morning as traders focus on a two-day U.S. Federal Reserve Board meeting that could lead to an attempt to boost economic confidence.The S&P/TSX composite index rose 124.14 points to 11,725.27. The TSX Venture Exchange was up 9.58 points at 1,269.33.The Canadian dollar was up 0.63 of a cent at 98.28 cents US.Some observers expect the Fed will make a move to extend its Operation Twist, under which it sold $400 billion in short-term securities and replaced them with long-term securities in an effort to put more downward pressure on long-term rates.For now, that appears to be enough to keep traders bullish, despite some mixed U.S. economic data.The U.S. Commerce Department said overall housing starts fell 4.8 per cent in May, to a seasonally adjusted annual rate of 708,000. However, the report showed that U.S. builders started work on more single-family homes, which suggested a slow recovery in the housing market.On Wall Street, the Dow Jones industrial average increased 105.84 points to 12,847.66. The Nasdaq composite index rose 32.34 points to 2,927.67 and the S&P 500 index was up 13.09 points at 1,357.87.In commodities, the July crude contract on the New York Mercantile Exchange rose 87 cents to US$84.14 a barrel.July copper was up one cent at US$3.40 a pound, while August gold was up $1.80 to US$1,628.80 an ounce.The TSX gold stocks led the declines, dropping 1.7 per cent, with Barrick Gold (TSX:ABX) off 36 cents at C$40.82.The metals and mining sector was up 2.3 per cent with Ivanhoe Mines gaining 59 cents to $10.87.Statistics Canada reported that wholesale sales rose 1.5 per cent in April to $49.3 billion, mainly due to a 48.5 per cent increase in sales of agricultural supplies. Excluding that industry, overall sales were unchanged from March.In corporate developments, fuel cell company Ballard Power Systems (TSX:BLD) cut its 2012 sales guidance and said Monday it now expects an adjusted operating loss due to delays in signing a deal in Brazil. Revenue is expected to total about $85 million for the year, down from an earlier estimate of $100 million. Ballard shares were up six cents at $1.18.FedEx says higher costs and slow global growth will crimp its earnings results over the next 12 months. The company also posted lower fourth-quarter earnings of US$550 million or $1.73 per share in the last quarter, compared with $558 million, or $1.75 per share, a year earlier. Revenue rose to $11 billion from $10.55 billion.Microsoft has unveiled Surface, a tablet computer to compete with Apple’s iPad, part of what it says will be a new family of devices.World stock markets were largely flat as relief from Greece’s election results evaporated amid worries that the financial crisis in the 17 countries that use the euro was far from over.A narrow victory by Greek conservatives, who favour upholding an austerity program that their country accepted in exchange for an international financial bailout, initially relaxed fears of a chaotic exit by Greece from the euro.But now the focus is back on Spain, whose borrowing costs surged Monday above the seven per cent level that had forced Greece, Portugal and Ireland to seek international help.The rate reflects what return investors are willing to accept when a country auctions its bonds. Spain’s high bond yields are a sign that investors are increasingly concerned about the struggle the country faces to save its crippled banks.European stocks posted limited gains. Britain’s FTSE 100 rose 1.58 per cent and Germany’s DAX added 1.21 per cent. France’s CAC-40 increased 1.61 per cent.Asian stocks were sluggish. Japan’s Nikkei 225 index fell 0.8 per cent to close at 8,655.87. Hong Kong’s Hang Seng fell slightly to 19,416.67 and Australia’s S&P/ASX 500 lost 0.3 per cent to 4,123.30.South Korea’s Kospi was 0.3 per cent down at 1,886.96. Benchmarks in mainland China and Taiwan fell. But those in India, Singapore and Indonesia rose. read more