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Canada’s main stock index rose and U.S. markets pared back early gains on Wednesday as investors reacted to a late-afternoon surge in bond yields, while the loonie dipped below US79¢.

Bond prices fell, sending the yield on the U.S. 10-year Treasury note to its highest level in four years — to 2.94% from 2.89% late Tuesday — following newly released minutes Wednesday afternoon from the U.S. Federal suggesting bullish sentiment among policy-makers.

The minutes from last month’s Fed meeting showed that a majority of officials believed that improving global economic prospects and the effects of recently passed U.S. tax cuts had raised the prospect for solid economic growth — and for continued interest rate increases in 2018. The Fed did not raise rates at the January meeting, which occurred before the February stock market plunge and turbulence.

Bank stocks rose along with bond yields on Wednesday, as the S&P/TSX composite index advanced 84.57 points to 15,524.01 — led by the financials, industrials and materials sector.

“Financials generally do OK when rates go up, so they got a little bit of reinforcement there,” said Michael Currie, vice president of TD Wealth Private Investment Advice.

“Materials and industrials, they also tend do better during the signs of a strong economy. They’re much more economically sensitive and less interest rate sensitive.”

The higher bond yields, which indicate investors expect more risk of inflation, weighed heavily on U.S. technology stocks that led early gains Wednesday on Wall Street indices.

In New York, the Dow Jones industrial average fell 166.97 points to 24,797.78. The S&P 500 index was down 14.93 points to 2,701.33 and the Nasdaq composite index gave back 16.08 points to 7,218.23.

In currency markets, the Canadian dollar closed at an average trading value of 78.92¢ US, down 0.31 of a U.S. cent.

On the commodities front, the April crude contract fell US11¢ to US$61.68 per barrel and the April natural gas contract was up US3¢ at US$2.68 per mmBTU.

The April gold contract advanced US90¢ to US$1,332.10 an ounce and the March copper contract was up US3¢ to US$3.22 a pound.

With files from The Associated Press