Canadian Stocks Pull Back Off Best Levels But Close Modestly Higher

(RTTNews) - Canadian stocks finished Wednesday's trading day modestly higher, adding to the substantial gains posted during the previous session.

The benchmark S&P/TSX Composite Index gave back ground after an early advance but still closed up 34.16 points or 0.2 percent at 20,057.89, its best closing level in almost two months.

The uptick on Bay Street came as the latest U.S. inflation data added to optimism about the outlook for interest rates.

Before the start of trading, the Labor Department released a report showing an unexpected decrease in U.S. producer prices in the month of October.

The Labor Department said its producer price index fell by 0.5 percent in October after rising by a revised 0.4 percent in September.

Producer prices were expected to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 1.3 percent in October from 2.2 percent in September. Economists had expected the pace of price growth to slow to 1.9 percent.

Following yesterday's tamer than expected consumer price inflation data, the latest report reinforced expectations that the Federal Reserve is done raising interest rates.

Technology stocks saw significant strength on the day, with the S&P/TSX Capped Information Technology Index jumping by 2.1 percent.

Considerable strength was also visible among healthcare stocks, as reflected by the 1.7 percent gain posted by the S&P/TSX Capped Health Care Index.

On the other hand, consumer staple stocks moved sharply lower, dragging the S&P/TSX Capped Consumer Staples Index down by 2.6 percent.

Energy stocks also moved notably lower along with the price of crude oil, resulting in a 1.2 percent decline by the S&P/TSX Capped Energy Index.