TORONTO – The Toronto stock market has fallen slightly following a substantial but short-lived relief rally Tuesday after the U.S. Federal Reserve promised to leave interest rates ultra-low until mid-2013.
The S&P/TSX composite index fell 8.3 points to 12,100.96.
The main index had soared 438 points as investors snapped up stocks that were beaten down during a market rout that carved 10 per cent from the TSX over the previous six sessions.
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But the central problems confronting markets remain: dwindling confidence in political leaders and central bankers to get a grip on the European government debt crisis and a growing conviction that the U.S. is sliding back into recession.
A downgrade of U.S. government debt by S&P last Friday served to further sour investor sentiment.
The Canadian dollar was down 0.96 of a cent to 101.2 cents US as investors believe the Fed’s stance on rates likely means the Bank of Canada is in no hurry to resume hiking interest rates.
New York markets also fell with the Dow industrials plunging 304.51 points to 10,935.26 following a 430-point jump.
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