Investors worry rally’s spring run near its end
The Toronto stock market finished higher last week as the spring rallypowered ahead for an 11th week, taking the main index up 32 per centfrom the lows of early March.
The Toronto stock market finished higher last week as the spring rally powered ahead for an 11th week, taking the main index up 32 per cent from the lows of early March.
But some analysts are concerned the rally could be set to stumble and indexes could test the lows hit on March 9.
Confidence that economic conditions have turned a corner were shaken last week. The U.S. Federal Reserve changed its outlook for 2009, projecting the U.S. economy will shrink this year by between 1.3 and two per cent. The previous forecast was for a decline of 0.5 to 1.3 per cent.
The following day, credit ratings agency Standard & Poor’s said Britain may have its rating cut because of rising debt levels.
Investors worry outlook cuts are possible in other countries like the U.S., which are borrowing heavily to finance massive stimulus plans. “Already we’re talking about a $3-trillion US combined deficit for two years,” said Andrew Pyle, investment adviser at ScotiaMcLeod.