TSX, Wall Streets close in the red as oil and loonie trade up

U.S. markets continued their decline today, while the TSX got a boost from higher oil prices.

TORONTO – The Toronto Stock Exchange finished lower Thursday after see-sawing the majority of the day as investor sentiment buoyed by higher commodity prices was finally overcome by concerns over renewed conflict in the Middle East.

The S&P/TSX composite index closed down 59.57 points at 14,869.80, adding to a triple-digit plunge on Wednesday. The Canadian dollar rose 0.30 of the U.S. cent to 80.19 cents.

U.S. markets also carried out in the red after entering a tailspin Wednesday amid reports that the Saudi-led coalition was taking military action against rebel positions in neighbouring Yemen.

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Saudi Arabia has launched air strikes to oust Yemen\’s Houthi rebels who forced the country\’s embattled president, Abed Rabbo Mansour Hadi, to flee. The Saudis accuse Iran of backing the Houthis to destabilize the location and has the support of countless regional powers, including Egypt and Jordan.

Although not a major oil producer itself, Yemen sits astride straits that join the Red Sea and the Suez Canal using the Arabian Sea, an essential energy trade route.

\”This situation, while currently happening in Yemen, has broader implications for the region and that\’s why the geo-political risk is higher than just looking at Yemen in isolation and why the reaction has probably been a little bit (strong),\” said Gareth Watson, vice-president, investment management and research, Richardson GMP Ltd.

\”This just results in further instability in the area and a continuation of this ongoing conflict between Saudi Arabia and Iran,\” Watson said, adding that while the conflict is not going to go away any time soon \”we\’ve probably seen the largest component of the initial reaction to it.\”

The May oil contract closed up $2.22 at US$51.43 a barrel, the 5th consecutive increase, and the energy sector rose 0.39%, one of only three sectors in positive territory together with information technology and health-care.

April gold advanced $7.80 to US$1,204.80 an ounce, but the sector was down 1.89%, which makes it the worst performing sector in Toronto.

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In New York, the Dow Jones Industrials fell 40.31 points to 17,678.23, while the Nasdaq lost 13.16 indicate 4,863.36. The S&P 500 dropped 4.90 points to 2,056.15.

In economic news, Bank of Canada governor Stephen Poloz defended his surprise January decision to chop the Bank of Canada\’s key rate of interest, telling an audience in London it\’s needed to counter the stunning speed and magnitude from the drop in oil prices to levels less than half those of last year.

Since then they have stabilized inside a range \”reasonably close\” to the bank\’s January predictions. \”This made us feel increasingly comfortable with the amount of insurance we\’d already taken out,\” he explained, explaining why the bank decided to contain the rate steady earlier this year. The central bank\’s next rate announcement comes April 15.

On the organization earnings front, Lululemon Athletica Inc. (Nasdaq:LULU) reported a slight increase in fourth-quarter earnings compared with a year ago amid a 16% spike in sales. Additionally, it offered an encouraging outlook for 2015 and it is shares increased $3.01 or 4.93% to US$63.97 on the Nasdaq.

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