Hopes for European Central Bank action on borrowing costs push markets higher

By Malcolm Morrison

THE CANADIAN PRESS

TORONTO — The Toronto stock market was positive on hopes that the European Central Bank will ease the debt crisis by taking steps to reduce the borrowing costs of deeply indebted countries such as Spain and, to a lesser extent, Italy.

The S&P/TSX composite index gained 72.6 points to 12,148.63. The Canadian dollar gained 31-100ths to 101.48 cents US.

U.S. markets also advanced on hopes that the ECB will buy government bonds as a way to reduce borrowing costs.

Bond yields had spiked earlier this year to unsustainable levels in countries dealing with high debt levels amid much weaker economic conditions.

The Dow Jones industrials gained 12.36 points to 13,284, the Nasdaq composite index was up 11.09 points to 3,087.3 and the S&P 500 index rose 3.57 points to 1,421.7.

Oil gained $1.35 to US$97.32 a barrel.

09:36ET 21-08-12