Source : The Canadian Press

The Toronto stock market closed little changed Wednesday as the U.S. Federal Reserve delivered more economic stimulus aimed at a faltering American economy.

The S&P/TSX composite index shed 10.3 points to 12,671.12 after the Fed said it would embark on a second round of quantitative easing, which involves the U.S. central bank buying bonds.

The Fed said it would spend about US$600 billion between now and the end of the second quarter of 2011, adding up to about US$75 billion a month, which largely met expectations.

“The most important thing in some ways was that they didn’t hit the panic button, they didn’t come in with a big US$1-trillion program and rattle the market,” said Colin Cieszynski, market analyst at CMC Markets Canada.

“So they came in with what was expected, enough to prop up the recovery to keep the wheels from falling off.”

The latest round of quantitative easing, which has come to be known as QE2, is supposed to lower interest rates and encourage lending.

But the easing means printing a large quantity of American dollars, which has weakened the greenback in recent months.

The Canadian closed 0.26 of a cent higher at 99.32 cents US as the greenback lost some strength following the announcement.

The American currency had weakened considerably over the last couple of months since the central bank’s bond purchase plan involves the printing of huge amounts of American dollars.

The TSX Venture Exchange moved up 6.23 points to 1,948.64.

Financial stocks led advancers in the wake of the Fed announcement, with CIBC (TSX:CM) ahead 71 cents at $78.57, while Manulife Financial (TSX:MFC) climbed 28 cents to $12.90.

Gold stocks were the biggest decliner as the December bullion contract lost $19.30 to US$1,337.60 an ounce. Goldcorp Inc. (TSX:G) fell 49 cents to $44.89 and Barrick Gold Corp. (TSX:ABX) faded 47 cents to $48.68.

Base metals were also weak as copper prices on the Nymex lost five cents to US$3.79 a pound.

Losses were led by Taseko Mines (TSX:TKO), down 24.58% at $4.94 after the federal government decided to block the development of the company’s controversial Prosperity copper-gold project in British Columbia because of a “scathing” federal environmental assessment.

The energy sector was slightly higher as oil prices rose for a third day, up 79 cents to US$84.69 a barrel. Prices have been lifted this week by better than expected Chinese and U.S. manufacturing data, which raised hopes for higher demand. Talisman Energy (TSX:TLM) gained 20 cents to $19.31.

Commodity prices have also been supported by a weaker U.S. dollar and anticipation of the Fed stimulus program. Since commodities like oil and gold are priced in U.S. dollars, a weaker greenback makes them more attractive to buyers who use other currencies.

New York markets finished higher with the Dow Jones industrial average ahead 26.41 points at 11,215.13.

The Nasdaq composite index rose 6.75 points to 2,540.27 while the S&P 500 index climbed 4.39 points to 1,197.96.

Investors also took in some good news on the employment front, two days before the release of the U.S. non-farm payrolls report. Payroll company ADP said private employers added 43,000 jobs last month after cutting jobs in September.

Also, the Institute for Supply Management said growth in the service sector accelerated last month when economists were expecting a slowdown in the pace of expansion.

The ISM report is closely watched because the service sector accounts for about 80% of U.S. jobs. Earlier this week, ISM said growth in the manufacturing activity also accelerated last month.

In earnings news, Canadian pipeline operator Enbridge Inc. (TSX:ENB) said its third-quarter net income weakened to $157 million from $304 million a year ago as it dealt with two pipeline leaks in the U.S. Midwest and a cleanup associated with the spills. Earnings came in at 42 cents a share, five cents less than expected and its shares were up 11 cents at $56.15.

Agrium Inc. (TSX:AGU), a major fertilizer, chemicals and farm inputs retailer, reported its net profits more than doubled to US$57 million in the latest quarter. Revenues for the quarter rose to more than US$2 billion from $1.8 billion. Agrium shares dipped $2.41 to $85.59.

Meanwhile, shares in rival Potash Corp. of Saskatchewan (TSX:POT) moved six cents lower to $146.21 ahead of an expected announcement later Wednesday from Industry Minister Tony Clement on whether BHP Billiton can proceed with its hostile, US$38.6-billion bid for the fertilizer giant. In order to do so, BHP had to prove the takeover would be a net benefit to the country or not.

WestJet Airlines Ltd. (TSX:WJA) says it will begin paying a quarterly dividend to shareholders for the first time. The quarterly dividend to shareholders will initially be five cents per share, to be paid on Jan 21. The announcement came as WestJet’s third-quarter profit jumped 72%, rising to $54 million and its shares jumped 58 cents to $13.37.