CANADA STOCKS-TSX dips into red after Fed announcement

Wed Aug 12, 2009 3:00pm EDT
 
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TORONTO Aug 12 (Reuters) - Toronto's main stock index retreated on Wednesday afternoon, following U.S. stocks as they trimmed gains, after the U.S. Federal Reserve issued a policy statement saying it was extending purchases of long-term Treasury debt to the end of October.

At 2:44 p.m. (1844 GMT), the S&P/TSX composite index .GSPTSE was down 2 points at 10,627.47, led lower by the materials group.

The TSX fell back after the Fed said on Wednesday it will extend the duration but not the dollar amount of a program to buy long-term government securities, and said the economy was showing signs of leveling out after 20 months of recession.

The U.S. central bank also kept its benchmark short-term interest rate steady near zero and said it would likely stay there for an extended period. [ID:nN12462568]

U.S. markets also gave up some of their earlier gains after the Fed announcement. (Reporting by Jennifer Kwan; editing by Rob Wilson)