News Column

Optimism fuels TSX surge

May 12, 2014



Metals prove mighty







Rising miners helped give the Toronto stock market a solid gain as copper prices jumped in response to moves to open up Chinese markets.

The S&P/TSX composite index ballooned 120.88 points to close at 14,654.94

The Canadian dollar poked ahead 0.04 cents to 91.78 cents U.S.

Base metal miners advanced after China's cabinet promised late last week to allow local governments to issue bonds and streamline the approval process for initial public stock offerings, a move that was seen as widening market access.

Teck Resources climbed $1.00, or 4.1%, to $25.38, while July copper gained seven cents to $3.15 U.S. a pound.

On the merger-and-acquisition front, Botox-maker Allergan rejected the $48-billion U.S. hostile takeover bid by Quebec-based Valeant Pharmaceuticals International Inc.

It says the bid undervalues Allergan, isn't in the best interests of the U.S. company and creates risks and uncertainties for its shareholders. The California-based company also says the offer doesn't reflect its future earnings and growth. Valeant shares dropped $1.20 to $141.76.

The gold sector gained as Barrick Gold added 11 cents to $18.90, while Goldcorp dipped a cent to $27.08

The energy sector climbed while Imperial Oil added 47 cents to $53.15, and Suncor took on 66 cents to $42.80.

ON BAYSTREET

The TSX Venture Exchange faded 2.84 points to 988.26

All 14 Toronto subgroups were in the green Monday, with metals and mining spiking 3.9%, global base metals stronger by 3.4%, and materials gaining 1.4%.

ON WALLSTREET

Blue-chips jumped over 100 points to a record high Monday in intraday trading, and the S&P 500 was just shy of its record that was set in early April. The NASDAQ also got a nice bounce -- up over 1.5%.

The Dow Jones Industrial Average screamed ahead 112.13 points to end the day at 16,695.47

The S&P 500 gained 18.17 points to 1,896.65, and the NASDAQ composite index soared 71.99 points to 4,143.80

While investors have continued pouring into the perceived safety of blue-chip companies, tech stocks have been hammered as investors fret about sky-high valuations and in some cases not yet proven business models.

There was also a bit of that merger Monday feeling in the air, after Hillshire Brands announced plans to acquire rival Pinnacle Foods for $6.6 billion U.S. Shares of Pinnacle surged 13% on the news, while shares of Hillshire dropped 5%.

Investors are also on the lookout for another mega health care deal, of which there have been aplenty so far this year.

Pfizer shares rose slightly after the company published a letter to a parliamentary committee in the United Kingdom arguing its case for its proposed $106-billion U.S. acquisition of AstraZeneca

The chief executives of both companies will be grilled by British lawmakers Tuesday and Wednesday, reflecting high levels of public anxiety over the impact of a takeover on jobs and scientific research in the U.K.

Gogo soared after the company beat earnings estimates. The in-flight Internet provider reported a narrower loss compared to a year earlier and said that its revenue climbed 35%.

Shares of J.C.Penney popped after Goldman Sachs analysts maintained their "neutral" rating on the stock, but said they expect to see continuing progress from the struggling retailer's turnaround efforts.

With Monday's gains, J.C. Penney shares are now flat for 2014. They've made an impressive 60% run in the last three months, but are still down nearly 50% over the last year.

Investors will have more insight into the company's progress, or lack thereof, on Thursday when it reports earnings.

Ralph Lauren suffered after the iconic clothing company's stock was hit with an analyst downgrade. The stock has been sliding and is down more than 17% this year as it struggles to keep up with the competition.

Twitter was crawling back Monday with more than 5.5% bump after an analyst at SunTrust upgraded the stock. Shares plunged last week after insiders were allowed to sell Twitter following the expiration of a lockup period tied to the company's initial public offering.

Prices for 10-year U.S. Treasuries stepped back, lifting yields to 2.66% from Friday's 2.62%. Treasury prices and yields move in opposite directions

Oil prices took on 67 cents to $100.66 U.S. a barrel.

Gold prices gained $8.70 to $1,298.50 U.S. an ounce.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Baystreet Stock Market Update (Canada)


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