News Column

Resources drag TSX under

May 27, 2014



Pilgrim's-Hillshire deal in focus







Equities in Toronto declined on Tuesday as a drop in prices for gold, oil and other commodities was a drag on shares of natural resource producers.

The S&P/TSX composite index dropped 57.67 points to finish Tuesday at 14,658.02

The Canadian dollar reversed 0.02 cents to 92.07 cents U.S.

Bank of Nova Scotia shares rose after it released strong quarterly results but the increase was not enough to halt the index's retreat.


Scotiabank's second-quarter profit rose 14%, beating analysts' estimates, as higher income at its domestic banking and global wealth units offset a flat performance in international retail banking. Scotiabank shares rose 1.1% to $68.77.

Among gold producers, Barrick Gold tumbled 4% to $17.30, and Goldcorp also slipped 4% to $25.57.


Shares of energy producers reflected weakness in oil prices. Canadian Natural Resources Ltd lost 1.3% to $43.94, and Suncor Energy declined 1% to $41.88.

In corporate news, Allergan Inc said Valeant Pharmaceuticals International's $47-billion offer overstated the possible savings from the deal in terms of both research and development and in tax structure. Valeant shares gave back 1.9 % to $141.04.

ON BAYSTREET

The TSX Venture Exchange shed 9.17 points to 985.73.

Nine of the 14 Toronto subgroups were lower at the end of the session, as gold plummeted 3.9%, materials fell 2.3% and energy gave back 0.8%.

The five gainers were led by information technology, up 0.5%, financials, inching up 0.4%, and consumer discretionaries, improving but 0.3%.

ON WALLSTREET

Stocks climbed to all-time highs on Tuesday as Wall Street cheered positive economic reports in the U.S. and a wave of buying in Europe.

The Dow Jones Industrial Average grew 69.23 points to close at 16,675.50.

The S&P 500 gained 11.38 points to 1,911.91, and the NASDAQ composite index improved 51.26 points to 4,237.07

The optimistic sentiment carried the S&P 500 further into record territory and above the psychologically-important 1,900 level. This marks the 12th record close of the year for the broad average, which ended at an all-time high of 1,900.5 on Friday.

The Dow is within striking distance of its record closing high of 16,715.4 that was set earlier this month, although it doesn't look likely to cross that without a strong rally before the closing bell.

Shares of Hillshire Brands popped nearly 22% after Pilgrim's Pride offered to acquire the food maker for about $6.4 billion U.S. That offer complicates Hillshire's $4.3-billion U.S. proposed buyout of Pinnacle Foods.

Investors gobbled up shares of other companies in the sector, including Tyson Foods, which rallied 5% on the deal news and a positive mention in Barron's over the weekend.

Bank of America bounced as much as 4% after resubmitting a capital plan to the Federal Reserve. The bank admitted a calculation mistake that made its prior plan unusable. BofA said the new request is smaller than the previous one.

Investors bought more into tech stocks, pouring more cash into the NASDAQ than the broader markets. Some of the day's big winners include Priceline, Expedia, Facebook, and Apple

Shares of InterContinental Hotels rose more than 3% after Sky News reported the hotel chain rejected a secret 6-billion ($10-billion U.S.) bid by a U.S. suitor.

The company declined to comment on the report.

AstraZeneca retreated more than 1.7% as investors reacted to Pfizer's confirmation that it would no longer pursue a mega-takeover of the British drug maker.

Economically speaking, Washington said U.S. orders for big ticket items like appliances grew 0.8% in April, slowing down from March's healthy pace but beating expectations for a narrow decline in durable goods orders.

U.S. home prices in 20 cities rose 0.9% in March from February, according to S&P/Case Shiller. That trumped forecasts for a more modest increase.

Moreover, consumers are starting to feel a little more optimistic about the economy. The Conference Board's index on consumer confidence increased to 83 in May, up from 81.7 in April.

Prices for 10-year U.S. Treasuries were higher, lowering yields to 2.52% from Friday's 2.53%. Treasury prices and yields move in opposite directions

Oil prices fell 22 cents to $104.13 U.S. a barrel.

Gold prices slumped $24.10 to $1,267.60 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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