News Column

Monday tumble for TSX

May 5, 2014



Augusta, Hudbay in focus







Toronto equity markets took their lumps early Monday morning, with soft Chinese manufacturing data and simmering tensions in Ukraine weighing on investor sentiment.

The S&P/TSX composite index faltered 71.43 to begin the day at 14,693.72

The Canadian dollar was stronger 0.07 cents at 91.14 cents U.S.

Michigan state prosecutors plan to call a former Encana Corp executive to testify on behalf of the state, at a multi-day hearing in their criminal antitrust case against oil and gas companies Chesapeake Energy Corp and Encana Corp that begins Monday. Encana shares slipped 39 cents to $24.83.

Regulators on Friday gave Augusta Resources Corp more time to find a white knight, ruling that the miner's shareholder rights plan could stay in place until at least July 15 despite a challenge by hostile bidder Hudbay Minerals Inc. Augusta shares were flat at the open at 8.5 cents. Hudbay shares registered at $9.70, also unchanged from Friday's close.

CIBC cut the rating on SNC-Lavalin Group to sector performer from sector outperform. SNC shares dropped 50 cents to $51.64.

RBC raised the target price on Canadian Tire to $126 from $120, maintaining a rating of outperform. Canadian Tire shares took on 13 cents to $109.26.

ON BAYSTREET

The TSX Venture Exchange moved lower 2.02 points to 1,012.44

All but two of the 14 Toronto subgroups started the week in negative territory, most notably metals and mining, down 1.2%, consumer staples, down 1% and global base metals, off 0.9%.

The two lonely gainers were gold, up 0.2%, and telecoms, scraping by a mere 0.02%.

ON WALLSTREET

It's looking like an ugly start to the week on Wall Street, with all three indices decidedly lower.

The Dow Jones Industrial Average forfeited 76.96 points to begin Monday 16,435.93

The S&P 500 dipped 5.66 points to 1,875.48, and the NASDAQ composite index stumbled 7.72 points to 4,116.18.

Perhaps there is good reason for the pessimism. Target said Monday that Gregg Steinhafel, the chairman and CEO of Target during the retailer's massive breach of customer data last year, has left the company effective immediately.

Chief Financial Officer John Mulligan will serve as interim CEO. Shares of the retailer slumped Monday.

Earnings season is winding down, but a few more quarterly releases remain on the docket this week. Tyson Foods shares took a dive after the company reported first quarter earnings that fell short of analyst estimates.

Pfizer sank after the pharmaceutical giant reported slightly better than expected earnings, but it's clear the company is struggling in its traditional drug business.

That might explain why Pfizer is so keen to buy British pharmaceutical company AstraZeneca despite that company's rejection of Pfizer's most recent offer of $106 billion U.S. on Friday.

JP Morgan shares dipped Monday after the nation's largest bank by assets said Friday that it expects a 20% drop in trading revenue in the second quarter.

Like many of its rivals, the Wall Street giant has seen a sharp slowdown in its bonds, currencies, and commodities units as low interest rates and soft demand from emerging markets has put a damper on those previously lucrative businesses.

Prices for 10-year U.S. Treasuries eked lower, raising yields to 2.60% from Friday's 2.59%. Treasury prices and yields move in opposite directions.

Oil prices gave back 26 cents to $99.50 U.S. a barrel.

Gold prices strengthened $10 to $1,312.90 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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