News Column

TSX lower by noon

May 8, 2014

Scotiabank-Canadian Tire deal in focus

The Toronto stock market was lower Thursday amid major deal making in the financial sector, a slew of earnings news and positive trade numbers from China.

The S&P/TSX composite index dipped 14.87 points to greet noon at 14,641.53.

The Canadian dollar hiked 0.54 cents at 92.29 cents U.S.

Scotiabank has signed a deal to buy a 20% stake in Canadian Tire's financial services business for $500 million in cash as part of a strategic partnership between the companies. Scotiabank shares rose 30 cents to $66.86 while Canadian Tire shed early gains to move down 53 cents to $107.32.

At the same time, Canadian Tire posted net income attributable to shareholders of $70.6 million, or 88 cents per share, down from $73 million, or 90 cents a share a year ago, which was five cents below analysts' forecasts. Revenue met expectations, rising 3.8% to $2.57 billion.

Valeant Pharmaceuticals International posted a first-quarter net loss of $23 million or seven cents a share, compared with a loss of $27.5 million, or nine cents per share, in the same quarter of 2013.

On a cash earnings per share basis, adjusted income was $600 million or $1.76 per diluted share, an increase of 35% over the prior year and four cents ahead of estimates. Revenues jumped 77% to $1.9 billion, up from $1.06 billion year-over-year and its shares gained 29 cents to $145.35.

Telus Corp. was ahead 29 cents to $39.74 as the telecom reported a first-quarter net profit up 4.1% from a year ago to $377 million, or 61 cents per share, which met expectations.

Revenue was up 5% to $2.9 billion and exceeded expectations of $2.87 billion. Telus is also raising its dividend to 38 cents per share, an 11.8% increase year-over-year.

Auto parts giant Magna International reported quarterly net income attributable to the company was $393 million and diluted earnings per share were $1.76, far below the $2.05 that analysts had expected. Sales were up 7% to $8.96 billion and its shares dropped 41 cents to $106.94.

Investors were also encouraged Thursday by China's April trade data that showed an improvement in exports. Exports rose 0.9% from the previous year, compared with a 6.6% decline in March. Imports also grew after a contraction in March but at a subdued level.

On the economic beat, Statistics Canada reported this morning that its New Housing Price Index rose 0.2% in March, following an identical increase in February.

Elsewhere, Canada Mortgage and Housing Corporation reported that there were 17,124 housing starts in April, making for a seasonally-adjusted annual rate of 194,809 units in April, an increase from 156,592 in March.


The TSX Venture Exchange dropped 1.76 points to 999.28

Eight of the 14 Toronto subgroups were still positive, led by metals and mining, up 1.8%, industrials, up 0.6%, and telecoms, up 0.4%.

The half-dozen laggards were weighed mostly by energy, off 1.3%, health-care, down 0.9%, and gold, off 0.2%.


The leading lady of the U.S. economy, Janet Yellen, is on the global stage again today. So far, investors like what they hear.

The Dow Jones Industrial Average raced ahead 103.84 points to 16,622.38

The S&P 500 took on 9.97 points to 1,888.18, and the NASDAQ composite index added 37.12 points to 4,104.79

Shares of Tesla tanked 4%, but that was a rebound from the 10% drop the stock experienced shortly after the opening bell. The company's earnings beat expectations Wednesday, but Tesla forecast that expenses will continue to rise as it expands into China, develops its next vehicle and breaks ground on a new factory.

SolarCity surged 15% after the solar panel company beat earnings estimates and subsequently received a series of analyst upgrades.

The Keurig Green Mountain coffee machine is on overdrive this morning. Shares spiked 13% after the company posted double-digit sales and earnings growth for the first quarter.

The company also announced the expansion of its partnership with theJ.M. Smucker Company. The deal makes Smucker's coffee brands such as Folgers available in Keurig products and brewing systems.

Dish Network declined after the satellite provider reported lower profit for the quarter and said it added television subscribers at a slower pace than the same period last year.

Barclays got a boost in London trading after the bank said it would cut 19,000 jobs over the next three years.

Stocks got a late boost Wednesday from Federal Reserve chairwoman Janet Yellen, when she made remarks to a congressional panel signaling her central bank's continued support for the economy, although she again refused to give clues about when the Fed might raise interest rates.

Today, Yellen appears before the Senate Budget Committee.

Prices for 10-year U.S. Treasuries regained ground, dropping yields back to Wednesday's 2.59%. Treasury prices and yields move in opposite directions

Oil prices demurred 53 cents to $100.24 U.S. a barrel.

Gold prices dipped 10 cents to $1,288.80 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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