News Column

TSX set for lower open amid lower Chinese inflation, higher commodities

May 9, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was set for a lower open Friday, adding to losses racked up during the week amid some earnings misses and drops in the energy and mining sectors.

The Canadian dollar was down 0.06 of a cent to 92.34 cents US ahead of the release later in the morning of the employment report for April.

U.S. futures were lower with the Dow Jones industrial futures down 33 points to 16,477, the Nasdaq futures lost 14.7 points to 3,522.8 while the S&P 500 futures were off 4.5 points to 1,867.75.

The TSX is heading for a negative week after three weeks of advances, after traders digested a heavy slate of earnings news and a forecast calling for lower global economic growth from the Organization for Economic Co-operation and Development. But it is still one of the best performing stock indexes, up almost seven per cent year to date.

It was a quite morning for earnings news as TMX Group Ltd. (TSX:X), the operator of the country’s largest stock posted first-quarter net income of $46.4 million, or 86 cents per share, up 23 per cent from a year ago. The owner of the Toronto and TSX Venture stock exchanges, Montreal derivatives market and other securities exchanges says revenue was up six per cent to $182.1 million.

The Second Cup Ltd. (TSX:SCU) reported a drop in its first-quarter net income to $56 million, or one cent per share, compared with $688 million, or seven cents per share, in the same quarter of 2013. Revenue for the national coffee chain was up at $7.6 million, compared with $6.2 million year-over-year.

On Thursday after the markets closed, energy producer Canadian Natural Resources (TSX:CNQ) said that quarterly net income totalled $622 million or 57 cents per share compared with $213 million or 19 cents in the prior-year period. Revenue for the three months ended March 31 rose to almost $4.4 billion from $3.76 billion in the prior-year period.

In other corporate developments, the US$35 billion deal to combine Publicis Groupe and Omnicom collapsed due to differences over how to implement a “merger of equals” in creating the world’s biggest advertising firm. The merger was intended to help the firms counter the growing clout of Internet giants such as Facebook and Google, which can bypass advertising companies altogether, as well as strengthen growth in Asia and Latin America.

The Financial Times reported that Apple is orchestrating a $3.2 billion acquisition of Beats Electronics, the headphone maker and music streaming distributor founded by hip-hop star Dr. Dre and record producer Jimmy Iovine. It said that Apple could announce a deal as early as next week.

There was some positive inflation news from China.

Consumer prices in the world’s second-largest economy rose 1.8 per cent over a year earlier, down from March’s 2.4 per cent increase, giving the government more leeway if needed to stimulate the slowing economy.

On the commodity markets, June crude in New York was ahead 45 cents to US$100.71 a barrel.

July copper was up one cent to US$3.07 a pound while June bullion gained $5.10 to US$1,292.80 an ounce.

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Source: Canadian Press DataFile

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