News Column

Small gains for TSX

June 18, 2014



Enbridge pipeline controversy continues







The Toronto stock market was slightly higher midday Wednesday, with investors waiting for an update on the U.S. economy during the afternoon from the Federal Reserve after its two-day policy meeting.

The S&P/TSX composite index stayed positive 18.45 points to greet noon at 15,074.34.

The Canadian dollar was down 0.05 cents at 92.02 cents U.S. as the price of oil pushed toward $107 U.S. a barrel and violence persisted in energy producer Iraq, where Islamic militants attacked the country's largest refinery.

In Canada, Enbridge Inc.'s controversial Northern Gateway proposal passed a key milestone on Tuesday, but the Calgary-based pipeline giant says it has a long-way to go before it decides to break ground. Ottawa gave the green light to the multi-billion-dollar Alberta-to-West Coast project, subject to 209 conditions recommended by a regulatory panel late last year.

But Enbridge still needs to cross a number of federal and provincial regulatory hurdles, fight a bevy of legal battles launched by opponents and win over communities along the proposed route.

Opponents of the pipeline, including B.C. aboriginal groups, are vowing that it will never be built, despite the go-ahead from the federal government.

A Canadian company that supplies crews of skilled workers says the federal government's approval of the Northern Gateway pipeline will create as many as 3,000 new construction jobs.

CEO Hunter Reid of TDT Crews Inc. says the building of the pipeline would create a huge demand for skilled trades from provinces, especially Ontario's large, skilled construction workforce. Reid also says labour mobility will be critical and is urging that Canadians be hired first for the project.

Gold stocks ruled the roost on the TSX, with Allied Nevada shining 19 cents, or 5.1%, brighter to $3.92, while Barrick Gold shares climbed 19 cents, or 1%, to $18.73.

On the economic front, Statistics Canada told us that wholesale trade rose 1.2% to $51.2 billion in April following a decline in March. Higher sales were recorded in all sub-sectors except for food, beverage and tobacco.

ON BAYSTREET

The TSX Venture Exchange gained 0.95 points to 1,007.03

All but four of the 14 Toronto subgroups were pointed upward, most notably gold, gaining 1.5%, while materials took on 1.2% and information technology gathered 0.8%.

The four laggards were weighed mostly by consumer staples and health-care issues, each off 0.3%, while industrials were 0.2% to the bad.

ON WALLSTREET

Stocks are down modestly in early afternoon trading, with the impending announcement by the U.S. Federal Reserve on everyone's radar screens.

The Dow Jones Industrials shed 36.21 points to 16,772.28

The S&P 500 faltered 1.04 points to 1,940.95, and the NASDAQ composite slipped 5.87 points to 4,331.36

BlackBerry popped after the struggling smartphone maker announced that the Amazon Appstore will be available on its new operating system that's launching in the fall. The move significantly expands the number of apps available to Blackberry users.

BlackBerry is in the midst of trying to execute a turnaround, and lately, investors have seemed please. The stock is up 15% in the past month, though it is still down almost 45% for the past year.

Still with Amazon, the tech giant will be in the spotlight today when its CEO Jeff Bezos unveils a still-unknown product that is widely suspected to be a high-end smartphone. The stock moved higher in morning trading ahead of the announcement, which will take place near the company's Seattle headquarters.

Adobe spiked around 8% after reporting better-than-expected quarterly results Tuesday evening. The company, which is behind the popular Photoshop software, said revenue in the period was driven by the acceleration of its cloud business.

FedEx has finally stopped blaming the weather. The company released strong earnings Wednesday and shares got a nice lift over 4.5%. That was compared to last quarter, when FedEx claimed that its operating income would have been $125 million higher if not for the unusually harsh winter weather earlier this year.

ConAgra Foods shares sunk after the company cut its profit outlook for the three months ending in May, citing challenges from some of its retail brands, including Chef Boyardee.

The key question today for investors is whether the Fed is likely to raise interest rates by the end of the year or wait until 2015.

It is widely expected that the Fed will reduce its asset purchase program by another $10 billion U.S. and hold its key federal funds rate unchanged (at near zero rates). The real action will come when Janet Yellen speaks at a press conference afterward.

Prices for 10-year U.S. Treasuries improved, lowering yields to 2.63% from Tuesday's 2.66%. Treasury prices and yields move in opposite directions

Oil prices slipped 38 cents to $105.98 U.S. a barrel.

Gold prices faded 40 cents at $1,271.60 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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