News Column

TSX prospers to begin June

June 2, 2014



Metals lead parade







The Toronto stock market was positive Monday with support coming from the mining sector as copper prices advanced in the wake of a strong read on Chinese manufacturing.

The S&P/TSX composite index improved 55.80 points to greet noon at 14,659.96.

The Canadian dollar tumbled 0.45 cents to 91.78 cents U.S.

On the TSX, the base metals sector advanced as Chinese data pushed the July copper contract up four cents to $3.17 U.S. a pound.

On the corporate front, trucking and delivery company TransForce Inc. says it has a $310-million U.S. deal to buy Minnesota-based Transport America, Inc., which offers transportation services across the United States.

TransForce says the acquisition is expected to generate annual revenues of about $350 million U.S. for the Quebec company. Its shares were down 10 cents to $23.60.

Pershing Square Capital Management LP is seeking to replace a majority of directors at Allergan Inc. at a special meeting of shareholders. The move is part of a plan to back a proposed takeover of the Botox maker by Valeant Pharmaceuticals International Inc.

The investment firm headed by Bill Ackman is the largest shareholder at Allergan with a 9.7% stake. On Friday, Valeant raised its stock-and-cash offer to about $180 U.S. per share, valuing Allergan at more than $54 billion U.S. Valeant shares edged up 25 cents to $142.59.

There remains a trickle of first-quarter earnings reports coming out this week.

Investors will look to see how Hudson's Bay Co. fared during the quarter on Tuesday and Laurentian Bank posts results on Wednesday.

On the economic scene, a reading of manufacturing activity in China released over the weekend showed the country's factory sector continued to strengthen after a rough start to the year.

Domestically, manufacturers in Canada signaled the slowest improvement in overall business conditions in four months during May, according to the RBC Canadian Manufacturing Purchasing Managers' Index.

At 52.2 in May, down from 52.9 in April, the headline RBC PMI remained above the neutral 50.0 mark, but eased to its lowest level since January. The index was also weaker than the 53.3 average since the survey began in late 2010.

ON BAYSTREET

The TSX Venture Exchange dipped 7.82 points to 976.19.

In all, 10 of the 14 Toronto subgroups were higher, with the metals and mining group the champion, up 1.7%, global base metals hiking 1.2%, ande telecoms growing 0.9%.

The four laggards were weighed mostly by gold, down 0.6%, information technology, off 0.4%, and consumer staples, declining 0.3%.

ON WALLSTREET

After starting June with more record highs, stocks are down. Investors continue to weigh the mixed signals about how strong companies and consumers are heading into the summer.

The Dow Jones Industrial Average recovered 18.18 points to break for lunch Monday at 16,735.35

The S&P 500 inched up 0.62 points to 1,924.19, but the NASDAQ composite index slid 6.76 points to 4,235.86

Shares of Broadcom bounced 12% after the company revealed it is considering a possible sale of its cellular baseband business. The chip maker said a sale or wind down could generate $700 million U.S. in savings.

Gannett rose 2% after Barron's argued the media company could surge 40%, especially if it follows in the footsteps of peers by spinning off its publishing assets like USA Today.

Protective Life surged 15% amid reports that Japan's Dai-ichi Life Insurance is considering acquiring the Alabama-based company.

Apple could see its stock gyrate a lot this week based on developments out of its Worldwide Developers Conference, which kicks off on Monday in San Francisco. Investors are eager to learn more about Apple's efforts to enter new product categories.

The stock traded as high as $644 U.S. on Friday after the Beats deal closed and in anticipation of this week's conference. That's the closest the stock has been to its all-time high just over $700 U.S. from September 2012.

Shares of American Realty Capital Healthcare Trust raced 10% higher after it agreed to be sold to Ventas for $2.6 billion U.S. in cash and stock. Both companies are health care real-estate investment trusts, or REITs.

Energy and utility stocks were largely unmoved by the sweeping EPA rules unveiled on Monday aimed at slashing the power sector's carbon emissions 30% by 2030.

Prices for 10-year U.S. Treasuries dropped sharply, hiking yields to 2.54% from Friday's 2.46%. Treasury prices and yields move in opposite directions

Oil prices dumped 27 cents to $102.44 U.S. a barrel.

Gold prices fell a dollar to $1,245 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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