News Column

Stocks flat Friday

June 20, 2014



Health-care stocks healthiest





WEEKLY MARKET WRAP UP



Markets in Toronto ended little changed on Friday as a decline in shares of gold miners, which followed the bullion price lower, was offset by strength in the energy sector.

The S&P/TSX composite index shed 3.12 points to end the day and week at 15,109.10. Still, the broader Toronto market is up about 11% so far in 2014.

The Canadian dollar vaulted 0.56 cents at 93 cents U.S.

Health-care stocks were the most vibrant of the bunch with heavyweight Valeant Pharmaceuticals spiking $4.06 a share, or 3.2%, to $131.16.

Among real estate issues, Chartwell Retirement Residence acquired 22 cents a unit, or just over 2%, to $11.17.

Financials gained some ground as Bank of Montreal rose 31 cents to $77.66, while Royal Bank dropped a dime to $75.00.


Shares of energy producers gained as Suncor Energy was up 20 cents to $46.14, and Canadian Natural Resources strengthened 81 cents to $48.62.


Among gold producers, Barrick Gold Corp lost 34 cents, or 1.7%, to $19.16, while Goldcorp faded 34 cents, or 1.2%, to $29.31.

On the economic front, Statistics Canada reported that consumer prices rose 2.3% in the 12 months to May, following a 2.0% increase in April. On a seasonally-adjusted monthly basis, the Consumer Price Index increased 0.2% in May, after rising 0.3% in April.

What's more, retail sales increased for the fourth consecutive month in April, advancing 1.1% to $41.6 billion. Gains were widespread as 10 of 11 subsectors, representing 98% of retail trade, posted increases.

Lastly, the ratio of Canadian household debt to income edged down further in the first quarter from the record high it hit last year, buttressing policymakers' expectations that a soft landing is in store for the housing market and family indebtedness.

ON BAYSTREET

The TSX Venture Exchange sidled back 1.19 points to 1,020.87

The 14 Toronto subgroups were evenly split between gainers and losers, with health-care leading the former group, up 1%, real-estate 0.7% into the green, and energy better by 0.6%.

The seven laggards were weighed by gold, down 1.3%, consumer staples and materials each off 0.9%.

ON WALLSTREET

It was a strong week for investors in New York

The Dow Jones Industrials pushed higher 25.62 points to finish Friday at 16,947.08

The S&P 500 gathered 3.39 points to 1,962.87, hitting another new record and trading above 1,960 for the first time, and the NASDAQ composite gaining 8.71 points to 4,368.04, held back by Oracle's poor performance. Don't look for records there any time soon: it's about 13% off its 2000 peak.

All three of the major indexes closed the week with 1% or greater gains.

Oracle disappointed Wall Street on both sales and earnings, and now it's getting punished. Its stock is down more than 4%.The culprit, revealed in the quarterly filing, is new software licenses, which showed no growth (falling way short of the 20% growth that analysts had been expecting).

However, Things are looking up for smartphone pioneer BlackBerry. On Wednesday it announced a new partnership with Amazon for its app store. It reported Thursday that it actually made money last quarter as analysts were expecting a loss, and it announced a couple of new devices on its earnings call yesterday.

A "phablet" called the Passport and a BlackBerry "Classic" are on the way later this year. BlackBerry shares were up around 8%.

CarMax is having a great morning after reporting stronger sales. The company said it had growth in every area of the company except warranties.

It also said that it was continuing to test the waters of sub-prime auto lending after its financing division reported 9% income growth. The stock was up more than 16%. AutoNation, another nationwide used car dealership chain, was up more than 4%.

Coach has fallen nearly 3% so far today after the company said during its annual Investor Day that it was going to close 70 stores worldwide at a cost of as much as $300 million U.S.. For context, the company said it made $1 billion U.S. last year.

Darden Restaurants reported poor earnings and gave another glimpse into why shareholders were so mad it didn't shove Olive Garden out the door when it dumped Red Lobster earlier this year.

Darden also owns Longhorn Steakhouse and smaller chains like Bahama Breeze and Capitol Grille. These restaurants reported decent sales growth. But Olive Garden, which still represents the biggest component of Darden's revenue, continues to struggle. Red Lobster is also deflating.

The stock fell 3.8% Friday.

Smith & Wesson reported earnings were good but sales are falling. After a fear-driven boost in gun sales, things are getting back to normal and Americans are buying fewer guns. Thus, shares were down over 9%.

Ireland-based Shire has rejected AbbVie's unsolicited $46-billion U.S. bid for two reasons: It thinks it's undervalued and sees too many risks with AbbVie looking to move its tax base to the U.K. Shire shares were up 17%, and AbbVie stock was slightly lower.

Activist hedge fund investor Carl Icahn wrote a letter to the CEO of Family Dollar calling for the company to sell itself immediately, saying that the dollar store industry will inevitably start shrinking.

He's also demanding to nominate three members for the company's board of directors. Investors may have seen this coming, though. The stock was flat into the afternoon.

Prices for 10-year U.S. Treasuries were static, keeping yields at Thursday's 2.62%.

Oil prices climbed 64 cents to $106.69 U.S. a barrel.

Gold prices took on $1.60 at $1,315.70 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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