News Column

Flat open in Toronto

June 3, 2014

Element Financial in focus

Equity markets in Toronto sustained a flat to slightly lower open Tuesday as further weak inflation data from the euro-zone raised expectations that the European Central Bank will take action to support a fragile recovery.

The S&P/TSX composite index ditched 0.68 points to begin Tuesday at 14,680.76.

The Canadian dollar dropped 0.12 cents to 91.62 cents U.S.

Traders also took in a strong earnings report from retailer Hudson's Bay Company

HBC posted first-quarter net earnings from continuing operations of $176 million or 97 cents a share, compared with a loss of $22 million or 19 cents a share in the same quarter of 2013. Retail sales jumped to $1.85 billion, up from $884 million in the same quarter last year.

Same stores sales, which are stores that have been open for at least a year, were up 2.8% year-over-year. HBC shares let go of 39 cents to $16.88

In other corporate developments, Element Financial Corp. will pay $1.4 billion U.S. cash to buy PHH Corp.'s North American fleet management services business.

PHH Arval had about $4.6 billion U.S. of assets as of March 31, including $4 billion U.S. invested in fleet leases. Element shares added 29 cents to $13.67.


The TSX Venture Exchange recovered 2.95 points to 981.42.

Eight of the 14 Toronto subgroups were lower at the outset, with metals and mining down 1.2%, global base metals off 0.6%, and health-care fading 0.5%

The half-dozen gainers were led by consumer staples, up 0.4%, while telecoms and consumer discretionaries each gained 0.3%.


All three major indices opened moderately lower after the S&P and Dow set fresh records Monday.

The Dow Jones Industrial Average was down 32.43 points at the start of business Tuesday to 16,711.20

The S&P 500 hesitated 1.99 points to 1,922.98, but the NASDAQ composite index dipped 0.14 points to 4,237.06

Hillshire Brands shares surged nearly 9% after the open after the food company's board of directors authorized takeover discussions with Pilgrim's Pride and Tyson Foods, which are in a bidding war to buy Hillshire. Both Pilgrim's and Tyson shares opened modestly lower.

Krispy Kreme shares dropped like dough into a deep fryer after reporting earnings that were in line with expectations but sales that were much lower than Wall Street expected to see. The stock is nearly more than 13%.

Shares in Google were weak, opening down more than 1%, after the Wall Street Journal reported that the tech giant plans to spend over $1 billion U.S. on a "fleet of satellites" designed to improve internet access in remote areas.

Apple failed to excite investors after unveiling new products at its Worldwide Developers Conference yesterday including iOS8 and a new health and home-related software. Shares are up 1% in early trading.

Dollar General shares opened higher despite the retailer reported a modest quarterly gain in sales and profit that failed to meet expectations. Investment bank Sterne Agee & Leach downgraded the stock to hold from buy and lowered its earnings expectations for the company.

Quiksilver shares fell as much as 45% in early trading after a disastrous quarterly earnings report that showed the surf and beach apparel company losing much more money than analysts anticipated.

The U.S. Census Bureau is slated to release its latest data on monthly factory orders this morning. Later in the day investors will get a sense of how the auto sector is performing as data on vehicle sales is released for May.

Prices for 10-year U.S. Treasuries dipped again, raising yields to 2.56% from Monday's 2.53%. Treasury prices and yields move in opposite directions

Oil prices fell 11 cents to $102.36 U.S. a barrel.

Gold prices slipped 40 cents to $1,243.60 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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