News Column

Toronto at 6-yr. highs

June 9, 2014

Energy, IT stocks improve most

The Toronto stock market climbed Monday -- driven by strong commodity prices and amid little economic news besides some mixed data from China over the weekend – to heights it hasn't seen since the early days of the 2008 recession.

The S&P/TSX composite index gained 32.31 points to end Monday at 14,871.21

The Canadian dollar grew 0.20 cents to 91.69 cents U.S.

The Toronto market has gained more than 9% this year, but some investors are starting to get concerned about stock prices outpacing fundamentals.

Shares of energy producers climbed, with Suncor Energy surging 1.3% at $43.39, and Canadian Natural Resources advanced 0.7% to $46.31.

The materials sector, which includes mining stocks, gained as Barrick Gold erased 0.6% to $17.42, and Agrium rose 0.1% to $99.09.

Information technology issues also displayed some muscle, most notably, BlackBerry, which climbed 2.7% to $8.62.

Health-care issues fared not so well, as Valeant Pharmaceuticals settled 0.8% to $138.11.

In corporate news, Ritchie Bros Auctioneers jumped 4%, to $26.26, after Cantor Fitzgerald and raised its rating on the stock.

On matters economic, Canadian housing starts picked up more than expected in May and the number for April was revised higher.

A report from the Canada Mortgage and Housing Corp showed the seasonally-adjusted annualized rate of housing starts rose to 198,324 in May from an upwardly revised 196,687 units in April. That surpassed analysts' expectations for a May reading of 185,000.


The TSX Venture Exchange eked ahead 0.54 points to 987.99

Nine of the 14 Toronto subgroups were higher, as energy stocks charged ahead 0.7%, information technology gained 0.6%, and financials were 0.4% to the good.

The five laggards were weighed mostly by health-care issues, sicker by 0.7%, gold, losing 0.4% of its sheen, and global base metals, fading 0.2%.


Despite the bevy of big deal activity this morning, stocks traded fairly flat into the afternoon.

The Dow gained 18.82 points, to finish the day at 16,943.10; even so, another all-time high for the blue chips.

The S&P 500 added 1.83 points to 1,951.27 – also a new peak for that index -- and the NASDAQ composite index prospered 14.84 points, to 4,336.24

Merck announced earlier this morning that it was going to acquire Idenix Pharmaceuticals, a hepatitis C drug producer for $24.50 U.S. a share (a deal worth nearly $4 billion U.S.). Merck shares are flat while Idenix stock is up an eye-popping 231%.

Achillion Pharmaceuticals, another hepatitis C drug manufacturer, is up nearly 60%, suggesting it might also be an M&A target. One in 100 Americans has chronic hep C infections, according to the Centers for Disease Control.

In other merger news, Tyson Foods announced its plans to acquire Hillshire Brands for $63 U.S. a share, ending its bidding war with Pilgrim's Pride for the maker of brands like Jimmy Dean and Hillshire Farm.

Tyson stock is down about 5.5%, Hillshire stock is up the same amount. Pilgrim's Pride shares are trading just under 6.5% lower.

Hedge fund manager Carl Icahn of Icahn Enterprises announced a 9.3% stake in Family Dollar on Friday after the bell. Now the whole discount retail sector is drawing excitement.

In response to Icahn's purchases, Family Dollar's board announced this morning a "shareholder rights plan" aimed at preventing a hostile takeover and contingent on someone buying a 10% or greater stake in the company.

Family Dollar shares are up about 14% in afternoon trading. Rival retailer Dollar General is up over 7% as investors consider whether Icahn may push for the two companies to merge. Shares of Dollar Tree are flat after trading as high as 3% higher earlier in the day.

Apple's seven-for-one stock split went into effect today. The tech giant is issuing more shares to existing investors in order to bring down the price of the stock and bring in more retail investors. Apple stock closed at about $646 U.S. Friday, but started trading today at $92.70 U.S. this morning. Shares bounced around most of the day and were up just over 1.5%.

Time Inc., the magazine publisher of Time, Fortune, Sports Illustrated and other titles, began its first day of trading after being spun off from TimeWarner. Shares were down about 1.8%.

After a surge in late trading on Friday, K-Cup coffee company Keurig Green Mountain was about 6.5% lower, giving almost all of those gains on lower volume.

Prices for 10-year U.S. Treasuries dropped, raising yields to 2.61% from Friday's 2.60%. Treasury prices and yields move in opposite directions

Oil prices up $1.74 to $104.40 U.S. a barrel.

Gold prices gained 80 cents at $1,253.30 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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