News Column

Stocks rise as tensions ease

July 22, 2014



CN, Teck in focus







A strong earnings report from Canadian National Railway helped push the Toronto stock market higher Tuesday as traders put geopolitical concerns aside for the moment and concentrated on the health of corporate North America.

The S&P/TSX composite index hiked 65.14 points to end Tuesday at 15,315.13

The Canadian dollar was unchanged at 93.14 cents U.S.

Canadian National Railway beat expectations as its second-quarter profit increased 18% to $847 million, while revenues rose 17% to a record $3.12 billion.

Adjusted profit amounted to $1.03 per diluted share, three cents above analyst forecasts, when it reported results on Monday after markets closed.

CN also delivered a strong outlook and its shares ran up $1.44 to $74.39 after earlier hitting a new 52-week high of $74.83.

Other big Canadian corporations reporting earnings this week include mining giant Teck Resources, telecom Rogers Communications and grocer Loblaw Cos. Ltd., all on Thursday.

Teck shares gained six cents to $25.43, while Rogers picked up 28 cents to $42.14, and Loblaw hiked $1.47, or 3%, to $50.90

The metals and mining sector advanced, while September copper rose one cent to $3.21 U.S. a pound.

The energy sector climbed as Imperial Oil gathered 24 cents to $57.28.

The gold sector declined as Barrick Gold dumped 30 cents to $20.21, and Goldcorp demurred 35 cents to $29.48

ON BAYSTREET

The TSX Venture Exchange gained 4.34 points to 1,010.82.

All but three of the 14 Toronto subgroups were winners on the day, especially global base metals, up 1.4%, consumer staples, advancing 1.3%, and the metals and mining group, growing 1.2%.

The three laggards were gold, off 1.2%, health-care, down 0.8%, and materials, sliding 0.3%.

ON WALLSTREET

A dose of healthy company earnings gave investors extra energy Tuesday.

The Dow Jones Industrials jumped 61.81 points to 17,113.54

The S&P 500 gained 9.90 points to 1,983.53, and the NASDAQ composite hiked 31.32 points to 4,456.06

Food and beverage stocks were on the move as some major restaurant chains released second quarter results.

Shares of Chipotle skyrocketed 12% after the burrito maker posted earnings late Monday that surged from the year earlier despite higher menu prices.

But McDonald's sank after the fast food giant reported second quarter revenue and profit that fell short of expectations due to lower sales in the U.S. and Europe.

Domino's stock delivered for Wall Street after the pizza delivery service said that earnings grew 17.5%, driven by strong same store sales domestically and internationally.

Investors also got earnings from Coca-Cola Tuesday to wash down all those restaurant results. But the stock fizzled after saying its earnings for the full year are expected to suffer from unfavorable exchange rates.

The internet is king for Comcast, which said in its second-quarter earnings report Tuesday that a 15% increase in high speed internet users offset losses from so-called "cord cutters" who are dropping cable TV subscriptions.

The stock moved higher on the news. So did shares of Time Warner Cable, which Comcast has an agreement to buy.

Part of the reason consumers are ditching traditional cable is due to companies like Netflix, which now boasts over 50 million members. Still, the stock dipped over 5% Tuesday since the company said in its earnings report that U.S. streaming subscriptions were lower compared to the year earlier.

Verizon also experienced an earnings bump, driven by strong revenues from its wireless and Fios segments. Shares were up modestly Tuesday.

Investors will get more insight into the intersection of business and tech Tuesday when Apple and Microsoft announce quarterly results after the bell.

Shares of Herbalife jumped over 20% even though a major hedge fund manager held a press conference revealing what he found after a nearly two-year probe into the company's nutrition clubs.

Pershing Square'sBill Ackman has repeatedly called the company a pyramid scheme. The stock has fallen around 22% this year, but it's still up big since Ackman's short selling campaign against the firm began in December 2012.

Prices for 10-year U.S. Treasuries regained lost ground, lowering yields to Monday's 2.47%. Treasury prices and yields move in opposite directions.

Oil prices sank 70 cents to $103.89 U.S. a barrel.

Gold prices lost $7.70 to $1,306.20 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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