News Column

TSX soars into noon

July 25, 2014

Earnings stay positive

The Toronto stock market was building a head of steam by noon Friday, at the end of a positive week amid a rebound for U.S. durable goods orders.

The S&P/TSX composite index grew 81.33 points, to greet noon at 15,475.78

The Canadian dollar faded 0.63 cents at 92.44 cents U.S.

The Toronto stock market headed for a positive week amid a string of record-high closes after investors took in a series of positive earnings reports from Canadian National Railway, Teck Resources and Loblaw.

The metals and mining sector was down, giving back all of the gain racked up Thursday in the wake of a strong report on Chinese manufacturing.

However, that data competed with a warning from the International Monetary Fund that economies around the world are taking longer than expected to recover. Its latest economic outlook predicts global growth will be about three-10ths of a point lower at 3.4% this year than it thought in April.

September copper was unchanged at $3.27 U.S. a pound.

In other corporate news, Candu Energy Inc., an SNC-Lavalin company, has signed a co-operation agreement with China Nuclear Power Engineering Company Ltd. for the construction of two nuclear reactors at the Cernavoda Nuclear Power Plant in Romania.

It is hoped the deal could lead to a series of global infrastructure projects between SNC and the Chinese nuclear industry. SNC rose 81 cents to $57.32.


The TSX Venture Exchange gained 1.26 points to 1,012.91.

Nine of the 14 Toronto subgroups gained ground during the morning session, with gold jumping 2.4%, materials improving 1.6%, and consumer staples up 1%.

The five laggards were weighed mostly by telecoms, down 0.7%, while the metals and mining and health-care groups each stepped back 0.2%.


Stocks appeared to be ending the week on a sour note, as the clock approached noon ET on Friday.

The Dow Jones Industrials plummeted 124.13 points to pause for lunch at 16,959.67. A 4% drop In Visa, which has the biggest weighting in the Dow, weighed down the blue chips.

The S&P 500 dropped 8.81 points to 1,979.17. The NASDAQ composite slipped 25.15 points to 4,446.96, largely due to a more-than-11% drop in Amazon following its latest earnings.

Amazon's sales jumped more than 20% but it also reported a $123-million U.S. loss. Some investors may be growing tired of Amazon's long history of quarters where it loses more than expected due to big investments.

Visa is having the second-worst day in the S&P 500 behind Amazon. It's down more than 4% in mid-morning trading.

It had a great quarter that exceeded expectations and even spurred a number of price target upgrades from analysts. But it lowered its revenue growth forecast. Rival MasterCard, whose earnings come out in a week, is down 2%.

Starbucks is also out with a good quarter that doesn't seem to be swaying investors. Its shares are down 2%.

Today's the first day of trading for El Pollo Loco, whose shares priced at $15 U.S. per share, the higher end of its IPO range.

The company has a lot of debt and isn't exactly Chipotle, but it has ambitious expansion plans and healthy IPO market behind it. The stock is up 28% so far.

A few other companies are due to debut today, but it remains to be seen if they have El Pollo Loco's spark: Orion Engineered Carbons is flat, and Ocular Therapeutix and Innocoll haven't started trading yet.

Cynk Technology, the mysterious social network with no earnings, revenue or even assets, is once again trading after the SEC suspended trading two weeks ago following a from-nowhere 25,000% price increase. The stock was down more than 80% in late morning trading.

21st Century Fox merged its BSkyB cable assets in Germany and Italy with BSkyB in England, freeing up $8.3-billion U.S. n cash. The market thinks that the money might be put to use to help Rupert Murdoch's Fox make a higher bid for Time Warner, which Fox has sought to buy for $80 billion U.S. Time Warner turned down the offer. Fox and Time Warner shares were flat Friday.

Prices for 10-year U.S. Treasuries gained ground, lowering yields to 2.48% from Thursday's 2.51%. Treasury prices and yields move in opposite directions.

Oil prices docked a penny to $102.06 U.S. a barrel.

Gold prices added $7.50 to $1,298.30 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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