News Column

TSX slips ahead of corporate earnings

July 28, 2014



Metals lead, energy sags







Equities in Toronto were slightly lower, weighed by energy stocks, Monday afternoon ahead of a heavy slate of earnings from resource companies this week.

The S&P/TSX composite index dipped 9.82 points to close out Monday at 15,445.22. The index is still up about 13% this year.

The Canadian dollar climbed 0.16 cents at 92.59 cents U.S.

Big names in the Canadian gold mining and energy sector, such as Barrick Gold Corp. and Suncor Energy, report their second-quarter results this week.

Those two sectors are the best performing on the TSX year to date with energy up 19% while the gold sector is up 28%, but that's after being cut in half last year.

Barrick shares dropped two cents to $20.18, while Suncor sank 23 cents to $45.34.

Bombardier also reports its results Thursday. Its shares dipped four cents to $3.61 and investors will be looking for an update on the development of the company's crucial CSeries airliner, which has been beset by a series of delays.

The energy sector declined, and Athabasca Oil Corp. shares were 47 cents or 6.8% to $6.41 as the company seeks to reassure investors that it is working to close a $1.23-billion oilsands asset sale to PetroChina.

Techs were also weak with BlackBerry down 37 cents to $10.75 as CEO John Chen told Bloomberg Television that he has no acquisition offers on his desk. He said BlackBerry is focused on turning its ailing business around independently, and its chances of success are "better than 80/20."

The data calendar for Canada is light this week with only one major report. Statistics Canada posts May gross domestic product figures on Thursday. Economists look for a 0.3% gain for the month.

ON BAYSTREET

The TSX Venture Exchange moved higher 2.31 points to 1,019.75.

Nine of the 14 Toronto subgroups were higher on the day, metals and mining leading the parade, up 1.1%, gold, up 0.8%, and global base metals, spiking 0.7%.

The five laggards were weighed mostly by energy, sagging 0.8%, information technology, sinking 0.7%, and industrials, off 0.6%.

ON WALLSTREET

It was another merger Monday on Wall Street. But that didn't excite investors too much.

The Dow Jones Industrials overcame early negative readings and closed 22.02 points in the green at 16,982.59.

The S&P 500 eked 0.57 points higher to 1,978.91. The NASDAQ composite fell 4.65 points to 4,444.91

Zillow confirmed that it plans to buy Trulia for $3.5 billion U.S. in stock.

The acquisition merges the two biggest names in online housing, and some media outlets reported last week that some real estate agents were nervous that the sites' combined depth of local housing data could make in-person brokers irrelevant. Shares of Trulia surged 18%, while Zillow was up modestly.

Family Dollar shares rallied 25% on news that it's beng bought by another discount retailer, Dollar Tree, for $8.5 billion U.S. Dollar Tree's stock also climbed.

Tyson Foods shares were up after the company announced in its earnings report that it plans to sell its Mexican and Brazilian poultry units for $575 million U.S. Herbalife, which skyrocketed last week after hedge fund manager Bill Ackman failed to convince investors of his case against the nutritional supplement company, will report after the bell.

El Pollo Loco continues to look appetizing after its initial public offering last week. The stock shot up almost 30% Monday, following a more than 60% gain in its first day of trading Friday. A trader said the successful offering could help the chain go national.

Shares of Wynn Resorts got a boost ahead of its quarterly earnings report scheduled for Tuesday. Last week, the Nevada Gaming Control Board announced a jump in June revenue from gaming licensees on the Las Vegas Strip.

Rite Aid shares lost steam due to reports that hedge fund manager David Einhorn of Greenlight Capital sold of his position in the stock.

Prices for 10-year U.S. Treasuries lost ground, raising yields to 2.49% from Friday's 2.47%. Treasury prices and yields move in opposite directions.

Oil prices decreased 39 cents to $101.70 U.S. a barrel.

Gold prices took on $1.30 to $1,304.60 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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