News Column

TSX takes tumble

July 7, 2014



Cellphone makers in focus







The Toronto stock market fell Monday amid news that Ottawa will be holding another auction for wireless spectrum next year to increase competition in the cellphone market.

The S&P/TSX composite index plunged 94.95 points to greet noon at 15,120.01

The Canadian dollar ditched 0.13 cents to 93.78 cents U.S.

Federal Industry Minister James Moore said Monday that the majority of the spectrum will be set aside for new entrants and is part of the government's efforts to lower the prices of wireless cellphone plans. Shares in the big three telecom giants all reacted negatively to the news, which excludes the big three telecoms from bidding in the auction.

Shares in BCE Inc. dropped 15 cents to $48.27, Rogers Communications fell 43 cents to $42.59, while Telus Corp. dipped 49 cents to $39.45.

The telecom sector was one of the leading decliners on the TSX, down in early trading.

The Bank of Canada is expected to release its latest survey of Canadian businesses. The business outlook, which will be released Monday, is one of the ways the central bank gauges how the economy is faring.

It relies on a summary of interviews conducted with senior management at about 100 Canadian firms on topics such as demand and capacity, and how they view future economic activity.

On the economic front, Statistics Canada reported that municipalities issued building permits worth $6.9 billion in May, up 13.8% from April. This followed a 2.2% rise in the previous month.

The hike in May's permits resulted primarily from higher construction intentions for commercial buildings in Ontario and Manitoba, as well as multi-family dwellings in British Columbia.

Western University'sRichard Ivey School of Business said its Purchasing Managers Index by the end of June 2014 stood at 46.9. The corresponding Ivey PMI figure for May 2014 was 48.2, compared to 55.3 for June 2013, and 49.0 for June 2012

The PMI solicits whether business purchases last month were higher, the same, or lower than the previous month, and a figure above 50 shows an increase while below 50 shows a decrease.

ON BAYSTREET

The TSX Venture Exchange dropped 6.34 points to 1,031.42.

In all, 10 of the 14 Toronto subgroups were negative at noon, as energy dwindled 1.3%, telecoms fell 1.1%, and industrials tailed off 0.9%.

The four gainers were led by metals and mining, up 1.1%, information technology, strengthening 0.6%, and global base metals, spiking 0.3%.

ON WALLSTREET

The main stock indices are stepping back emphatically from last week's record levels, following a long weekend.

The Dow let go of 55.35 points to pause for lunch at 17.012.91

The S&P 500 eased back 8.23 points to 1,977.21, and the NASDAQ composite fell 29.09 points to 4,456.84.

Markets were shut down Friday for the July 4 holiday.

King Digital, the company behind the viral monster Candy Crush, has finally opened above its $22.50 U.S. IPO price more than three months after it started trading in late March. Shares on that disastrous first day dropped more than 15%. The stock opened about 4% higher this morning before coming back down to trade right around the IPO price.

Expedia's stock is slightly lower after it announced yesterday that it bought Australian travel website Wotif.com for $658 million U.S. Australia-listed shares in Wotif, which operates throughout Southeast Asia, rose 25% on the news. Expedia is trading at an all-time high of around $82 U.S. Several analysts have recently upgraded the stocks price target to above $90 U.S.

BlackBerry's shares are up almost 6% this morning. The Economic Times of India reported over the weekend that the company would soon announce a joint health care services platform with tech firm Nathhealth. India is an important market for BlackBerry's Asia Pacific division, which made 15.6% of the firm's revenue in the last quarter.

Archer Daniels Midland, a big food and commodities company, purchased Wild Flavors for about $3.1 billion U.S. Wild makes the popular Capri Sun juice, among other things. ADM's stock is slightly positive in so far in today's trading.

Petsmart stock is slightly higher this morning. The company said vaguely in a filing that it was considering ways to give money back to shareholders, though no concrete plans have been developed.

This week marks the start of "earnings season," which is when America's biggest companies release updates on their revenues and income and give a peek into the shape of the U.S. economy in the second quarter.

Prices for 10-year U.S. Treasuries gained ground, felling yields to 2.61% from Thursday's 2.65%. Treasury prices and yields move in opposite directions.

Oil prices fell 69 cents to $103.37 U.S. a barrel.

Gold prices skidded $5.20 to $1,315.40 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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