News Column

Early gains in Toronto

August 11, 2014



Bank downgrade in focus







Stock markets in Canada's biggest centre gained ground early Monday, as the risk of direct conflict between Russia and Ukraine eased and Middle East tensions appeared less acute

The S&P/TSX composite index gained 80.79 points to barge out of the gate at 15,277.10.

The Canadian dollar inched up 0.11 cents at 91.26 cents U.S.

Standard & Poor's said on Friday it had revised its outlook on Canadian banks to negative, due to concerns the government is becoming less willing to bail out banks in the event of a financial crisis.

Canaccord raised the target price on Alliance Grain to $26 from $23.50 with a buy rating. Alliance shares hiked 62 cents, or 3.1%, to $20.74.

CIBC cut the price target on Power Financial to $39.50 from $40, with an outperform rating. Power Financial shares took on 17 cents to $34.73.

However, CIBC raised the price target on SNC-Lavalin to $60 from $58, with a sector perform rating. SNC shares gained 84 cents to $57.75.

On the economic slate, Canada Mortgage and Housing Corporation said housing starts increased to a seasonally adjusted annual pace of 189,784 in July, compared with 185,952 in June.

ON BAYSTREET

The TSX Venture Exchange gained 2.19 points to open Monday at 999.66

All 14 Toronto subgroups were up to begin Monday, with global base metals surging 1.1%, metals and mining soaring 1%, and industrials up 0.9%.

ON WALLSTREET

U.S. stocks rose on Monday, extending Friday's sharp rally as concerns eased over both Federal Reserve monetary policy and the tense situation between Russia and Ukraine.

The Dow Jones Industrials acquired 45.18 points to 16,599.11

The S&P 500 picked up 9.12 points to 1,940.71. The NASDAQ composite tacked on 33.54 points to 4,404.94.

Priceline Group Inc shares rose 2.6% to $1,314.98 U.S. after the company reported a 26% rise in second-quarter revenue. However, the online travel agency forecast third-quarter earnings below expectations.

Kinder Morgan Inc on Sunday said it would put all its publicly traded units under one roof in a $70-billion U.S. deal, an amount including $27 billion U.S. in assumed debt. The company was responding to investor concerns about its growth prospects and complicated financial structure.

Shares jumped 8.6% to $39.17 U.S. as the biggest percentage gainers on the S&P 500. Among its units, Kinder Morgan Management surged 21% to $93.48 U.S. while Kinder Morgan Energy Partners LP was up 15% to $92.37 U.S.

MannKind Corp rose 22% to $9.95 U.S. after French drugmaker Sanofi signed a worldwide licensing agreement with the company worth up to $925 million U.S. MannKind was the Nasdaq's most active name.

Chiquita Brands International Inc climbed 31% to $13.21 U.S. in its biggest one-day advance since its 2002 trading debut after Juice maker Cutrale Group and Brazilian investment firm Safra Group offered to buy the company.

The United States recently launched air strikes in Iraq targeting Islamic State fighters marching on the country's Kurdish capital. The U.S. is also pushing for a new Iraq government, which Prime Minister Nuri al-Maliki has been battling to prevent, deploying forces across Baghdad as some parliamentary allies sought a replacement.

Separately, Israel and the Palestinians agreed on Sunday to an Egyptian proposal for a new 72-hour ceasefire in Gaza.

Prices for 10-year U.S. Treasuries sagged, raising yields to 2.43% from Friday's 2.42%. Treasury prices and yields move in opposite directions.

Oil prices gained 47 cents to $98.12 U.S. a barrel.

Gold prices dropped a dollar at $1,310.00 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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