News Column

TSX at two-week high

August 18, 2014



Dollar General at forefront of rally







Stocks in Canada's biggest market reached their highest level in more than two weeks on Monday as the risk of a further escalation of the conflict in Ukraine appeared to diminish, boasting gains in most major sectors.

The S&P/TSX composite index gained 34.23 points to close Monday at 15,338.47. The Toronto market was up for a third straight session and has gained nearly 13% this year.

The Canadian dollar was even on the day at 91.86 cents U.S.

The biggest gainer on the day was in information technology, where BlackBerry muscled higher by 1.6% to $10.61, and Descartes Systems Group triumphed 1.4% to $15.44.

Financials, the index's most heavily weighted sector, added strength, with Royal Bank of Canada climbing 0.7% to $80.41 and Bank of Nova Scotia advancing 0.2% to $72.55.


Shares of industrial companies also moved up as Air Canada jumped 5.9% to $8.48.


The gold-mining sector recovered lost ground, as the price of bullion dipped. Barrick Gold eked up 0.1% to $20.40, though Goldcorp declined 0.1% to $31.12.

Fears of a broader regional conflagration over Ukraine started to ease after Russia said on Sunday that weekend talks among foreign ministers made progress in resolving differences.


Even so, investors remained unsettled when Ukraine accused pro-Russian rebels on Monday of shooting rocket fire on a convoy of buses of refugees, killing people trapped in burning vehicles but the separatists denied responsibility.

On the economic beat, Statistics Canada reported this morning that foreign investors reduced their holdings of Canadian securities by $1.1 billion in June, following investment totaling $31.6 billion over the previous two months.

Meanwhile, Canadian investors added $2.0 billion of offshore investments to their portfolios in June.

ON BAYSTREET

The TSX Venture Exchange dipped 5.28 points to 990.62

All but three of the 14 Toronto subgroups were higher, with information technology soaring 0.8%, while materials and industrials strengthened 0.6% each.

The three laggards were health-care and energy, each down 0.4%, and telecoms, off 0.1%.

ON WALLSTREET

U.S. stocks rose, extending the biggest weekly gain since July for the Standard & Poor's 500 Index, as tensions eased over global conflicts and Dollar General Corp. rallied on merger activity.

The Dow Jones Industrials jumped 175.83 points, or 1%, to finish Monday at 16,838.64

The S&P 500 added 16.67 points to 1,971.13. The NASDAQ composite popped 43.38 points – or 1% -- to 4,508.31, a new high for the year and a level last seen in March 2000.

Dollar General surged 12% after offering $9.7 billion U.S. for Family Dollar, which rallied 4.9%. Delta Air Lines Inc. and Southwest Airlines Co. led gains among industrial companies as oil prices fell.

Clothing retailer Urban Outfitters Inc. is reporting earnings today. Of the S&P 500 companies that have reported quarterly results this season, 76% have topped earnings estimates, while 65% exceeded sales projections, according to data compiled by Bloomberg.

Homebuilders rose as confidence in the industry climbed to the highest level in seven months. Internet and biotechnology stocks rallied, continuing to pare losses from earlier this year.

On the economic front, the NAHB/Wells Fargo Housing Market Index for August came in at 55, its highest level in seven months. Economists had expected a reading of 53.

Prices for 10-year U.S. Treasuries sagged, raising yields to 2.39% from Friday's 2.35%. Treasury prices and yields move in opposite directions.

Oil prices slumped 85 cents to $96.52 U.S. a barrel.

Gold prices plummeted $14.90 at $1,299.60 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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