News Column

Tim, Burger King propel TSX higher

August 25, 2014



Consumer discretionaries, staples highest







Shares in Burger King and Tim Hortons have jumped dramatically on news the two fast-food companies are talking about joining forces, a move that could help the iconic coffee and doughnut chain improve its chances of expanding successfully in the U.S.

The S&P/TSX composite index was up 63.19 points to close at 15,598.74

The Canadian dollar was down 0.15 cents at 91.04 cents U.S.

It's not known what such a deal would be worth, but both stocks surged with U.S.-based Burger King up 16.2% to $31.40 U.S. on the New York Stock Exchange. Shares in Tim Hortons jumped $13.25, or 19.3%, to $82.03 on the Toronto stock market

Both companies have confirmed they are talking and have said Oakville, Ont.-based Tim Hortons and Miami-based Burger King would operate as stand-alone brands.

The TSX financials group gained ahead of earnings reports coming in this week from most of the big Canadian banks. Royal Bank posted a better than expected report and a dividend increase on Friday but the showing failed to push its stock higher. RBC shares took on 18 cents to $80.98.

The TSX base metals group rose as September copper was ahead a penny at $3.22 U.S. a pound. Teck Resources gained four cents to $25.13.

The energy group edged up as Imperial Oil up 50 cents to $57.32, and Canadian Natural Resources up 33 cents to $46.62

The gold sector declined, as Barrick Gold down 22 cents to $19.75-, while Goldcorp dropped 31 cents to $29.52.

ON BAYSTREET

The TSX Venture Exchange gained 2.66 points to 1,008.24

All but four of the 14 Toronto subgroups were higher, led by consumer discretionaries, up 2%, consumer staples, spiking 1.1%, and metals and mining, surging 0.7%.

The four laggards were weighed mostly by gold, down 1.3%, materials, slipping 0.5%, and real-estate, off 0.4%.

ON WALLSTREET

The S&P 500 climbed to a record close just below 2,000 on Monday, as U.S. stocks received a lift from deal activity and hints of more stimulus from the European Central Bank.

The Dow Jones Industrials ballooned 75.65 points to close Monday at 17,076.87

The S&P 500 gained 9.52 points to 1,997.92. The NASDAQ added 18.80 points to 4,552.53

Shares of Burger King Worldwide Inc. jumped 15% after the company said it is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc. The deal would be set up as a so-called tax inversion, moving Burger King's tax base to Canada. U.S.-listed shares of Tim Hortons rose 20%.

Shares of InterMune Inc. soared 36% after Switzerland-based Roche Holding AG said Sunday it will pay $8.3 billion U.S. for the California biotech firm.

Shares of Ann Inc. rose 6% after activist investor Engine Capital LP called on the parent of clothing retailer Ann Taylor to sell itself.

Inspiration for Monday's gains came in part from stronger European markets, where the Stoxx Europe 600 gained on hints of more stimulus from European Central Bank President Mario Draghi.

Prices for 10-year U.S. Treasuries gained a bit of strength, lowering yields to 2.39% from Friday's 2.40%. Treasury prices and yields move in opposite directions.

Oil prices were down 0.24 cents to $93.41 U.S. a barrel.

Gold prices dulled $3.30 to $1,276.90 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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