News Column

Hortons extends rally, TSX remains higher

August 26, 2014



Energy stocks soar as well







Equities in Toronto hit another record high on Tuesday as shares of Tim Hortons extended their rally after the coffee chain said it planned to merge with Burger King Worldwide Inc in a $12.64-billion deal.

The S&P/TSX composite index was up 63.19 points to greet noon at 15,598.74. The benchmark TSX has climbed nearly 15% this year.

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

The companies said the cash-and-stock agreement would create the world's third-largest fast-food restaurant group, with roughly $23 billion in combined annual sales. Tim Hortons shares jumped 8.7% to a multi-year high.

Tim Hortons was up at $89.16 and was one of the most heavily traded stocks on the Toronto market. In the previous session, the stock shot up more than 19%.

The TSX received further support from shares of energy companies, which benefited from gains in the price of oil.

Suncor Energy rose 0.7% to $44.61 and Canadian Natural Resources improved 1.7% to $47.41.


Financials, the index's most heavily weighted sector, slipped slightly after two of Canada's major banks reported results.


Bank of Montreal gained 0.9%, to $82.53, after the company reported a stronger-than-expected third-quarter profit, helped by gains at its Canadian and U.S. personal and commercial banking units and higher revenue at its capital markets arm.


But Bank of Nova Scotia gave back 2% to $72.68 after the lender reported quarterly results.

ON BAYSTREET

The TSX Venture Exchange gained three points to 1,011.24

All but three of the 14 Toronto subgroups were higher by noon, with gold shining 1.2% brighter, energy better by 0.7%, and consumer discretionaries riding 0.6% higher.

The three laggards were financials, down 0.7%, utilities, off 0.1%, and health-care, easing 0.03%.

ON WALLSTREET

U.S. stocks notched modest gains Tuesday, with the S&P 500 again pushing above the milestone level of 2,000.

The Dow Jones Industrials improved 55.13 points to pause midday Tuesday at 17,132.

The S&P 500 gained 5.09 points to 2,003.01. The NASDAQ added 13.42 points to 4,570.77. The S&P benchmark hit an intraday record after a better-than-expected reading on consumer confidence, and investors took a mixed report on durable-goods orders in stride.

Best Buy Co. shares fell nearly 6% amid a sluggish outlook. The struggling retailer is the day's worst performer in the S&P 500.

Burger King Worldwide Inc. and Tim Hortons Inc. confirmed Tuesday that they plan to combine to create a new company in an $11-billion U.S. deal. They are getting financing help from Warren Buffett's Berkshire Hathaway Inc.

Burger King shares rose 0.8%, while Tim Hortons' U.S.-listed shares gained 9%.

Shares of Kite Pharma Inc.rose 17.5% after the biotech reported the majority of patients responded positively to its cancer-drug candidate.

Economically speaking, orders for U.S. durable goods skyrocketed a record 22.6% in July because of a surge in contracts for Boeing Co. aircraft, but bookings actually fell for most other industries, the Commerce Department reported.

Meanwhile, an August reading on consumer confidence came in at 92.4, above forecasts for 88.5, and U.S. home prices rose 1% in June.

Prices for 10-year U.S. Treasuries moved down, raising yields back to Monday's 2.39%. Treasury prices and yields move in opposite directions.

Oil prices were up 52 cents to $93.87 U.S. a barrel.

Gold prices picked up six dollars to $1,284.90 U.S. an ounce.


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Source: Baystreet Stock Market Update (Canada)


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