News Column

Recovery for TSX by noon

August 6, 2014



Tim Hortons out with earnings







The Toronto stock market registered a minor gain late morning Wednesday with traders cautious amid worries about growing Russian troop strength on the border with Ukraine.

The S&P/TSX composite index recovered 31.69 points to greet noon at 15,219.40.

The Canadian dollar gained 0.30 cents at 91.54 cents U.S.

Earnings news also pushed the market higher as Tim Hortons reported that same-store sales grew 2.6% in Canada and 5.6%in the United States. The restaurant chain also anticipates earnings per share to be near the higher end -- or slightly above -- its current target range of $3.17 to $3.27 earnings per share for the year and its shares ran ahead 5.9% to $63.61.

Molson Coors Brewing Co. beat expectations as quarterly net earnings increased 9.5% to $290.7 million U.S. in the second quarter on higher revenues. Revenues grew nearly 1% to $1.2 billion even though worldwide beer volume fell to 16.6 million hectolitres and its shares ran up 6.3% to $71.46 U.S. in New York.

On the economic front, Statistics Canada reported this morning that merchandise exports rose 1.1% in June, while imports declined 1.8%. So, Canada's trade surplus with the world widened from $576 million in May to $1.9 billion in June.

ON BAYSTREET

The TSX Venture Exchange remained negative 1.08 points to 992.79

All but four of the 14 Toronto subgroups were positive by lunchtime, with gold soaring 1.6%, materials stronger by 0.9%, and health-care, up 0.5%.

The four laggards were weighed mostly by utilities and telecoms, each down 0.4%, and consumer staples, off 0.2%.

ON WALLSTREET

After struggling early on, Wall Street made its way into positive territory on Wednesday despite trouble overseas.

The Dow Jones Industrials recovered 28.03 points to 16,457.50

The S&P 500 moved forward 3.27 points to 1,923.48. The NASDAQ composite regained 16.02 points to 4,368.86.

All the major U.S. indexes dropped on Tuesday, with much of the retreat blamed on renewed concerns about geopolitical tensions with Russia. The Dow plummeted 140 points and remains in the red on the year.

Shares of Walgreens plummeted 12.5% after the company confirmed it's taking full control of the U.K.'s Alliance Boots but will not move headquarters out of the U.S. That news disappointed investors, who hoped the pharmacy chain would shift its base to the U.K. to save money on taxes in a controversial deal known as an inversion.

Time Warner plunged 12% after Rupert Murdoch's 21st Century Fox announced it has given up on pursuing a takeover of the broadcast giant. Time Warner shares surged in July when Murdoch's $80-billion U.S. proposed bid first hit the headlines.

Time Warner shares remained under heavy sell pressure even after logging earnings that crushed expectations amid continued HBO strength. Fox, which is set to report after the close, rallied 5% on the deal news and new share buyback.

A tie-up between Sprint and T-Mobile is also now off the table. Shares of both companies tumbled on the news. That could leave French telecom company Iliad as the frontrunner to buy T-Mobile.

Groupon investors are holding a fire sale. The daily deals site plummeted 16.5% after alarming investors with a wider quarterly loss than expected and a gloomy outlook for the rest of the summer.

Walt Disney shares flatlined as stronger-than-expected earnings were countered by higher costs at cash-cow ESPN.

On a more positive note, AOL popped 9% as Wall Street cheered a 12% jump in second-quarter revenue that easily beat expectations.

Investors also chugged shares of Molson Coors Brewing. The brewer sold less beer during the second quarter but grew profits by hiking prices.

Shares of Activision Blizzard marched 2.5% higher as the maker of "Call of Duty" and other video games posted earnings that exceeded forecasts.

Bank of America ticked 1.5% higher after the Federal Reserve gave a green light to the bank's plan to boost its dividend. The approval follows an embarrassing math error by BofA.

Keurig Green Mountain is among the companies reporting after the close

Prices for 10-year U.S. Treasuries gained ground, lowering yields to 2.47% from Tuesday's 2.48%. Treasury prices and yields move in opposite directions.

Oil prices gathered 11 cents to $97.82 U.S. a barrel.

Gold prices spiked $21.80 to $1,307.10 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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