News Column

Toronto set to open lower

August 6, 2014



Athabasca Oil in focus







Stock futures pointed to a lower opening for Canada's main stock index on Wednesday after reports of a build-up of Russian troops near the Ukraine border dampened investors' risk appetite across global markets.

The S&P/TSX composite index moved lower 27.55 points, to close Tuesday at 15,187.71. Wednesday morning futures were down 0.01%.

The Canadian dollar dipped 0.07 cents to 91.16 cents U.S. early Wednesday

China's decision to investigate two Canadians for suspected spying highlights a sharp and unexpected deterioration in bilateral ties just months ahead of a trip by Canada's Prime Minister Stephen Harper to Beijing.

Canada and the European Union have finalized the text of a proposed free trade deal after months of disagreements, but implementation is still about two years away, Canadian officials said on Tuesday.

Oil sands producer Athabasca Oil reported a bigger quarterly loss as it set aside $49 million to settle some claims by PetroChina Co Ltd's Phoenix Energy Holdings Ltd.

National Bank Financial raises target on TMX Group to $63 from $60, with a sector perform rating.

CIBC cut the target on Avigilon Corp. to $45 from $50, with an outperform rating.

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 slipped 6.76 points Tuesday to 993.87

ON WALLSTREET

Markets were in for a slightly rough ride this morning, as geopolitical concerns refused to go away, and a rush of earnings released predominated back home.

Ahead of the opening bell, futures for the Dow Jones Industrials dipped 59 points, or 0.4%, to 16,307. Futures for the S&P 500 faded 7.25 points, or 0.4%, to 1,905.75, and futures for the NASDAQ fell 22 points, or 0.6%, to 3,849.75.

Mergers - including one successful deal and a couple of others that evaporated - are dominating the news on Wall Street.

Walgreens said it will acquire Alliance Boots, as expected, for $5.3 billion U.S. Walgreens also said that it's keeping its headquarters in the U.S., which was not expected. The Illinois-based pharmacy chain had been mulling a tax-saving move to Europe. Shares in the company have taken an 11% dive in pre-market trading.

Rupert Murdoch's company 21st Century Fox has given up on pursuing a deal to buy Time Warner. Shares in Time Warner plunged by about 13% in pre-market trading while shares in Fox jumped by about 7%. Time Warner shares surged in July when Murdoch's $80-billion U.S. bid first hit the headlines.

Both media conglomerates report quarterly results Wednesday. Time Warner reported ahead of the opening bell with better than expected earnings. Fox is reporting after the close.

A tie-up between Sprint and T-Mobile US also seems to be off the table, according to the Wall Street Journal. Shares in both companies plunged in premarket trading. That could leave French telecom company Iliad as the frontrunner to buy T-Mobile. Iliad shares were down 4% in Paris.

Apple and Samsung have called a truce on all their non-U.S. patent disputes. Investors may react favorably to this latest development, though the tech giants are still pursuing litigation in the States.

All the major U.S. indices fell during the previous trading session, with much of the drop blamed on renewed concerns about geopolitical tensions with Russia.

European markets were all declining in early trading. Germany's DAX index fell 1.3% on new evidence that the Ukraine crisis is hurting its economy.

German factory orders fell 3.2% in June, against expectations for a small rise. The government blamed "geopolitical developments and risks" for the slump.

Meanwhile, nearly all Asian markets ended the day with losses.

Japan'sNikkei 225 fell 1% Wednesday -- leading the index to a full 3.1% drop over the last five trading days. China stocks were steadier, as they continue to bounce back from first half losses.

Oil prices gained 24 cents to $97.62 U.S. a barrel

Gold prices tallied $5.40 to $1,290.70 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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