News Column

Flat start for Toronto markets

August 7, 2014



BCE, Air Canada in focus







Markets in Toronto drooped lower at the open Thursday, amid developments in the upper echelons of European banks and earnings news at home.

The S&P/TSX composite index fell 15.63 points to open at 15,186.46.

The Canadian dollar gained 0.02 cents at 91.63 cents U.S.

Canadian Natural Resources reported a higher-than-expected quarterly profit, helped by a jump in product sales and an increase in prices across the board. Natural Resources shares skidded 67 cents to $45.17.

BCE posted a 6% increase in second-quarter profit, driven by higher advertising and subscriber fee revenue from its acquisition of TV and radio content producer Astral Media. BCE shares faded 24 cents to $48.64.

Manulife Financial said its second-quarter profit more than tripled due to a stronger performance by investments and other market-related factors, and Canada's biggest life insurer raised its dividend for the first time since 2009. Manulife shares gained 15 cents to $22.12.

Air Canada posted a quarterly profit compared with a year-earlier loss, helped by a $41-million tax gain and strong performance at its low-cost carrier, Rouge. The Maple Leaf airline saw its shares descend 33 cents to $8.93.

Canaccord Genuity raised the rating on Cineplex to buy from hold. Cineplex gained 33 cents a share to $40.12.

On the economic front, Statistics Canada reported this morning that contractors took out building permits worth $8.0 billion in June, up 13.5% from May. The June hike was mainly due to higher construction intentions for institutional and industrial buildings in Quebec and commercial buildings in Alberta.

Moreover, Western University's Ivey Purchasing Managers Index (PMI) by the end of July 2014 stood at 54.1, compared to 46.9 in June, and 48.4 in July 2013.

ON BAYSTREET

The TSX Venture Exchange regained 0.87 points to 992.61

Seven of the 14 Toronto subgroups were down to start the day, with gold trailing 0.7%, materials down 0.4%, and consumer staples 0.3% to the bad.

The half-dozen gainers were led by health-care, up 2.1%, consumer discretionaries, up 0.8%, and industrial stocks gaining 0.2%. Information technology stocks were flat in the first trading hour.

ON WALLSTREET

Stocks finally had a nice start in an otherwise dour week in the markets.

The Dow Jones Industrials began the day higher by 42.95 points to 16,486.29

The S&P 500 added 5.97 points to 1,926.21. The NASDAQ composite gained 20.16 points to 4,375.21.

Jack in the Box and Wendy's both reported their quarterly earnings, and the results are mixed. Jack in the Box, up 9.5%, surpassed expectations for revenue and earnings.

Wendy's, on the other hand, is about 2% higher after its results showed that sales were good but profits weren't quite what Wall Street wanted. Both companies reported same-store sales growth, a sign that more people are coming into their stores.

Shareholders are happy that Twenty-First Century Fox has squashed any squishiness about its abandoned its pursuit Time Warner. Fox shares are 7% higher today, which is on top of the gains it registered when it first said it withdrew its $80-billion U.S. bid. Time Warner shares are flat.

Things are calm in Europe, where the European Central Bank left interest rates unchanged and reiterating its commitment to "do whatever it takes" to keep Europe's economy stable (though it came short of announcing new asset purchases). The Bank of England also left rates alone.

Prices for 10-year U.S. Treasuries gained ground, lowering yields to 2.46% from Wednesday's 2.47%. Treasury prices and yields move in opposite directions.

Oil prices gained eight cents to $97.00 U.S. a barrel.

Gold prices eased $3.10 to $1,305.10 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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