News Column

TSX climbs despite foreign tensions

August 8, 2014



Health stocks lead parade





WEEKLY MARKET WRAP UP



The Toronto stock market was substantially higher Friday afternoon as traders hoped for an easing of tensions between Russia and Ukraine.

The S&P/TSX composite index shot up 77.88 points to wind up the day and week at 15,196.31.

The Canadian dollar slipped 0.42 cents at 91.11 cents U.S.

Health-care stocks proved the strongest performers, with Valeant Pharmaceuticals spiking $3.20, or 2.7%, to $119.82.

The energy sector advanced, as Suncor took on 44 cents, or better than 1%, to $44.00, and Imperial Oil gained 60 cents to $54.21.

August copper was unchanged at $3.17 U.S. a pound and the base metals sector was ahead. Teck Resources gained 26 cents, or 1%, to $25.66.

Financials declined as TD Bank slid 35 cents to $55.59, while Royal Bank –dipped 43 cents to $78.96

The TSX gold sector shed early gains as bullion prices dipped. Barrick Gold hurtled skyward 33 cents, or 1.6%, to $20.51, while Goldcorp eased back 10 cents to $30.79.

It has also been a heavy week for Canadian corporate earnings, which have been generally positive.

On Friday, auto parts giant Magna International Inc. says net income rose to $510 million during the quarter, equal to $2.32 per diluted share, up from $415 million, or $1.78 per diluted share, a year ago.

Sales increased 6% to a record $9.46 billion. The company also boosted its sale forecast for the year to a range of $35.6 billion to $37.3 billion from previous guidance of $34.9 billion to $36.6 billion and its shares gained $7.02, or 6.1%, to $122.21.

Engineering consulting and construction firm SNC-Lavalin posted a quarterly profit of $32.1 million or 21 cents a share, down from $37.7 million or 25 cents a year ago. Adjusted earnings were 38 cents a share, well below the 63 cents that analysts had forecast and its shares fell $1.71, or 2.9%, to $56.91.

On the economic slate, Statistics Canada reported that overall employment was unchanged in July, as gains in part-time work were offset by losses in full-time. The agency also said a decline in the number of folks searching for work pushed the unemployment rate down 0.1 percentage points to 7.0%.

ON BAYSTREET

The TSX Venture Exchange gained back 1.77 points to close Friday at 997.42

All but four of the 14 Toronto subgroups were positive, health-care most so, 2.3%, while consumer discretionary issues hiked 2.1%, and energy stocks rocketed 1.7%.

The four laggards were weighed by consumer staples, down 0.7%, while financials and telecoms staggered 0.3% each.

ON WALLSTREET

Despite a raft of geopolitical uncertainty, U.S. stocks were moving markedly higher at the end of a volatile week.

The Dow Jones Industrials zoomed 185.66 points, or 1.1%, to 16,553.93

The S&P 500 gained 22.02 points to 1,931.59. The NASDAQ composite got its mojo back and jumped 35.93 points to 4,370.90. All three indexes ended the week up.

Shares for yoga clothier Lululemon Athletica jumped after founder Dennis Wilson agreed to sell half his stake, of $845 million U.S. in stock, to private equity firm Advent.

Tekmira Pharmaceuticals said Thursday that the U.S. Food and Drug Administration will allow trials of an experimental treatment for the Ebola virus to move forward, a process dubbed "fast tracking". Shares soared 40%.

Zynga shares sank after the maker of games for social media applications reported a loss for its second quarter. Tesla was down slightly despite resolving a trademark dispute that threatened its growth in China.

Sotheby's is among the key companies reporting second quarter earnings before the opening bell. The auction house has been under pressure from Dan Loeb's hedge fund Third Point to boost profits.

The mood on Wall Street remains cautious as investors grapple with multiple crises in Israel, Iraq and Ukraine. Russia announced a round of limited import bans this week in retaliation to U.S. and European sanctions, raising concerns about a possible trade war.

U.S. jet fighters have targeted Sunni Islamic extremists in Iraq, escalating America's military involvement more than two years after U.S. President Barack Obama brought home forces from the country. Concerns are growing about a humanitarian crisis in Iraq where minority groups are facing possible slaughter by Sunni extremists.

Meanwhile, the Israeli military said it carried out strikes on militant targets in Gaza on Friday in response to a barrage of rocket fire after a three-day truce in the region came to an end without a longer-term agreement.

Prices for 10-year U.S. Treasuries lost ground, raising yields back to Thursday's 2.42%. Treasury prices and yields move in opposite directions.

Oil prices gained 66 cents to $97.58 U.S. a barrel.

Gold prices inched up 60 cents at $1,313.10 U.S. an ounce.



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Source: Baystreet Stock Market Update (Canada)


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