BOC maintains rates
Apr. 20, 2010 (Baystreet.ca) --
Canadian stocks opened higher Tuesday amid a recovery in the commodities prices and on the just released interest-rate decision by the Bank of Canada. The S&P/TSX Composite Index ended the day ahead 44.85 points to 12,147.82 Today, the central bank announced that it is maintaining its target for the overnight rate at a record low of 0.25%. The bank rate was left unchanged at 0.5% and the deposit rate at 0.25%. The bank now projects that the economy will grow by 3.7% in 2010 before slowing to 3.1% in 2011 and 1.9% in 2012. Financial stocks may be in play following encouraging quarterly earnings reports by major banks from south of the border. In corporate news from Canada, book retailer Indigo Books & Music announced a 10% increase in the company's quarterly dividend, raising it from $0.10 to $0.11 per common share, equating an annual dividend of $0.44 per share, up from $0.40 in 2009. IMAX Corp. announced a new joint venture agreement with Tokyu Recreation to install five digital IMAX theater systems in Japan. Communication and media company Rogers Communications and drug retailer Shoppers Drug Mart announced a pilot project in which Rogers and Fido wireless products will be sold in more than 30 Shoppers Drug Mart stores in a key regional area. Insurance company Kingsway Financial Services said it added 3.9% of stake in Kingsway Linked Return of Capital Trust taking its total stake to about 26.72% Wood pulp maker Tembec announced that its European subsidiary, Tembec SAS has signed a share purchase agreement with Paper Excellence B.V for the acquisition of 100% of the shares of Tembec Saint-Gaudens SAS and Tembec Tarascon SAS. Tembec will record a gain of about $23 million in its financial results for the quarter ending June 2010. Oil and gas company Provident Energy Trust said it will combine its upstream business with Midnight Oil Exploration in a $460 million transaction. The Canadian dollar climbed back to near-parity with its American cousin, adding 1.42 cents to 99.98 cents U.S. ON BAYSTREET Of the 14 TSX subgroups, nine were higher in the first half-hour of trading. Metals and mining topped the list, gaining 1.3%, while energy tacked on 0.8% and materials gained 0.6%. The five laggards were weighed by information technology, off 0.7%, health-care, down 0.4%, and real-estate, easing back 0.3%. The TSX Venture Exchange picked up 6.01 points to 1,659.97, while the Nasdaq Canada index advanced 6.95 points to 791.12. ON WALLSTREET In New York, stocks opened higher Tuesday after a strong earnings report from Goldman Sachs. The Dow Jones industrial average strengthened 25.69 points soon after the opening bell to 11,117.74. The S&P 500 index gained 6.17 points to 1,203.69. The Nasdaq composite index moved up 10.97 points to 2,491.08. Stocks ended mostly higher Monday after a choppy trading day as optimism over Citigroup's strong profit report was offset by worries over the fallout from the SEC's fraud suit against Goldman Sachs. Shares of Goldman Sachs rose 2% in premarket trading after the bank reported profits of $3.5 billion U.S. Tuesday, delivering a much-needed shot to the firm's ailing reputation as it faces questions over its role in structuring a security tied to subprime mortgages. On a per-share basis, Goldman earned $5.59 U.S. per share. Consensus estimates were for the company to record a profit of $2.4 billion U.S., or $4.01 U.S. per share, according to Thomson Reuters. But investors and analysts will most likely focus on the civil fraud suit brought against by the company last week by the Securities and Exchange Commission. Goldman is scheduled to hold a conference call to discuss the SEC charges and its first-quarter results later Tuesday. IBM reported a 13% jump in quarterly earnings late Monday and boosted its outlook for the rest of the year, citing strong software sales. IBM shares, which rose Monday ahead of the report, slipped nearly 2% in premarket trading. Apple and Yahoo are due to report their latest financial results after U.S. markets close. The fraud suit has weighed on Wall Street, although reports saying regulators were split on the decision to bring charges against Goldman helped lift investor sentiment. Prices for U.S. Treasurys inched up, with the yield on the 10-year note easing to 3.80% from Monday's 3.81%. Bond prices and yields move in opposite directions The price of a barrel of oil gained 90 cents to $82.36 U.S. Gold prices marched ahead seven dollars to $1,143 U.S. an ounce.
