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TMCNet:  Stocks flat on eve of Fed word

[December 17, 2013]

Stocks flat on eve of Fed word

(Baystreet Stock Market Update (Canada) Via Acquire Media NewsEdge) Constellation, BlackBerry in spotlight The Toronto stock market was slightly lower Tuesday as traders hoped that a two-day U.S. Federal Reserve meeting will end uncertainty over what the central bank may decide to do about cutting back on a key stimulus program.


The S&P/TSX composite index slumped 4.32 points to end Tuesday at 13,180.09 The Canadian dollar dipped 0.14 cents to 94.25 cents U.S.

Gains on the Toronto market were led by a gain in the tech sector.

Constellation Software rose $11.43 or 5.5% to $218.12, adding to Monday's 5.2% rise after it said it will pay the equivalent of about $350 million to acquire Dutch software company Total Specific Solutions (TSS) BV.

BlackBerry fell eight cents to $6.47 three days before the smartphone maker posts earnings.

Auto parts companies helped push the consumer discretionary segment up with Martinrea International ahead 33 cents to $9.32 while Magna International climbed 90 cents to $84.56.

Resource stocks fell alongside commodity prices.

The gold sector faded as Kinross Gold was unchanged at $4.88.

The base metals sector was down with March copper down one cent at $3.32 U.S. a pound. HudBay Minerals eased 11 cents to $7.60.

In corporate news, Saputo Inc. says it's willing to pay substantially more for Australia's Warrnambool Cheese and Butter if it can get as much as 90% of its stock. The company is maintaining its base offer at AU$9 per share but says it will pay as much as AU$9.60 cash per share if it gets at least 90 per cent of WCB's stock. That would value the deal at C$510 million. Saputo shares rose 68 cents to $47.85.

Hudson's Bay Co.'s chief operating officer, Donald Watros, will become the retailing company's president in February. Watros is a former chief administrative officer of Saks Fifth Avenue, which HBC acquired in November for about $2.9 billion. HBC shares were up 45 cents to $18.75.

Canada Bread Co. Ltd. is paying a special dividend of $8 per share. The bakery, which is 90% owned by Maple Leaf Foods Inc. said the payment will be made on Jan. 6 to shareholders of record on Dec. 30. Its shares ran up $1.04 to $74.97.

On the economic calendar, Statistics Canada reported this morning that manufacturing sales increased 1.0% in October over the month before, contrary to projections of a 0.3% loss. The agency says sales thus reached their highest level since May of last year.

ON BAYSTREET The TSX Venture Exchange dipped 4.59 points to 886.07 Eight of the 14 TSX subgroups were higher on the day, led by information technology issues, up 1.6%, while consumer discretionary stocks gained 0.6% and consumer staples took on 0.5%.

The half-dozen laggards were off on the shoulders of health-care, sliding 0.5%, energy, down 0.4%, and industrials, negative by 0.3%.

ON WALLSTREET Markets were mostly unchanged Tuesday afternoon, as investors were still trying to guess what the Federal Reserve has in store after its key policy meeting wraps up on Wednesday.

The Dow Jones Industrials dropped 9.31 points by the closing bell to 15,875.26 The S&P 500 index reversed 5.54 points to 1,781. The NASDAQ gave back 5.84 points to 4,023.68 Car maker Tesla popped over 4% after it unveiled a Chinese website. Shares of the luxury electric automaker have quietly staged a comeback this month after a rough November and December.

Facebook reached a new all-time high after the social network said it is rolling out a feature that will allow advertisers to play videos in users' news feeds.

Shares of iRobot soared 16% after an analyst from Raymond James upgraded the company to a "strong buy." The favourable rating came on the heels of Google's purchase of robotics company Boston Dynamics.

Herbalife was up over 2% after surging nearly 10% Monday when investors got word that PricewaterhouseCoopers' re-audits of the company's financial results came back clean. Herbalife has been battling accusations of financial wrongdoing from activist investor Bill Ackman, who has repeatedly called it a pyramid scheme and has a big short bet against the stock.

Boeing also got a bump after the aerospace giant announced a 50% dividend increase and $10-billion U.S. stock buyback program.

Investors are eager to find out when the Fed might begin to cut back its massive stimulus program. Some think the so-called taper may come sooner than expected.

One economist is predicting that the Fed will announce plans on Wednesday to cut back its monthly bond buying by anywhere from $5 billion to $15 billion U.S. from its current pace of $85 billion U.S. a month.

Prices for 10-year U.S. Treasuries inched ahead, lowering yields to 2.84% from Monday's 2.88%. Treasury prices and yields move in opposite directions.

Oil prices moved down 40 cents to $97.08 U.S. a barrel.

Gold prices skidded $13.50 to $1,231.20 U.S. an ounce.

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