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TSX rises as materials show strength, NAL Energy rallies on merger deal

Toronto's main market rose on Friday as materials stocks showed strength as commodity prices were higher.
TSX rises as materials show strength, NAL Energy rallies on merger deal

Toronto's main market rose on Friday as materials stocks showed strength as commodity prices were higher.

The S&P/TSX Composite Index rose 79.08 points, or 0.64%, to 12,440.89, while the more junior S&P/TSX Venture Composite gained 6.91 points, or 0.45%, to 1,547.66.

Gold for April delivery was up 1.4% to $1,664.90 an ounce, while crude oil for May gained $1.9 to $107.29 a barrel.
Silver futures advanced 2.6% to $32.16 an ounce, and the base metal copper contract was bolstered 1.3% to $3.8 a pound.

In Toronto, materials, metals and mining and energy stocks were the three biggest gainers, with financials and industrials posting more modest gains.

Materials stocks were boosted by silver companies, with Silver Wheaton (TSE:SLW) and Silver Standard Resources (TSE:SSO) up 6% and more than 4.7%, respectively.

Gold companies were also strong, with Kinross (TSE:K) rising 1.6%, and Barrick Gold (TSE:ABX) and Goldcorp (TSE:G) higher by 1.7% and 2.7%, respectively. Great Basin Gold (TSE:G) gained more than 6.1%.

In base metals, copper heavyweight Teck Resources (TSE:TCK.B) advanced nearly 0.7% on the copper price.

Among energy, Suncor Energy (TSE:SU), Talisman Energy (TSE:TLM) and Canacol Energy (TSE:CNE) all rose between 1 and just over 2%, while Canadian Natural Resources (TSE:CNQ) edged down by 0.36%.

Financials were up by 0.26% as Toronto-Dominion Bank (TSE:TD) and Bank of Nova Scotia (TSE:BNS) rose 0.56% and 0.68%, respectively, while Manulife Financial (TSE:MFC) fell lower by 0.22%.

Industrials were boosted as Bombardier (TSE:BBD.B) advanced 2.6%.

In corporate news, Canadian oil and gas producer Pengrowth Energy Corp (TSE:PGF)(NYSE:PGH) said Friday that it will buy NAL Energy Corp (TSE:NAE) in a deal valued at about $1.9 billion, including debt, to add light oil assets.

NAL stockholders will receive 0.86 of a Pengrowth share for each share held, owning 26 percent of the combined company after the deal closes. Based on March 22 closing prices of Pengrowth and NAL, the exchange ratio reflects a premium of 9.7 percent for NAL shareholders.

NAL Energy rallied more than 6.5%, while Pengrowth lost 1.9%.

Northstar Aerospace (TSE:NAS) said Friday that due to current financial difficulties, the company will not file its audited finanical statements for the 2011 year by the deadline of March 30, as originally planned.

Open Range Energy (TSE:ONR) said Friday it fell to a net loss during its fourth-quarter, despite reporting an increase in revenues and production.

In economic news, Statistics Canada reported that the country's inflation rate rose to 2.6% in February. Stripping out volatile food and energy items, the rate still rose 2.3% - above the Bank of Canada's target.


US equities were mixed Friday after a disappointing report on new homes sales last month, following a week of lacklustre housing reports and slower growth indications in China and Europe.

The Dow was lately up 0.2%, while the Nasdaq fell 0.2% and the S&P 500 rose 0.16%.
New home sales for February came in at an annual rate of 313,000, below the 323,000 forecast by analysts, and down from a rate of 321,000 in January.

Several reports earlier this week on existing home sales and new home construction also disappointed.
In corporate news, KB Home (NYSE:KBH) said Friday it narrowed its first quarter loss as revenues increased, but the fifth-largest U.S. homebuilder still missed Street estimates as net orders for new homes slumped and cancellations increased.

Net orders declined eight percent during the quarter, to 1,197, as a 22 percent rise in orders in the Central region were offset by declines in the company's other three regions. KB Home said its cancellation rate increased to 36 percent from 29 percent a year earlier.

The company's shares fell 4.8%, and Lennar Corp (TSE:LEN) and D.R. Horton (TSE:DHI) shed as well.

Darden Restaurants (NYSE:DRI), the world's largest full-service restaurant company, said Friday that third-quarter earnings grew thanks to a rise in comparable sales at its Olive Garden chain.

For the quarter that ended February 26, earnings increased to $164.1 million, or $1.25 per share, from $151.7 million, or $1.08 per share, a year earlier. Sales increased to $2.16 billion from $1.98 billion last year.

Analysts expected the operator of the Olive Garden and Red Lobster franchises to earn $1.24 per share on revenue of $2.15 billion, according to FactSet Research.

BATS Global Markets late Thursday priced its IPO at $16 per share, raising $101 million for the stock exchange operator and giving it a market value of $760 million.

Bank of America (NYSE:BAC) announced a pilot program that will allow delinquent homeowners to relinquish the deed to their property and transition to tenant status, providing potential relief for homeowners facing foreclosure. Only 1,000 homeowners are eligible for the program.

Sports apparel maker Nike (NYSE:NKE) posted fiscal third-quarter earnings that beat expectations as it saw strong sales from North America, its major market.

For the fiscal third quarter that ended February 29, the company said that earnings were $560 million, or $1.20 per share, compared with $523 million, or $1.08 per share last year.

Analysts, on average, were expecting earnings of $1.17 per share, according to Thomson Reuters.

Shares in Britain were lower today as the FTSE 100 fell 0.73%. The German and French stock markets are closed.

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October 16 2015

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