Toronto stock market shifts lower on profit taking after surge last week

The Toronto Stock Exchange (TSX)'s name is shown on the facade of its former home on Bay Street in Toronto. THE CANADIAN PRESS/Chris Young

TORONTO - The Toronto stock market was lower near midday as enthusiastic gains last week led to some profit taking on Monday.

The S&P/TSX composite index moved down 16.39 points to 12,483.08 while the TSX Venture Exchange was up 2.64 points to 1,320.75.

The Canadian dollar backed off 0.05 of a cent to 102.92 cents US.

On Wall Street, the Dow Jones industrials were down 22.27 points to 13,571.10, the Nasdaq composite index backed off 8.02 points to 3,175.93, while the S&P 500 index slid 2.43 points to 1,463.34.

"We've had such a big move in such a short period of time ... so I'd say a little bit of profit taking is to be expected," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"If anything, it's quite minor to me."

Traders backed away from some of their enthusiasm over the Federal Reserve's plan for new measures to energize the U.S. economy, while attention turned to weakness in Asian markets, and a move from Hong Kong to tighten mortgage lending — an effort to help slow the rise of home prices.

Sentiment on the Canadian housing market also pulled back as the Canadian Real Estate Association cut its forecast for home sales this year and next and lowered its national average price forecast, partly due to revised mortgage lending regulations implemented last month.

In its outlook for the year, CREA said Monday that home sales are now forecast to rise by 1.9 per cent to 466,900 units in 2012, but slip by 1.9 per cent to 457,800 units in 2013.

The national average home price is forecast to rise by just 0.6 per cent to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013.

Shares of Rona Inc. (TSX:RON) were down nearly eight per cent after Lowe Companies (NYSE:LOW) said it is no longer trying to buy the company. The controversial plan would have seen Canada's largest home-improvement retail chain acquired for about $1.8 billion. Rona shares backed off $1.01 to $11.76.

TSX information technology stocks were 1.2 per cent lower with Research In Motion (TSX:RIM) shares falling 3.3 per cent, or 24 cents, to $7.10.

The decline came as Apple says iPhone 5 preorders topped 2 million in 24 hours, more than double the amount of iPhone 4S preorders.

In commodities, the October crude contract on the New York Mercantile Exchange rose 23 cents to US$99.23.

Copper prices for December were down 3.5 cents to US$3.80 a pound. Copper, viewed as an economic barometer because it is used in so many industries, surged 19 cents last week.

Bullion was down 40 cents at US$1,772.30 an ounce.

Global stock markets rallied late last week after the Fed announced it planned to buy US$40 billion of mortgage bonds a month for as long as necessary as part of a strategy known as quantitative easing aimed at encouraging people to borrow money and spend it. The Fed also extended its pledge to keep short-term interest rates low until 2015, a year longer than its previous target.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/toronto+stock+market+shifts+lower+on+profit+taking+after+surge+last+week/6442716375/story.html
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Porter Airlines signs interline agreement with South African Airways

TORONTO - Porter Airlines has signed a deal with South African Airways that will allow passengers easier connections between the Toronto-based regional airline's destinations and Africa.

The deal follows an agreement earlier this year with Qatar Airways that allows customers travelling from the Middle Eastern country to connect seamlessly to Canadian destinations.

The new interline agreement with SAA opens up connections for passengers between Canada and Africa through Porter Airlines' base at Billy Bishop Toronto City Airport and SAA's hub in Johannesburg, South Africa, via Washington.

Travellers who book interline tickets with SAA and Porter will be able to check their baggage through to their final destination.

Interline deals often pave the way for code-share partnerships, which involve a higher level of integration between two airlines.

In code-shares, flights operated by two or more different airlines will all carry the same two-digit code.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/porter+airlines+signs+interline+agreement+with+south+african+airways/6442716512/story.html
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Kingsway to cut staff, streamline management in two insurance segments

TORONTO - Kingsway Financial Services Inc. (TSX:KFS), which insures high-risk drivers, is cutting staff and streamlining its management structure as it re-aligns its Insurance Services and Insurance Underwriting segments.

The company didn't say how many jobs will be cut, but said Monday it expects to incur about $2 million or 15 cents per share in cash severance expenses over the next nine months and $1.3 million or 10 cents per share to abandon leased space at two subsidiaries, Mendota Insurance and Universal Casualty.

It will also post $11.4 million or 87 cents per share in additional unpaid loss and loss adjustment expenses as part of the underwriting restructuring. Kingsway's Amigo Insurance subsidiary accounted for $9.4 million of the loss and the remaining $2 million was at its Mendota and Mendakota subsidiaries.

The company said its non-standard property and casualty business operations will be under one management team, led by its current chief financial officer and chief operating officer, William Hickey.

The insurance services segment will be led by Bradley Diericx, who joined Kingsway on Monday. He was previously Johnson Lambert LLP, GE Reinsurance and Insurance Corp. of Hannover.

"These restructuring changes are intended to create a new leadership team from within the company's ranks, bring additional talent into the organization, grow the insurance services side of the business, and create the foundation for returning our insurance underwriting operations to profitability" said Larry G. Swets, Jr., Kingsway's president and chief executive officer.

Kingsway's stock gained two cents to $1.76.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/kingsway+to+cut+staff+streamline+management+in+two+insurance+segments/6442716511/story.html
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Rona earns breathing room after U.S. rival Lowe's withdraws takeover plans

A man carries building supplies from a Rona store in Toronto on July 31, 2012. The Lowe's home improvement chain is retreating from its controversial plan to buy Rona. THE CANADIAN PRESS/Nathan Denette

MONTREAL - Rona Inc. has some breathing room to build its Canadian home-improvement chain now that U.S. rival Lowe's has abandoned its controversial plan to acquire the Quebec-based chain for about $1.8 billion.

But Rona's continued independence will come at a cost to its investors, with its shares dropping more than 10 per cent following the announcement that Lowe's is no longer contemplating an offer of $14.50 per share cash.

Rona stock dropped $1.37 to $11.40 in early trading Monday on the Toronto Stock Exchange, following the pre-open announcement from Lowe's Companies Inc. Lowe's shares (NYSE:LOW) slipped three cents to US$29.37 in New York.

The U.S. chain's withdrawal Monday comes seven weeks after Rona, the Quebec government and others objected to the U.S. company's overtures, which had begun privately in late 2011 and became public in late July.

"Lowe's continues to believe that a combination of Lowe's and Rona makes business sense and would create significant value for all stakeholders," Lowe's said in a statement early Monday.

"It is unfortunate that the Rona Board of Directors did not recognize the important economic and commercial benefits of this proposal for its stakeholders and for Canada," the statement said.

"Lowe's remains committed to the Canadian market and will continue delivering outstanding home improvement products and services to its Canadian customers."

Irene Nattel of RBC Capital Markets said the move by Lowe's gives Rona some breathing room but said the U.S. retailer could return with a bid in the future.

"Given a slowing Canadian housing market and outlook for sluggish consumer spending, we expect Rona'ss results — notably top line — to remain pressured and we would therefore expect a certain level of shareholder support for a transaction, at an appropriate price," she wrote in a report.

Lowe's (NYSE:LOW) has a relatively small presence in Canada, although it is the second-largest home improvement retailer in the United States, after Home Depot (NYSE:HD).

Only 31 of Lowe's stores are in Canada, out of 1,745 across North America.

Rona (TSX:RON) has by far the largest number of company and affiliate-owned home-improvement locations in Canada under its banner, with Home Depot a distant second.

Rona has more than 30,000 employees operating a network of nearly 800 stores under several banners as well as 14 hardware and construction distribution centres. Home Depot currently has 180 stores across Canada.

North Carolina-based Lowe's had informally offered C$14.50 per share in cash but there was little enthusiasm for the proposal, even among analysts that cover the company.

They have said Lowe's would be better to improve its performance in the U.S. market, which is showing signs of revival as home-building and home sales finally begin to recover from about five years of depressed activity.

Robin Diedrich of Edward Jones said Lowe's will now be able to focus on improving its core U.S. business without the distraction of a potentially difficult hostile takeover transaction.

"I think it's a smart move. They said they were going to pursue it so I'm a little surprised they withdrew so quickly but I think it's probably for the best just given the fact that it looked like it was going to be a real uphill battle," she said in an interview from Chicago.

Diedrich said Lowe's will now revert to its original plan to expand in Canada organically by slowly opening stores. The challenge is there aren't many good locations available, she said.

The U.S. company also faced a political battle in Rona's home market of Quebec, which has undergone an election that resulted in the separatist Parti Quebecois party coming to power as a minority government.

The Quebec Liberals, a federalist party that was defeated in the Sept. 4 election, had already said clearly that they opposed a foreign takeover of Rona and a PQ government would likely be even less in favour of Lowe's buying Rona.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/rona+earns+breathing+room+after+us+rival+lowes+withdraws+takeover+plans/6442716332/story.html
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Toronto stock market shifts lower as traders pull back on enthusiasm over Fed

The Toronto Stock Exchange (TSX)'s name is shown on the facade of its former home on Bay Street in Toronto. THE CANADIAN PRESS/Chris Young

TORONTO - The Toronto stock market started the week lower as traders backed away from some of their enthusiasm over the Federal Reserve's plan for new measures to energize the U.S. economy.

The S&P/TSX composite index moved down 29.11 points to 12,470.36 while the TSX Venture Exchange was up 2.69 points to 1,320.80.

The Canadian dollar backed off 0.2 of a cent to 102.95 cents US.

Sentiment over the Fed's decision last week appeared to subside as attention turned to weakness in Asian markets, and a move from Hong Kong to tighten mortgage lending — an effort to help slow the rise of home prices.

Elsewhere, shares of Rona Inc. (TSX:RON) were down 11 per cent after Lowe Companies (NYSE:LOW) said it is no longer trying to buy the company. The controversial plan would have seen Canada's largest home-improvement retail chain acquired for about $1.8 billion. Rona shares backed off $1.42 to $11.35.

TSX information technology stocks were off 0.9 per cent with Research In Motion (TSX:RIM) shares falling three per cent, or 22 cents, to $7.12.

The decline came as Apple says iPhone 5 preorders topped 2 million in 24 hours, more than double the amount of iPhone 4S preorders.

In commodities, the October crude contract on the New York Mercantile Exchange rose 27 cents to US$99.27.

Copper prices for December were down three cents to US$3.81 a pound. Copper, viewed as an economic barometer because it is used in so many industries, surged 19 cents last week.

Bullion was up $2.10 at US$1,774.80 an ounce.

On Wall Street, the Dow Jones industrials were down 21.89 points to 13,571.48, the Nasdaq composite index backed off 10.81 points to 3,173.14, while the S&P 500 index slid 3.37 points to 1,462.40.

Global stock markets rallied late last week after the Fed announced it planned to buy US$40 billion of mortgage bonds a month for as long as necessary as part of a strategy known as quantitative easing aimed at encouraging people to borrow money and spend it. The Fed also extended its pledge to keep short-term interest rates low until 2015, a year longer than its previous target.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/toronto+stock+market+shifts+lower+as+traders+pull+back+on+enthusiasm+over+fed/6442716375/story.html
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Canadian Real Estate Association cuts home sales forecast for this year and next

For sale signs stand in front of a condominium, September 27, 2011 in Montreal. THE CANADIAN PRESS/Ryan Remiorz

OTTAWA - The Canadian Real Estate Association is cutting its forecast for Canadian home sales this year and next.

The industry group is also lowering its national average price forecast.

The group says the change follows a tightening of mortgage lending regulations by the federal government.

Sales in August slipped 5.8 per cent compared with July and were down 8.9 per cent compared with August a year ago.

The month-over-month change was the largest decline since June 2010.

Sales of previously owned Canadian houses and condos have now gone down in five of the past six months.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/canadian+real+estate+association+cuts+home+sales+forecast+for+this+year+and+next/6442716415/story.html
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Foreign interest in Canadian securities bounces back in July: Statscan

Employees make their way to work at Statistics Canada in Ottawa on July 21, 2010. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA - Statistics Canada says foreign interest in Canadian securities bounced back in July, with non-resident investors buying $6.7 billion of equity and debt.

The spending follows a large divestment of $7.8 billion in June.

StatsCan says Canadian investment in securities abroad was also up in July, strengthening slightly to $4.6 billion — split evenly between stocks and bonds.

On the foreign side of the ledger, non-resident investors bought $6.1 billion of Canadian bonds, on par with monthly averages since January.

They also added $4.7 billion to their Canadian equities holdings, the largest investment since February 2011, driven by cross-border mergers and acquisitions.

However, foreigners reduced their Canadian money-market holdings by $4.1 billion in July.

Canadians boosted their foreign debt investments by $2.3 billion, mostly drawn to U.S. government debt.

The purchasing was moderated by large-scale shedding of foreign bonds denominated in Canadian dollars.

For the year to date, foreigners have invested $41.2 billion in Canadian securities, down from $54.3 billion a year earlier.

Canadians have invested $13.8 billion in foreign debt and equity so far this year, almost double the $7.1 billion they had spent by this time last year.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/foreign+interest+in+canadian+securities+bounces+back+in+july+statscan/6442716395/story.html
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Apple says iPhone 5 preorders topped 2M in 24 hours; says demand exceeds initial supply

In this Wednesday, Oct. 19, 2011, file photo, a line of customers enter an Apple store in Scottsdale, Ariz. THE CANADIAN PRESS/AP, Matt York

CUPERTINO, Calif. - Apple says iPhone 5 preorders topped 2 million in 24 hours, more than double the amount of iPhone 4S preorders.

The company also says that while most preorders will be delivered on Friday, demand for the iPhone 5 exceeds the initial supply, so some of the devices are scheduled for delivery in October.

The iPhone 5 has a bigger screen — 4 inches (10.16 centimetres) measured diagonally — that creates room for another row of icons and lets widescreen movies fit better. The calendar will now show five days at a time instead of just three. Previous iPhone models carried 3.5-inch (8.89-centimetre) screens.

Earlier Monday AT&T Inc. said it set a sales record for the iPhone 5, with customers ordering more of them than any previous iPhone model on the first day of preorders and over the weekend.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/apple+says+iphone+5+preorders+topped+2m+in+24+hours+says+demand+exceeds+initial+supply/6442716410/story.html
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Loonie moves lower as initial reaction from last week's US Fed move settles

Canadian dollars (loonies) fall through the air in a photo illustration in Vancouver, B.C. Thursday, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

TORONTO - The Canadian dollar was lower in early trading on Monday as enthusiasm faded over the unveiling of a third round of economic stimulus by the U.S. Federal Reserve last week.

The loonie was off 0.12 of a cent to 102.85 cents US in the morning.

Meanwhile, a meeting of the 17 eurozone finance ministers over the weekend showed it will take months of negotiations and preparation to set up a new European banking union.

Eurozone countries are, among other things, divided over how many banks should be supervised by a new authority with the ability to bail out the lenders directly.

Creating a European banking union is important to ease concerns that bank failures might bring down the government finances of financially weak states such as Spain or Italy.

In commodities, the October crude contract on the New York Mercantile Exchange fell 28 cents to US$98.72.

Copper prices for December were down three cents to US$3.81 a pound. Copper, viewed as an economic barometer because it is used in so many industries, surged 19 cents last week.

Bullion was unchanged at US$1,772.70 an ounce.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/loonie+moves+lower+as+initial+reaction+from+last+weeks+us+fed+move+settles/6442716408/story.html
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Oil holds near $99 a barrel in Europe, largely holding gains after Fed moves to boost economy

A gas flame burns behind oil field workers, May 30, 2011, in the desert oil fields of Sakhir, Bahrain. THE CANADIAN PRESS/AP, Hasan Jamali

Oil traded near $99 a barrel Monday, largely holding on to gains after the Federal Reserve last week announced new steps to boost the U.S. economy.

By early afternoon in Europe, benchmark crude for October delivery was down 23 cents at $98.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Friday traded above $100 for the first time since May before closing up 69 cents at $99 in New York.

In London, Brent crude was down 27 cents at $116.39 on the ICE Futures exchange.

The dollar remained near a four-month low versus the euro as investors bet that the Fed's plan to keep interest rates low and spend billions buying securities would keep downward pressure on the U.S. currency. Commodities such as oil are traded in dollars and become cheaper for investors holding other currencies when the dollar weakens. On Monday, the euro was down slightly at $1.3110 from $1.3128 on Friday.

Anti-American unrest in the oil-rich Middle East, which was sparked by a film that is seen as ridiculing the Prophet Muhammad, also provided a floor for energy prices.

The U.S. Ambassador to Libya was killed during an attack on the consulate in Benghazi last week; protesters have also stormed the U.S. Embassy in Tunis and held violent demonstrations outside posts in Egypt and Sudan. The U.S. has responded by deploying additional military forces to increase security in certain hotspots.

"Although we see growing risks of speculative overheating on the oil market, the price climb is likely to continue given the phases of exaggerated price rises we saw following previous rounds of quantitative easing," said analysts at Commerzbank in Frankfurt. "In the current environment of healthy risk appetite, news of a possible escalation of the situation in the Middle East would fall on fertile soil and be more likely than before to result in an accelerated price increase."

In other Nymex energy futures trading, wholesale gasoline was down 0.84 cent at $2.9231 a gallon while heating oil was up 0.05 cent at $3.24 a gallon. Natural gas added 0.5 cent to $2.948 per 1,000 cubic feet.

© The Canadian Press, 2012

17 Sep, 2012

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Source: http://www.globalnews.ca/Money/oil+holds+near+99+a+barrel+in+europe+largely+holding+gains+after+fed+moves+to+boost+economy/6442716280/story.html
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