IP: Toronto stock market headed for higher open on strong GDP data
TORONTO – The Toronto stock market appeared headed for a higher open Monday as economic data showed economic growth in the first quarter was largely in line with expectations.
Real gross domestic product grew at an annualized rate of 3.9 per cent in the first quarter, after expanding 3.1 in the fourth quarter of 2010. Economists had been expected to grow by four per cent during the quarter. It grew by 0.3 per cent in March, a tick above consensus.
“Glancing at the details, consumer’s nearly stalled, after a solid quarter earlier performance,” CIBC World Markets wrote in a note.
“Offsetting that, business capital spending showed solid momentum, advancing by about 10 per cent in annualized terms with housing posing a modest increase after a decline in the preceding quarter.”
The Canadian dollar lost 0.11 of a cent to $102.35 cents US.
The loonie could be under additional pressure on commodity markets this week after the Bank of Canada delivers its next announcement on interest rates on Tuesday.
The market’s direction will be little influenced by events in the U.S., as markets are shut for the Memorial Day holiday. Dow futures were up 23 points to 12,451, Nasdaq futures rose 0.75 of a point to 2,333.25 and S&P
futures were up 1.6 points to 1,331.5.
Oil prices fell 48 cents to US$100.11 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, security forces killed anti-government protesters in Syria and Yemen, the latest instances of political violence that has swept the oil-rich region this year.
The June gold contract rose 90 cents to US$1,537.20 an ounce while the July copper contract fell three cents to $4.16 a pound.
Uranium stocks could be under pressure after Germany’s environment minister said Chancellor Angela Merkel’s coalition government has agreed to shut down all of the country’s nuclear power plants by 2022.
In corporate news, Fortis Inc. (TSX:FTS) is acquiring a Vermont-based integrated electric utility company for US$700 million, giving the Newfoundland-based company its first entry into the U.S. regulated power industry.
The St. John’s, N.L.-based company says it will pay US$35.10 per share in cash for Central Vermont Public Service Corp. (NYSE:CV), in a transaction that includes the assumption of about US$230 million in debt.
Asian markets were largely inert and European shares posted muted gains in early trading. Germany’s DAX was 0.4 per cent higher to 7,190.4 and France’s CAC-40 rose 0.1 per cent to 3,955.97. Markets in Britain are closed for a holiday.
