CD: TSX heads for higher open amid rising commodities, corporate dealmaking
TORONTO - The Toronto stock market could find some lift from higher oil prices at the open while investors take in some major dealmaking in the tech and resource sectors.
U.S. semiconductor company Microsemi Corp. has made a US$548.7-million hostile takeover offer for Zarlink Semiconductor (TSX:ZL). Microsemi, which is headquartered in Irvine, Calif., said it has tried to launch private talks with Zarlink executives several times, including two written proposals made as recently as a month ago, and all of them were rejected without discussion. Microsemi’s latest offer works out to $3.35 a share, a 40 per cent premium to Tuesday’s closing price.
Chinese oil company CNOOC Ltd. is buying struggling Calgary-based oilsands producer Opti Canada Inc. (TSX:OPC) for $2.1 billion. The announcement comes a week after Opti Canada filed for a court-supervised restructuring designed to transfer ownership of the oilsands developer to creditors. The TSX said it was reviewing the company’s listing and suspended the shares from trading.
And Ensign Energy Services Inc. (TSX:ESI) said it has agreed to acquire the land drilling division of Rowan Companies Inc. for $510 million, plus working capital.
The Canadian dollar was ahead 0.55 of a cent to 105.72 cents US, its highest level since late November, 2009, a day after the Bank of Canada kept its key rate unchanged at one per cent while preparing markets for an increase possibly later this year.
U.S. futures indicated a higher open on hopes for progress in talks to raise the U.S. debt ceiling by Aug. 2 in order to avoid a default and strong earnings from Apple Inc. The Dow Jones industrial futures were up 66 points to 12,573, the Nasdaq futures gained 23 points to 2,412 and the S&P 500 futures climbed 7.75 points to 1,329.
Apple's stock surged nearly six per cent in pre-market trading after the company reported quarterly net income of US$7.31 billion, or $7.79 per share, after the market close Tuesday. That’s more than double the $3.25 billion, or $3.51 per share, a year ago. Analysts polled by FactSet were expecting earnings of $5.82 per share.
Revenue also blew past expectations, coming in at US$28.6 billion, lifted by the sale of 20.3 million iPhones, millions more than analysts had expected.
New York futures were also lifted by an announcement from American Airlines that it is buying at least 460 new planes over the next five years. It will split the order between aerospace giants Boeing and Airbus. The airline expects the new, better-mileage planes will save money on fuel and provide more enticing amenities to passengers.
Markets closed higher Tuesday on hopes that progress is being made in raising the $14.3 trillion debt limit to avoid a default, after President Barack Obama backed a bipartisan plan proposed by six senators.
As well as monitoring developments over the U.S. debt ceiling, investors will be keeping a close watch on any comments over Europe’s debt crisis, a day ahead of a meeting of EU leaders in Brussels.
Hopes of a dramatic move were dashed Tuesday after Chancellor Angela Merkel said the summit wouldn’t yield a quick and comprehensive solution. She said there won’t be anything as "spectacular" as a restructuring of Greek debt.
Oil prices rose to above $98 a barrel after the American Petroleum Institute issued a report showing that U.S. crude supplies dropped a more than expected 5.2 million barrels last week. Analysts had forecast a drop of 1.3 million.
The August crude contract on the New York Mercantile Exchange was ahead $1.06 to US$98.56.
Gold prices backed off record levels for a second day, down $13.10 to US$1,588 an ounce.
The September copper contract on the Nymex dipped two cents to US$4.45 a pound.
Earlier in Asia, Japan’s Nikkei 225 stock average rose 1.2 per cent, South Korea’s Kospi was up 1.2 per cent, Hong Kong’s Hang Seng climbed 0.1 per cent while the Shanghai Composite Index ended the day 0.1 per cent lower.
European markets also advanced with London's FTSE 100 index up one per cent, Frankfurt's DAX gained 0.42 per cent and the Paris CAC 40 was ahead 1.47 per cent.
