TORONTO – The Toronto stock market closed higher Wednesday, with support coming from a big acquisition by energy company Encana and positive earnings news.
The S&P/TSX composite index rose 44.11 points to 14,656.4.
The Canadian dollar was down 0.13 of a cent to 91.79 cents US.
Encana Corp. (TSX:ECA) shares were up $1.13, or 4.6 per cent, to $25.69 after it announced a deal to roughly double its oil production with a $3.1-billion acquisition of oil-producing properties in the Eagle Ford shale formation in south Texas from Freeport-McMoRan.
Meanwhile, U.S. markets were uneven amid testimony from Federal Reserve chairwoman Janet Yellen that the American economy is improving but that the job market remained “far from satisfactory” and inflation below the Fed’s target rate.
The Dow Jones industrials ran up 117.52 points to 16,518.54, the Nasdaq lost 13.09 points to 4,067.67 and the S&P 500 index was ahead 10.49 points at 1,878.21.
Yellen told Congress’ joint economic committee that she expects low borrowing rates will continue to be needed for a “considerable time.”
At the same time, Yellen said geopolitical tensions, a renewal of financial stress in emerging markets and a faltering housing recovery are potential threats.
It was another heavy day for earnings as Tim Hortons Inc. (TSX:THI) earned $90.9 million or 66 cents per share, up from $86.2 million or 56 cents per share a year ago but missed estimates of 68 cents and its shares dipped 79 cents to $58.89.
“Overall things at Tim Hortons are performing well,” said Allan Small, senior adviser at HollisWealth.
“They are growing but I don’t think fast enough for the market, fast enough for investors and I think their stock price reflects that. It’s been hovering around $59, $60 for some time and I think it will take a lot to move the needle.”
Talisman Energy (TSX:TLM) shares climbed 91 cents or eight per cent to $12.02 as quarterly net income was $491 million, or 47 cents per share, compared with a net loss of $213 million or 21 cents per share in the first quarter last year.
It was another tough day for the tech sector, particularly in the U.S. where investors have been rotating out of biotech and technology stocks that ran up sharply last year and are now deemed a bit too rich.
“Overall, when there is uncertainty in the market, people sell their winners and the first thing you sell are the high multiple stocks and continue to sell until the economy justifies the multiples it’s trading at,” added Small.
The TSX tech sector declined 1.46 per cent as BlackBerry (TSX:BB) fell 41 cents to $7.94. In New York, Twitter fell 3.75 per cent to US$30.66 after plunging almost 18 per cent Tuesday.
Telcos led advancers with Telus (TSX:T) up 44 cents to $39.34 a day before the company posts earnings.
On the commodity markets, June crude on the New York Mercantile Exchange gained $1.27 to US$100.77 a barrel and the energy sector gained 0.66 per cent.
The base metals sector was down 1.33 per cent as July copper slipped two cents to US$3.03 a pound.
June bullion faded $19.70 to US$1,288.90 an ounce and the gold sector dropped about two per cent.
Note to readers: This is a corrected story: A previous version said Talisman shares closed up 89 cents