TSX Ends Higher On Earnings, Valeant Offer -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher on Tuesday, with investors upbeat over the latest batch of economic and earnings reports from Canada and the U.S., and on the big news of Valeant Pharmaceuticals International, Inc. offer to buy Botox maker Allergan Inc. Nonetheless, declining crude oil and gold prices capped some of the gains.

The S&P/TSX Composite Index closed Tuesday at 14,555.97, up 62.29 points or 0.43 percent. The index scaled an intraday high of 14,556.60 and a low of 14,471.87.

On Monday, the index ended marginally down at 14,493.68, snapping a four-session winning streak, tracking mostly rising global equity markets on the back of some recent encouraging economic reports from the U.S.

The Capped Healthcare Index jumped 3.07 percent on the back of an announcement from Valeant Pharmaceuticals International, Inc. (VRX.TO) that it has submitted a merger proposal to the Board of Directors of Allergan, Inc. (AGN). As per the deal, each Allergan share would be exchanged for $48.30 in cash and 0.83 shares of Valeant common stock, based on fully diluted number of Allergan shares outstanding.

Valeant Pharmaceuticals shares were up 7.68 percent, Extendicare Inc. (EXE.TO) up 0.30 percent and Catamaran Corporation (CCT.TO) up 1.47 percent.

Canadian Pacific Railway Limited (CP.TO) shares jumped 5.26 percent on better than expected results. The company reported a first quarter profit of C$254 million, up from C$217 million in the previous year. Earnings per share were C$1.44, compared to C$1.24 last year.

Energy stocks are turning in a mixed performance amid expectations the official U.S. crude inventory data due on Wednesday will show a notable surge in crude stockpiles.

Crude oil plunged to end at a two-week low ahead of the weekly oil report from the Energy Information Administration with investors anticipating a notable surge in U.S. stockpiles.

The Energy Index gained 0.08 percent, although U.S. crude oil futures for May delivery, plunged $2.24 or 2.2 percent to close at $102.13 a barrel Tuesday on the Nymex.

For June delivery, the front month and the most actively traded contract, crude oil futures plummeted $1.90 or 1.8 percent to close at $101.75 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) dropped 0.22 percent, while Encana Corp. (ECA.TO) lost 0.16 percent. Husky Energy Inc. (HSE.TO) edged up 0.22 percent, Canadian Oil Sands Limited (COS.TO) gained 0.58 percent, Crescent Point Energy Corp. (CPG.TO) added 0.38 percent, and Talisman Energy Inc. (TLM.TO) added 1.02 percent.

Canadian Natural Resources Ltd. (CNQ.TO) added 0.25 percent.

Gold futures slipped for a third straight session with investors tracking rising U.S. and European equity markets, with preference for the riskier equity assets.

The Global Gold Index gained 1.55 percent, with gold futures for June delivery, dropping $7.40 or 0.6 percent to close at $1,281.10 an ounce Tuesday on the Nymex.

Barrick Gold Corp. (ABX.TO) gained 1.79 percent, Agnico Eagle Mines Limited (AEM.TO) moved up 0.77 percent, and Yamana Gold Inc. (YRI.TO) edged up 0.12 percent.

Among other gold stocks, Kinross Gold Corp. (K.TO) was up 0.67 percent and Goldcorp Inc. (G.TO) added 1.92 percent.

The Capped Materials Index gained 1.36 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) gaining 0.74 percent.

The Financial Index slipped 0.20 percent with the Toronto-Dominion Bank (TD.TO) up 0.08 percent, Royal Bank of Canada (RY.TO) down 1.47 percent, Bank of Montreal (BMO.TO) down 0.07 percent, and National Bank of Canada (NA.TO) down 0.53 percent.

The Diversified Metals & Mining Index added 1.17 percent, with Lundin Mining Corp. (LUN.TO) up 3.04 percent and First Quantum Minerals Ltd. (FM.TO) up 0.38 percent.

Teck Resources Limited (TCK.B.TO) gained 2.37 percent after reporting an adjusted profit of C$105 million or C$0.18 per share for the first quarter, compared to C$328 million or C$0.56 per share a year ago. The company also said that it is planning to eliminate approximately 600 positions or 5 percent of its global workforce and is seeking to reduce 5 percent in other costs for total savings of approximately C$200 million.

The Information Technology Index surrendered 0.32 percent, with BlackBerry Limited (BB.TO) up 0.38 percent.

The Capped Industrials Index added 1.46 percent, with Bombardier Inc. (BBD.B.TO) up 2.03 percent and Air Canada (AC.B) down 0.54 percent. Canadian National Railway Company (CNR.TO) added 0.94 percent, while Ballard Power Systems (BLD.TO) dropped 1.13 percent.

Sandstorm Gold Ltd. (SSL.TO) shares are down 3.51 percent. On Monday, Sandstorm Gold Ltd. entered into a definitive arrangement agreement with Sandstorm Metals & Energy Ltd. (SND.TXV) to acquire all of the issued and outstanding shares of Sandstorm Metals other than the Sandstorm Metals Shares currently owned by the Company.

On the economic front, a Statistics Canada report showed wholesale sales to have risen for a second consecutive month in February, moving up 1.1 per cent to $50.7 billion, led by motor vehicle and parts. Excluding this sub-sector, wholesale sales rose 0.8 percent.

In economic news from the U.S., a report from the National Association of Realtors showed existing home sales edged down 0.2 percent to a seasonally adjusted annual rate of 4.59 million in March from 4.60 million a month earlier. Economists expected existing home sales to drop to an annual rate of 4.56 million.

The Federal Housing Finance Agency Tuesday said home prices in February rose a seasonally adjusted 0.6 percent, up 6.9 percent from a year ago. Home prices in January rose a downwardly revised 0.4 percent, when compared to the initial estimate that showed a gain of 0.5 percent. Economists expected prices to increase a seasonally adjusted 0.3 percent month-over-month following a 0.5 percent increase in January.

The Richmond Federal Reserve's manufacturing index for April rose to 7 from a negative 7 in March. The components of the survey were positive, as new orders showed a gain of 19 points and shipments positive with gains of 15 points. Economists expected the index to come in at 0.

Meanwhile, eurozone consumer confidence dropped less-than-expected in March, a report from the European Commission showed Tuesday. Eurozone consumer confidence slipped to an annual rate of -8.70, from -9.30 in the previous month which was revised down from -9.00. Economists anticipated consumer confidence to drop to -9.05 in March.

Eurozone construction output growth eased sharply in February, data from Eurostat showed Tuesday. Construction output grew only 0.1 percent from January, when it was up by 1.6 percent. The decline was driven by a 0.4 percent fall in building construction, while civil engineering advanced 1.1 percent. On a yearly basis, construction output advanced 6.7 percent in February, but slower than the 8 percent increase seen in January.