Canadian Stocks Reverse Early Dip after March Factory Data Finds First Decline in Over 2 Years


Canadian stocks are now around a dozen points higher today, with the S&P/TSX Composite Index having reversed a 15-point decline soon after the open and then gone more than 20 points higher late morning before running out of some puff.

Gold miners again are limiting any advance for the broader market, falling nearly 1% as a group, although they were down more than 2%. This follows an $18 slide for bullion to around $1,581 an ounce in New York commodities trade. Silver and copper also are lower today, with copper sliding over 1% after factory data from the United States and China showed stuttering growth in the top two markets for the industrial metal.

Overall, the market has a defensive tone, with the best gains among utility and consumer staple stocks although shares of energy and financial companies are now at their best levels of the day as the broader market turned positive.

In economic news, the March RBC Canadian Manufacturing Purchasing Managers' Index signalled the first deterioration in manufacturing business conditions throughout Canada since data collection began in October 2010. The factory gauge found declines last month for both output and new orders, with the overall reading falling from a 51.7 score in February to a 49.3 reading for March - sliding below the 50.0 mark separating growth from contraction.

In individual company news, Valeant Pharmaceuticals (VRX.TO,VRX) is down slightly at near $77 - but still near a year high $77.66 - after German drug-maker Merz Pharma Group this morning out-bid it for Obagi Medical Products Inc. ( OMPI ), offering $22 a share for the cosmetics and skin-care company. The Merz offer totals about $383.5 mln. VRX and OMPI three weeks ago agreed on a buy-out at $19.75 a share, or about $342 mln overall.

Also today, TransCanada Corp. (TRP.TO,TRP) is up about 0.6% and closer to year highs after saying it will seek commitments from shippers interested in capacity on a pipeline-conversion project that will take oil from Western Canada to eastern Canadian refining markets.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: OMPI

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