Canada's main stock market, the Toronto Stock Exchange,
Wednesday rebounded from day lows near 15,450 around the time news
came out from the U.S. Federal Reserve, with investors jumping on
the Fed acknowledging an improvement in the economy there, although
it also warned that labor market slack persisted. An improvement in
the U.S. economy is seen having a knock on impact in Canada, as the
States is our largest trading partner.
The TSX jumped after the news to just under 15,520, and while
the index slipped back from there to under 15,500 again, it rallied
over the final hour to close near 15,525.
Capping gains was strong selling in most actively traded Penn
West Petroleum Ltd. (PWT.TO), which fell near 14% on Wednesday with
more than 11.3 million shares traded after the company said it is
reviewing its accounting practices and will have to restate some
previous financial reports.
Meanwhile, BlackBerry (BBRY, BB.TO) gained around 2%, although
Credit Suisse sees around 40% downside to the stock. Blackberry is
rated Underperform with a target price of US$6 at Credit Suisse
which says the company's Security Summit in NY was "constructive in
tone," as management are positioning the company to become the
end-to-end mobile security firm. Credit Suisse says given the
"inherent challenges" in turning around the services stream, as
well as the "subscale" loss making hardware business, it believes
the best for the company is to break up. Assuming shutting down the
hardware business by the end of FY15 and winding down the services
business by the end of FY16, it arrives at NAV of $3.1bn (US$6 per
share), which suggests 40% downside.
Among sectors, all were higher, except for Utilities.
Of commodities, gold fell for a third day after the U.S. Federal
Reserve announced a sixth straight US$10 billion cut to its bond
buying program amid signs that the U.S. economy is strengthening.
The Federal Open Market Committee tapered monthly bond buying to
US$25 billion and is set to end the purchase program in October.
Earlier Tuesday, U.S. gross domestic product was shown to have
risen at a 4% annualized rate in the second quarter, versus a
revised 2.1% fall in the first quarter.
West Texas Intermediate crude fell below US$100 a barrel for the
first time a fortnight after a government report showed that U.S.
gasoline supplies were up while demand was easing.
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