Gold backs off one-week high

Gold prices posted mild losses on Friday, backing away from a week-high settlement a day prior, and seeing little benefit from dollar weakness as investors readied for the long U.S. holiday weekend.

Gold for August delivery fell $3.30, or 0.3%, to $1,389.50 U.S. an ounce on the Comex division of the New York Mercantile Exchange. August gold tacked on $24.40, or 1.8%, to end at $1,392.80 U.S. an ounce on Thursday — its highest settlement since May 15.

U.S. stocks opened lower in the midst of more turbulence for Japanese stocks and as U.S. investors took to the sidelines ahead of Memorial Day weekend. Fresh data showed some lift among American manufacturers as durable-goods orders rose 3.3% in April against expectations for a rise of 1.4%.

Much of that gain was attributed to higher demand for autos, airplanes and military wares, but demand was still broadly based.

The dollar also remained weaker, though that didn't appear to be a big help for gold. Commodities priced in dollars, including gold, tend to trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of metals to holders of other currencies.

The ICE dollar index, a gauge of the greenback’s movement against six other major currencies, exchanged hands at 83.683 compared with Thursday’s level of around 83.72.

Among other metals contracts, copper fell two cents, or 0.5%, to $3.29 a pound. July silver fell eight cents, or 0.4%, to $22.42 U.S. an ounce.

June palladium futures fell $5.15, or 0.7%, to $732 U.S. an ounce, while platinum rose $1.60 to $1,458.80 U.S. an ounce.

'Irrational' hackers growing fear

Cybersecurity researcher H.D. Moore discovered he could use the Internet to access the controls of some 30 pipeline sensors around the country that were not password protected.

A hacking expert who helps companies uncover network vulnerabilities, Moore said he found the sensors last month while analyzing information in huge, publicly available databases of Internet-connected devices.

U.S. national security experts used to take comfort in the belief that "rational" super powers like China or Russia were their main adversaries in cyberspace. These countries may have the ability to destroy critical U.S. infrastructure with the click of a mouse, but they are unlikely to do so, in part because they fear Washington would retaliate.

Now, concerns are growing that "irrational" cyber actors - such as extremist groups, rogue nations or hacker activists - are infiltrating U.S. systems to hunt for security gaps like the one uncovered by Moore. These adversaries may not be as resourceful, but like Timothy McVeigh's bombing of an Oklahoma federal building in 1995, it is the element of surprise that is as concerning.

Former U.S. Homeland Security Secretary Michael Chertoff said he was worried the first destructive cyber attack on U.S. soil might resemble the Boston Marathon bombings in the sense that the suspects were not on the government's radar.

Emerging cyber actors that security experts say they are most concerned about include Iran, believed to be behind the ongoing assaults on U.S. banking websites, as well as a devastating attack on some 30,000 PCs at Saudi Arabia's national oil company last year.

North Korea is also quickly gaining cyber skills, experts say, after hackers took down three South Korean broadcasters and two major banks in March.

Another emerging actor is the Syrian Electronic Army, an activist group that has claimed responsibility for hacking the Twitter accounts of major Western media outlets, such as the Associated Press last month, when its hackers sent a fake tweet about explosions at the White House that briefly sent U.S. stocks plunging.

The U.S. power grid is the target of daily attempted cyber attacks, according to a report by California Representative Henry Waxman and Massachusetts Representative Ed Markey released at the House Energy and Commerce Committee's cybersecurity hearing on Tuesday.

More than a dozen utilities report daily, constant or frequent attempted attacks, ranging from unfriendly probes to malware infection, according to the report.

Gerry Cauley, chief executive of the North American Electric Reliability Corp, told the Reuters Cybersecurity Summit that computer viruses have been found in the power grid that could be used to deliver malicious software to damage plants. NERC is a non-profit agency that oversees and ensures the reliability of bulk power system in the region.

Experts say that with so many unknown hackers trying to infiltrate U.S. industrial control systems, they fear someone somewhere - perhaps even an amateur - will intentionally or unintentionally cause damage to power generators, chemical plants, dams or other critical infrastructure.

Santamarta has identified hundreds of Internet-facing control systems -- on the grid, at water treatment facilities and heating and ventilation systems for buildings including hospitals. He has also uncovered bugs built into industrial control equipment.

The Department of Homeland Security's Industrial Control Systems Cyber Emergency Response Team, known as ICS-CERT, last week warned of a flaw that Santamarta found in equipment from Germany's TURCK, which is used by manufacturers and agriculture firms in the United States, Europe and Asia.

The agency said attackers with "low" hacking skills could exploit the flaw, letting them remotely halt industrial processes. It advised customers to install a patch that would protect them against such attacks.

Stunned by Enbridge Inc.’s Kalamazoo River oil spill in 2010 that disrupted its sole market access in Saskatchewan, Crescent Point Energy Corp. found an unlikely ally: an agriculture company.

Toronto-based Ceres Global Ag. Corp owns a stake in Southern Stewart Railway set up to transport grain from Stoughton, Sask., to Regina, from where it connects to other lines. But floods over the past two years had wrecked its agriculture business, and the province’s burgeoning oil production seemed like a good way to bring its trains back into active duty.

The arrangement took off. Within the space of a year, SSR was shipping nearly 30,000 bpd of oil out of Saskatchewan, helping Crescent Point and others escape the heavy oil discounts plaguing Canadian producers.

Saskatchewan producers desperately need these small-scale solutions for the big problem of pipeline capacity constraints.

Encouraged by its first foray into oil shipment, Ceres is now roping in bigger players such as Warren Buffett’s Burlington Northern Santa Fe Corp. railway company for its second ag-and-oil venture.

"We think we know logistics and transportation pretty well. And there are synergies between ag and oil," Michael Detlefsen, president of Ceres said.

The company starts building a logistics hub in Northgate, Sask. next month, featuring two high-efficiency rail loops, each capable of handling unit trains of up to 120 railcars, to be served by BNSF Railway’s network. The facility will be shipping 15,000 to 20,000 bpd of Saskatchewan oil in the first phase, ramping up eventually to 70,000 bpd.

The company is in talks with six groups with oil operations in Saskatchewan interested in transporting oil to U.S. refineries and tidewater.

Meanwhile, Twin Butte, an intermediate producer, which ships 15% of its oil via rail, will complete construction of a facility at Lashburn, Sask. by the second quarter, which potentially doubles its rail car shipments.

Unlike its neighbours Alberta and Northwest Territories, Saskatchewan is not exploring expensive northern pipeline proposals and sticking with a series of low-key but effective rail-based solutions.

In the interim, rail remains the most viable option for many Saskatchewan producers as a number of small loading facilities spring up across the province.

Home to the mighty Bakken — which it shares with North Dakota — as well as the Shaunovan, Viking and Birdbear plays, Saskatchewan has emerged as a hunting ground for producers able to squeeze oil from mature wells and explore sizeable conventional pockets largely left alone by major producers.

While Alberta gets all the attention, Saskatchewan ramped up oil production to a record 470,000 bpd last year.

But the industry has been unable to realize the full fruits of its labours, McMillan said.

"[The discounts] are very serious for our economy," McMillan said. "To the government we estimate loss of up to $300 million on annual basis in differentials last year. We estimate opportunity loss to the industry in Saskatchewan alone of $2.5 billion."

Access to market is especially important for the province, which competes with other oil and gas regions that are closer to tidewater or refineries.

"Saskatchewan is facing the same challenges Alberta has as a major energy producer," said Michael Holden, senior economist at CanadaWest Foundation.

The province’s economy is in the midst of a robust growth cycle, creating 25,000 new jobs over the past 12 months and driving unemployment rate down to 3.9% in March, one of the lowest in the country. But discounts are taking the shine off, with new exploration and development activity slowing.

Japan stocks up after roller-coaster ride

Japanese shares ended modestly higher Friday after a roller-coaster ride that subjected the Nikkei Stock Average to a swing of more than 3% on both sides of the previous day’s close.

The Nikkei 225 regained 128.47 points, or 0.9%, to end the week at 14,612.45, after Thursday’s collapse of more than 1,100 points, its biggest one-day slide in two years.

In Hong Kong, the Hang Seng Index capsized 51.01 points, or 0.2%, to 22,618.67

The Nikkei’s slump on Thursday had came against the backdrop of extreme volatility in the bond market, which forced the Bank of Japan to step in and offer funds to soothe investor nerves.

The yield on the 10-year Japanese government bond (JGB) yield rose to 1% Thursday before recovering, even as the Bank of Japan last month announced plans to buy JGBs on an unprecedented scale — a move intended to lower yields and borrowing costs.

On Friday afternoon, the 10-year yield was at 0.835%.

Among the major stock movers Friday, shares of Sharp Corp. climbed 8.2%, Tokyo Electric Power Co. jumped 9.9% and Shinsei Bank Ltd. rose 6.5%.

On the downside, Renesas Electronics Corp. dropped 2.5%, Sumitomo Mitsui Financial Group Inc. shed 2.1% and Japan Real Estate Investment Corp. retreated 4%.

Financial stocks dropped in Sydney amid worries about the economic outlook. Commonwealth Bank of Australia fell 1.4%, and National Australia Bank Ltd. dropped 1.3%.

In the resource sector, BHP Billiton Ltd. came off 1.5%, and Woodside Petroleum Ltd. gave up 1.3%.

However, Newcrest Mining Ltd. rose 3.9% after gold futures rallied overnight.

Shares of Echo Entertainment Group Ltd. plunged 11.9% after Crown Ltd. sold a 10% stake in the casino operator.

In Hong Kong, shares of Lenovo Group Ltd. jumped 3.8%, on top of the 2.9% advance Thursday in the wake of a 34% jump in annual profit for the computer maker.

But some property developers and insurers mostly fell to keep the market under pressure, with China Overseas Land & Investment Ltd. losing 1.7%, and China Life Insurance Co. down 1.2%.

Developer Cheung Kong Holdings Ltd. fell 2.5% as the stock traded without rights to a dividend

In other markets;

Markets in Singapore had the day off

In Shanghai, the CSI 300 Index took on 14.38 points, or 0.6%, to 2,597.23

In Korea, the Kospi Index inched higher 4.26 points, or 0.2%, to 1,973.45

Taiwan’s Taiex Index lost 28.05 points, or 0.3%, to 8,209.78

The New Zealand Exchange 50 Gross Index subtracted 62.35 points, or 1.4%, to 4,526.25

Australia’s S&P/ASX staggered 78.95 points, or 1.6%, to 4,983.50

04:24 PM EST
Stocks flat to end short week

Possible Valeant deal draws attention

The Toronto Stock Exchange found its way narrowly into the green by the end of Friday, helped by a 13.2% boost in shares of Valeant Pharmaceuticals International.

The S&P/TSX composite index scraped together a gain of 9.13 points, to end a short week at 12,667.22

The Canadian dollar dropped 0.19 cents to 96.90 cents U.S.

According to reports, Valeant is close to a $9-billion deal to acquire eye care company Bausch & Lomb Holdings Inc. from Warburg Pincus LLC. The report sent Valeant shares up $10.13 to $86.97 — their highest level since 2001.

July copper was down a penny at US$3.29 a pound. Teck Resources dropping 13 cents, to $28.08

In the energy sector, Imperial Oil gave back 19 cents, or 0.5%, to $39.93, while Petrobank Energy took something of a beating, losing three cents, or 5.3%, to 54 cents.

Gold, however, took the biggest drubbing, with Barrick Gold getting hammered 43 cents, or 2.1%, to $19.69, Alacer Gold skidding nine cents, or 4.1%, to $2.13.

The Toronto exchange was also helped by rising shares in Manitoba Telecom Services, which rose 5.6%, or $1.81, to $33.58.

Winnipeg-based MTS announced that it will be selling its national telecommunications arm, Allstream, to Accelero Capital Holdings in a deal worth $520 million.

Shares in National Bank also climbed, up 1.8% or $1.38, to $76.94 after Canada’s sixth-largest bank said it was hiking its dividend and buying back some of its shares after its second-quarter profit beat analyst estimates by a wide margin.

There was no economic news out today.

ON BAYSTREET

The TSX Venture Exchange accumulated 6.27 points to 948.32

Eight of the 14 Toronto subgroups were negative, with gold sliding 1.3%, while material and global base metals each erased 0.9%.

The half-dozen gainers were led by health-care, springing to life 3.7%, while telecoms and real-estate each garnered 0.2%.

ON WALLSTREET

Experts say the bull market hit a speed bump this week as investors begin to consider what life will be like when the U.S. Federal Reserve starts to taper off its long-standing asset purchasing program.

The Dow Jones Industrials notched 8.60 points higher after a generally negative day, to end the week at 15,303.10

The S&P 500 index was down 2.70 points to 1,647.81. The tech-rich NASDAQ Composite fell 0.27 points to 3,459.14

But all three U.S. indexes ended lower for the week, snapping a four-week winning streak.

With the major gauges up about 15% for the year, some investors have speculated the market is on the verge of a long-awaited pullback. But others say stocks will continue to grind higher as investors look for opportunities to get in on the rally.

Markets in the U.S. will be shuttered Monday for Memorial Day.

Shares of Dow component Procter & Gamble rose after the company ousted CEO Bob McDonald and replaced him with his predecessor A.G. Lafley. The company had been under pressure from activist investor Bill Ackman to make the move.

Shares of Tesla hit a record high as investors continue to bet the electronic car company founded by Elon Musk is miles ahead of the competition.

Meanwhile, Facebook shares fell below $25 U.S. a share, a level not seen since November. The social network has struggled since its initial public offering as investors worry about Facebook's ability to make money off of mobile users. The stock is now down 9% so far this year.

Shares of two well-known retailers plunged on weak results. Sears Holding and Abercrombie & Fitch sank after reporting larger than expected losses in the most recent quarter.

Shares of Salesforce.com slid more than 7% as the company offered a weak 2014 outlook. Gap shares also fell on weak guidance.

Pandora shares erased earlier gains, sliding more than 4%. The music site reported better-than-expected revenue and a slightly smaller-than-forecast loss after the close Thursday.

GameStop shares sank after the video game retailer said earnings fell in the most recent quarter. Investors are also concerned about how the introduction of Microsoft's new Xbox One game console will change the market for used games.

In economic news, new orders for durable goods rose 3.3% in April, following a drop of 5.9% in March, according to the U.S. Commerce Department. Economists had predicted a 1.6% rise.

Prices for the 10-year U.S. Treasury inched upward, driving yields down to 2.01% from Thursday’s 2.02%. Treasury prices and yields move in opposite directions.

Oil prices faded 43 cents to $93.82 U.S. a barrel.

Gold prices shed $10.20 at $1,381.60 U.S. an ounce

09:53 AM EST - Strathmore Minerals Corp. : and Energy Fuels Inc. announced the signing of a letter of intent (LOI) whereby Energy Fuels would acquire, by way of a plan of arrangement, all of the issued and outstanding common shares of Strathmore. Strathmore Minerals Corp. (T.STM ) shares were unchanged at 0.18.

09:54 AM EST - Energy Fuels Inc. : and Strathmore Minerals Corp. announced the signing of a letter of intent (LOI) whereby Energy Fuels would acquire, by way of a plan of arrangement, all of the issued and outstanding common shares of Strathmore. Energy Fuels Inc. (T.EFR) shares were unchanged at 0.16.

09:55 AM EST - National Bank of Canada : reported $434 million in net income for the second quarter of 2013 versus $553 million in the second quarter of 2012. Diluted earnings per share for the quarter ended April 30, stood at $2.49 compared to $3.22 in the same quarter of 2012, in particular due to a gain that had been realized on the Natcan transaction in the second quarter of 2012. National Bank of Canada (T.NA) shares were up $0.70 at 76.26.

09:57 AM EST - Agnico Eagle Mines : announced that it has agreed to purchase 7.5 million units of Probe Mines from Cormark Securities at a price of $1.50 per unit for a total consideration of $11.25 million. Agnico Eagle Mines (T.AEM) shares were up $0.04 at 30.26.

09:58 AM EST - Probe Mines Ltd. : announced that Agnico Eagle Mines has agreed to purchase 7.5 million units of Probe Mines from Cormark Securities at a price of $1.50 per unit for a total consideration of $11.25 million. Probe Mines Ltd. (V.PRB) shares were up $0.04 at 1.45.

11:47 AM EST - Sabina Gold & Silver : reported more results from the 2013 work campaign on its 100%-owned Back River project in Nunavut. Results included 15.20 g/t gold over 20.90 metres. Sabina Gold & Silver (T.SBB ) shares were unchanged at 1.27.

11:48 AM EST - Troy Resources Limited : and Azimuth Resources Limited announced that Troy has established an institutional acceptance facility open to professional investors in order to facilitate receipt of acceptances of Troy's off-market takeover offer for all Azimuth shares. Troy Resources Limited (T.TRY ) shares were down $0.02 at 1.73.

11:49 AM EST - Azimuth Resources Limited : and Troy Resources Limited announced that Troy has established an institutional acceptance facility open to professional investors and wholesale clients in order to facilitate receipt of acceptances of Troy's off-market takeover offer for all Azimuth shares. Azimuth Resources Limited (T.AZH) shares were unchanged at 0.35.

03:45 PM EST - Manitoba Telecom Services Inc. : has agreed to sell its Allstream business telecommunications arm and use about half of the proceeds to reduce its pension and debt obligations. Winnipeg-based MTS, which operates Manitoba's largest telecommunications business, says the deal values Allstream at $520 million. Manitoba Telecom Services Inc. (T.MBT) shares were up $1.66 at 33.76.

03:46 PM EST - Caza Oil & Gas, Inc. : announced today that it has entered into a Note Purchase Agreement with Apollo Investment Corporation, an investment fund managed by Apollo Investment Management, pursuant to which the Note Holder has agreed to purchase from the Company up to $50,000,000 U.S. of senior secured notes of the Company. Caza Oil & Gas, Inc. (T.CAZ) shares were up $0.04 at 0.22.

03:48 PM EST - Enerplus Corporation : announced that a cash dividend in the amount of $0.09 per share will be payable on June 20, to all shareholders of record at the close of business on June 5. The ex-dividend date for this payment is June 3. Enerplus Corporation (T.ERF) shares were down $0.02 at 16.49.

Google (NASDAQ: GOOG) reaches for stars on music service announcement

Its name is now part of the social language of the world; gone are the days when, if folks were at a loss for information, we merely researched it. Now, we "Google" it, in one of those exemplary cases of a noun turning into a verb almost overnight.

The search engine that spawned this noun/verb witnessed a milestone this week on stock markets, as Google Inc. (NASDAQ: GOOG) topped the $900 U.S. mark per share. It was one of those instances of "buy on the rumor, sell on the fact", with the price vaulting over suspense about what the company would say Wednesday at its annual developers’ conference in San Francisco. As luck would have it, Google CEO Larry Page had trouble getting the words out due to a vocal cord ailment.

The announcement would prove to be huge, regardless of whether made by Page or an underling: the company unveiled a streaming music service called All Access that blends songs users have already uploaded to their online libraries with millions of other tracks for a monthly fee of $9.99 U.S.

The service puts the internet goliath in competition with popular paid subscription plans like Spotify, Rdio and Rhapsody and free music services like Pandora.

The competition for the music service dollar is growing fierce. Apple Inc. (NASDAQ: AAPL) is expected to debut a digital radio service later this year; Google-owned YouTube is also working on a paid subscription music plan; and Sweden's Spotify is exploring a way to make a version of its paid streaming plan free with ads on mobile devices.

Not that everything has been sweetness and light for the company this week. On Friday, controversy surrounded the company’s yet-to-be-released Google Glass spectacles, in the form of a letter sent to Page from a U.S. congressional privacy group, posing eight fundamental questions about privacy. The letter is not so much a "j’accuse" as a request for more information.

The first asks about how Google will prevent the "unintentional collection of data," from both the user and non-user without consent. Next question concerns the privacy of those not wearing the glasses, and the security of data stored on them, particularly on glasses being sold privately. The third question aims to clarify the inclusion of facial recognition software, while a fourth called for examples of the limits Google will put in place on Glass to avoid invading privacy.

The lawmakers want Google to respond by June 14, but a New York Times article quoted company honchos as saying face recognition features won’t be added to Glass until "we have strong privacy protection in place"

Whether the controversy is finding its way into the souls of investors remains to be seen, but the price remains a humdinger, hitting a 52-week high of $919.98 U.S. on Thursday, May 16, before settling in at $902.84 U.S. around noon ET on the Friday. The stock’s 52-week low was plumbed in mid-June of last year, at $556.52 U.S.