The Toronto stock market was set to find some lift from the resource sector Tuesday as oil prices rose in the wake of an agreement to lend Greece €130 billion to avoid a debt default while traders took in major acquisition activity.
The Canadian dollar was down 0.31 of a cent to 100.37 cents U.S after Greece on Monday finally secured its second massive bailout in less than two years.
Calgary-based oil and gas contractor Flint Energy Services Ltd. said Monday it is being bought by U.S. engineering and construction giant URS Corp. for $1.25 billion in cash. The deal, worth $25 a share, reflects booming growth in Alberta’s oilsands and North American shale gas. The price represents a 68% premium to Flint’s closing price Friday on the TSX.
And on Tuesday, Newfoundland-based power company Fortis Inc. said it is buying New York state utility CH Energy Group Inc. in a cash and debt deal worth $1.5 billion U.S.
In other corporate news, Research In Motion has released new operating software BlackBerry PlayBook OS 2.0 for download. The Waterloo, Ont.,-based company says the new operating system enhances communications and productivity and offers expanded application and content support.
Natural gas engine technology maker Westport Innovations Inc. has changed a joint venture with Cummins Inc. to refocus on what could be strong growth in the North American market. The Vancouver company said Monday the Cummins Westport venture will narrow its focus on developing new fuel-efficient engines for North American customers.
Meanwhile, offshore stocks failed to rally following an all-night meeting among European finance ministers that secured the bailout agreement for Greece, ending near-term concerns that the country might slide into default.
U.S. index futures were up only slightly with about two hours before markets open, suggesting that stocks will open relatively flat at the start of trading.
Futures for the Dow Jones industrial average rose 42 points, or 0.3%, to 12,971. Futures for the broader S&P 500 rose just 2.3 points, or 0.2%, to 1,362, and for the Nasdaq, there was a gain of 3.25 points to 0.1% to 2,585.25
The reaction in Europe seemed to be even more skeptical. The U.K.'s FTSE 100 fell 0.5% and Germany's DAX index fell 0.8% in afternoon trading.
A large part of the problem is that investors are now looking beyond the immediate threat of a Greek default and toward more longer-term solutions to the European sovereign-debt crisis, and they don't like what they see.
The International Monetary Fund said that under a worst-case scenario, Greece's debt level will continue to rise, hitting 160% of its gross domestic product by 2020.
Meanwhile, commodity prices looked set for gains. Gold prices picked up 1% to 1,743.70 U.S. an ounce.
Crude oil rose to $104.50 U.S. a barrel, up 1.2%, in New York.
Tensions with Iran are largely behind the gains, with the latest jump in prices coming as Iran is demanding importers sign long-term contracts -- a move that is designed to head off sanctions
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