Investors looked to Monday’s opening bell with optimism, amid a major acquisition that combines Canada’s largest grocery and pharmacy chains as well as relief over the latest economic growth data from China.
The S&P/TSX Composite Index fell 31.09 points to end Friday at 12,462.17.
The Canadian dollar dipped 0.23 cents to 96.05 cents U.S. early Monday
Loblaw Companies Ltd. said it has struck a friendly deal to purchase Shoppers Drug Mart Corp. for $12.4 billion in cash and stock. Loblaw is offering $33.18 in cash plus about six-10ths of a Loblaw common share for each Shoppers Drug Mart common share.
In a related move, Loblaw’s majority owner, George Weston Ltd. will subscribe for 10.5 million additional shares of the grocer for $47.55, the closing price for Loblaw shares on Friday. Proceeds from the Weston stock purchase will be used to pay a portion of the Shoppers purchase.
The TSX ended last week with a gain of 327 points or 2.7%, leaving it in positive territory year to date, albeit by only about 30 points as traders bought up resource stocks that have beaten down.
ON BAYSTREET
The TSX Venture Exchange gained 4.51 points Friday to 898.42
ON WALLSTREET
Investors south of the border were breathing a sigh of relief Monday after the latest readout on growth in China met expectations.
Futures for the Dow Industrials gained 26 points, or 0.2%, to 15,395. Futures for the S&P 500 added 2.9 points, or 0.2%, to 1,673.20, and futures for the NASDAQ took on 5.25 points, or 0.2%, to 3,067.25
Boeing's stock edged up 1% after British investigators said that a Dreamliner fire at London Heathrow Airport last Friday was not linked to its batteries, which have created problems in the past.
There had been concerns that the Chinese economic slowdown was intensifying.
While the latest data show China's economy grew at a slower pace in the second quarter -- with gross domestic product expanding by 7.5% over the previous year -- the performance matched the government's target and the consensus estimate from private forecasters.
China has averaged growth of around 10% a year in the past three decades.
Bank earnings will remain in focus Monday, with Citigroup set to report its quarterly results before the opening bell.
On the economic front, the U.S. government was scheduled to release data on June retail sales at 8:30 a.m. ET.
Major European markets gained less than 0.5% in morning trading, while the main Chinese markets ended with gains.
The Shanghai Composite index and the Hang Seng index popped up by 1% and 0.1%, respectively.
In Japan, the Tokyo Stock Exchange was closed for a holiday.
Oil prices slumped 81 cents to $105.14 U.S. a barrel
Gold prices slipped $2.30 to $1,275.30 U.S.
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