Investors in Toronto drove markets higher 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.
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.
The S&P/TSX Composite Index soared 91.06 points to greet noon at 12,553.23
The Canadian dollar faded 0.28 cents to 96.01 cents U.S.
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.
Loblaw shares jumped $4.03, or 8.5%, to $51.58, Shoppers shares surged $12.87, or 26.6%, to $61.27 while George Weston climbed $4.39 to $87.67.
The industrials group gained as Canadian Pacific Railway advanced $1.50 to $133.23.
The financials group was ahead while Manulife Financial improved by 14 cents to $18.10.
The TSX gold sector was ahead while Barrick Gold Corp. gained 28 cents to $15.77.
Oil is up about 10% so far this month, jolted higher by unexpectedly sharp drops in U.S. crude and gasoline inventories, which suggest stronger demand. The energy sector gained ground.
The September copper contract on the New York Mercantile Exchange was down two cents to $3.13 U.S. a pound. The base metals sector was off First Quantum Minerals declined 30 cents to $15.48.
In other corporate news, Fiera Properties Ltd., a joint-venture between Fiera Capital Corp. and Fiera Properties' management team, is launching a diversified open-ended property fund. The Fiera Properties CORE Fund will be managed by Fiera Properties' real estate portfolio management team. Fiera Capital shres added five cents to $12.
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 added 2.08 points to 900.50
All 14 Toronto subgroups were green midday Monday, led by a 8.2% surge in consumer staples, while utilities and industrials were co-runners-up at 0.9% each.
ON WALLSTREET
U.S. stocks were little changed early Monday as investors weighed reports on Chinese economic growth and U.S. retail sales.
The Dow Jones Industrials gained 18.39 points from Friday’s all-time record to 15,482.70
The S&P 500 index inched higher 1.73 points to 1,681.92. The NASDAQ Composite eked up 5.63 points to 3,605.71
Shares of Leap Wireless International jumped 115% after AT&T said on Friday that it plans to acquire the prepaid wireless provider for about $1.2 billion U.S.
Bank earnings remain in focus Monday. Citigroup reported quarterly net income of $4.2 billion U.S., or $1.34 U.S. per share, driven by a jump in revenue and lower loan losses.
Shares of jeweler Tiffany & Co. were up 3% after analysts at Stifel upgraded the stock.
Boeing's stock edged up 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.
The Chinese government said gross domestic product rose by 7.5% in the second quarter, matching official estimates. While growth was slower than the 7.7% rate in the first quarter, investors were relieved that Chinese GDP was not weaker than expected.
In domestic economic news, U.S. retail sales rose 0.4% in June, the Census Bureau said Monday. That's a slowdown from a 0.6% rise a month earlier, and weaker than expected.
Separately, the New York Federal Reserve bank said its index of manufacturing activity in the region rose to 9.5 in July, from 7.8 in June.
Prices for the 10-year U.S. Treasury hiked, dropping yields to 2.57% from Friday’s 2.60%. Treasury prices and yields move in opposite directions.
Oil prices dipped six cents to $105.89 U.S. a barrel.
Gold prices increased $5.40 to $1,283 U.S. an ounce.
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