Strong earnings reports and major deal-making in the pharmaceutical sector pushed the Toronto stock market modestly higher Tuesday.
The S&P/TSX composite index took on 62.29 points to end Tuesday at 14,555.97
The Canadian dollar slipped 0.13 cents U.S. to 90.67 cents U.S.
Canadian drug company Valeant Pharmaceutical International Inc. has teamed with Bill Ackman's Pershing Square Capital Management in a cash and stock bid worth about $45 billion for Botox maker Allergan. Valeant shares gained $10.62, or 7.7%, to $149.38.
If the deal goes through, it would give Valeant an array of other cosmetic and eye drugs and add to a string of more than 50 acquisitions that have made it one of Canada's largest drug makers
But some analysts warn that this acquisition strategy could be more difficult to execute as the economic recovery continues to take hold.
On the earnings front, Canadian Pacific Railway had $254 million of net income in the first quarter, up from $217 million a year earlier. Net income per share increased 16% year over year, rising to $1.44 from $1.24 in the first quarter of 2013.
The Calgary-based company's revenue also increased, to $1.509 billion from $1.495 billion. Analysts on average had expected earnings of $1.41 per share on revenue of $1.51 billion. Its shares climbed $8.63, or 5.3%, to $172.62.
Teck Resources Ltd. posted an adjusted profit of $105 million or 18 cents a share, down from $328 million or 56 cents per share in 2013. That was below the 24 cents per share that analysts expected. Revenue dropped to $2.084 billion from $2.33 billion and below the $2.098 billion that had been forecast.
Teck said it plans to eliminate 600 positions, delay the restart of a B.C. coal mine and cut spending by 5%. Its shares rose 57 cents, or 2.4%, to $24.58.
Rogers Communications Inc. was a weight on the TSX as the telcom reported that quarterly net income dropped 13% to $307 million or 57 cents per share.
On an adjusted basis, the results missed analyst expectations, coming in at 66 cents per share, four cents below the average estimate and its shares shed $1.50, or 3.4%, to $42.78.
The gold sector was up as Goldcorp spiked 51 cents to $27.04.
In the economic docket, Statistics Canada reported that wholesale sales rose for a second straight month in February, up 1.1% to $50.7 billion. Sales in all sub-sectors increased, led by motor vehicle and parts, without which the rise would have been 0.8%.
ON BAYSTREET
The TSX Venture Exchange hiked 7.67 points to 1,004.88
Nine of the 14 Toronto subgroups went north on the day, led by health-care issues, 2.9% healthier, industrials, stronger by 1.5%, and gold, shining 1.4% brighter.
The five laggards were weighed most by telecoms, down 1.2%, while information technology and utility stocks each sank 0.4%.
ON WALLSTREET
All three major indices powered ahead, as investors welcomed quarterly results from several big companies and news of mergers in the pharmaceutical industry.
The Dow Jones Industrial Average grew 65.12 points to 16,514.37
The S&P 500 gained 7.66 points to 1,879.55, and the NASDAQ composite index spiked 39.91 to 4,161.46.
Shares in Netflix soared after the company reported earnings late Tuesday that beat expectations and showed strong subscription growth. It also said it would increase its monthly fee for new customers in some countries later this quarter.
Motorcycle maker Harley Davidson was also cruising away in Tuesday trading. Its shares were up big after a strong earnings report this morning.
Outside of earnings, a mega pharmaceutical deal emerged late Monday. Shares in Botox maker Allergan surged 16% after activist investor Bill Ackman (Allergan's largest shareholder) said he approved of Valeant Pharmaceutical's bid to buy the company. Allergan had already gained 6% on Monday.
And Tesla spiked after a report by the Wall Street Journal cited CEO Elon Musk talking about his company's plan to build a support network in China. Musk also said that Panasonic would be Tesla's partner in a planned battery gigafactory in the United States. Tesla has had a stratospheric gain of around 330% in the past year.
In other news Tuesday, Comcast shares bounced after the cable provider reported a 30% jump in profit for the first quarter. The CEO attributed the gains to the Sochi Olympics, which were broadcast via NBC.
Fast food giant McDonald's announced lower sales, especially in the U.S. as the company underperformed expectations. The stock fell slightly in afternoon trading.
Aerospace company Lockheed Martin also reported a year-over-year gain in quarterly income, but shares declined.
Prices for 10-year U.S. Treasuries sagged, upping yields to 2.73% Monday’s 2.72%. Treasury prices and yields move in opposite directions.
Oil prices were off $2.13 to $102.24 U.S. a barrel.
Gold prices dipped $4.70 at $1,283.80 U.S. an ounce.
