Stock markets in Toronto and New York climbed into record territory amid a major potential acquisition deal involving one of Canada’s most iconic companies.
The S&P/TSX composite index gained 50.47 points to 15,586.02, while the S&P 500 briefly passed the 2,000 point mark.
The Dow Jones industrials climbed ahead 70.22 points to 17,071.44 while the Nasdaq was up 24.75 points to 4,563.3.
The Canadian dollar was off 0.12 of a cent to 91.14 cents (U.S.).
Burger King is in talks to buy Tim Hortons in hopes of creating a new, publicly traded company with its headquarters in Canada. With a new base in Canada, Burger King, now based in Miami, could shave its U.S. tax bill. The majority owner of Burger King, 3G Capital, would own the majority of shares of the new company.
It’s not known what such a deal would be worth, but both stocks surged with Burger King up 13.8 per cent to $30.85 (U.S.) in New York while Tim Hortons jumped 17.63 per cent to $73.92 (Canadian) in Toronto.
Sentiment was helped along by top central bankers in Europe and Japan who said support for their economies would continue and additional help is possible.
European Central Bank president Mario Draghi told the Federal Reserve’s economic symposium Friday that the bank is considering asset purchases to pump more money into Europe’s economy, though he gave no guidance on when that help would happen.
Bank of Japan chief Haruhiko Kuroda told reporters at the Jackson Hole, Wy., gathering of central bankers that Japan’s central bank planned to continue its “extremely accommodative monetary stance” until inflation has risen to the bank’s two per cent target and stays there.
Also at the Fed meeting, central bank chairwoman Janet Yellen offered no signal that she’s altered her view that the economy still needs support from the Fed. Yellen, however, also said that if improvement in employment continues to be more rapid than forecast then the Fed might have to raise rates sooner than it currently expects.
Traders will also digest some important economic data this week, including the latest reading on Canadian economic growth for June and the second quarter. Economists expect that Statistics Canada will report Friday that GDP grew by 0.2 per cent in June, which would translate into annualized growth of 2.6 per cent.
In the U.S., the durable goods report for July is out Tuesday and economists looked for a gain of seven per cent, reflecting a strong pickup in aircraft orders. And in earnings news, traders will also consider quarterly reports from most of the big Canadian banks during the week. Royal Bank posted a better than expected report and a dividend increase on Friday.
The TSX base metals group also lifted the TSX, up 0.35 per cent, while September copper was unchanged at $3.21 (U.S.) a pound.
The energy group edged up 0.1 per cent while October crude in New York declined 30 cents to $93.35 a barrel.
The gold sector led decliners, down 0.4 per cent while December gold nudged $1.90 lower to $1,278.30.