Investors drove the Toronto Stock Exchange to a record close Friday, making the most of takeover speculation and shaking off U.S. inflation fears.
The S&P/TSX Composite Index rose 78.97 points or 0.58 per cent to close at 13,578.62. In total, the index was up 153.6 points through the week, a gain of about 1.1 per cent over five trading sessions.
Cott Corp. was the Toronto Stock Exchange's biggest winner Friday. Shares climbed $3.72 or 25 per cent to $18.44 after the private-label soft drink maker said it has responded to interested parties that have approached it after Cadbury Schweppes PLC announced it would split its confectionery and Americas beverage businesses.
Meanwhile, the shares of Agricore United jumped $3.12 or 19 per cent to $19.53 on the TSX after Canada's largest grain company said an enriched offer from Saskatchewan Wheat Pool is superior to that of rival suitor James Richardson International Ltd.
After choppy morning trading, U.S. markets eked out gains in the afternoon. The Dow Jones Industrial Average was up 59.17 points or 0.47 per cent to 12,612.13 The tech-heavy Nasdaq Composite Index, meanwhile, rose a slender 11.62 points, or 0.47 per cent, to 2,491.94.
Merck & Co. led a rally in health-care shares after the drug maker's first-quarter profit beat projections. The U.S. drug giant jumped $3.85 (U.S.) to $50.21 on the New York Stock Exchange. The 8.3 per cent surge represents the biggest advance since February, 2005, and gave Merck the best performance on the Dow average.
SLM Corp. climbed on a report that buyout firms may purchase the biggest U.S. provider of student loans for more than $20-billion. Known as Sallie Mae, the financial services firm jumped $6.01, or 15 per cent, to $46.76. Blackstone Group may be a bidder for the company, the New York Times reported.
The U.S. Labour Department reported prices paid to U.S. producers rose more than forecast in March, led by a jump in energy costs that is eroding consumer confidence. The Reuters/University of Michigan's preliminary consumer sentiment index declined to an eight-month low of 85.3 in April as Americans predicted inflation would accelerate.
With files from Associated Press and Reuters
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BCE GETS A BOOST
Analyst Patrick Grenham of Citigroup Global Markets Inc. has boosted his 12-month target price for BCE Inc. to $44 a share from $35, while maintaining the “buy” recommendation on shares of the telecom company he had before rumours of a possible takeover of BCE surfaced.
“Recent press reports that a consortium is preparing a takeout bid for Bell Canada may or may not be true; however, it is incumbent on us to look at the possible economics of a takeout to see if a bid is feasible and, if so, if the pressure on the managers of Bell would be enough for them to leverage the balance sheet,” Mr. Grenham said in a report.
“When we do this, we conclude that the answer is yes to both questions and for that reason, we raise our target price to $44 a share,” he added.
BCE shares are currently trading at xxxx on the Toronto Stock Exchange.
Some big BCE shareholders have become frustrated with BCE's lacklustre share price performance and the Ontario Teachers Pension Plan, BCE's largest shareholders with a 5-per-cent stake, has contacted a U.S. buyout firm to explore the possibility of a bid for BCE.
Angela Barnes
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POSITIVE ON GOLDCORP
Bay Street is bullish on Goldcorp Inc. — with a few caveats.
On Thursday, the Toronto miner held an investor's day and received generally positive reviews.
“Overall, we were impressed with the significant internal growth opportunities,” particularly Goldcorp's projects in Mexico and north Ontario, said Tony Lesiak of UBS Investment Research.
The analyst has a “buy” rating on Goldcorp shares and has increased his 12-month price target to $37 (U.S.), up from $36.50.
