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At the open: Stocks rise, traders look to Fed for rate hint

Markets will be looking for signals about the Fed’s direction when chair Janet Yellen speaks at Jackson Hole, Wyo., on Aug. 22.


The Toronto stock market advanced Monday amid a further lessening of tensions in the Ukraine/Russian crisis, while traders looked ahead to a heavy slate of economic events.

The S&P/TSX composite index was ahead 33.94 points to 15,338.18. The Canadian dollar was unchanged from Friday's close at 91.84 cents (U.S.).

New York's Dow industrials jumped 102.69 points to 16,765.5, the Nasdaq gained 24.84 points to 4,489.76 and the S&P 500 index rose 10.23 points to 1,965.29.

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Sentiment was positive after the Russian and Ukrainian foreign ministers held talks in Berlin over the weekend. The discussions were aimed at ratcheting down tensions in eastern Ukraine, where pro-Russian militias have been battling Ukrainian forces.

Meanwhile, traders looked to the U.S. Federal Reserve for hints about when the central bank might move next year to hike short term interest rates from near zero. The Fed releases the minutes from its latest meeting on Wednesday. There could be a more hawkish tone in those minutes given the recent de-emphasis on disinflation in the news release from that meeting.

But traders in particular looked to Friday when Fed chair Janet Yellen delivers the keynote speech at the central bank's annual meeting in Jackson Hole, Wyoming.

One reason higher rates are a concern is that investors could be tempted to put more of their money in investments with a higher guaranteed rate of return.

Inflation plays a big part in when rates will start to head higher and traders will also consider the latest reading on the U.S. consumer price index on Tuesday. Economists looked for inflation to come in at an annualized rate of two per cent.

In Canada, June retail sales figures and July consumer prices index data come out Friday.

On the merger and acquisition front, the bidding heated up for U.S. discount chain Family Dollar. Dollar General Corp. said Monday that it would pay $78.50 (U.S.) per share in cash, three per cent higher than Family Dollar Stores Inc.'s Friday closing price. Dollar General put the deal's value at $9.7-billion.

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Last month Dollar Tree Inc. made an $8.5-billion bid for Family Dollar, offering to pay $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share they own.

In Canada, shares in Canadian discount chain Dollarama rose 52 cents to $93.82 (Canadian).

Financial stocks led advancers, up 0.4 per cent ahead of the start of a series of earnings reports coming in from the big banks over the next two weeks. Royal Bank reports Friday.

The metals and mining sector gained 0.2 per cent while September copper was unchanged at $3.10 (U.S.) a pound.

The energy sector was flat as September crude dropped $1.07 to $96.28 a barrel.

The gold sector was the biggest weight, down 0.65 per cent while lessening geopolitical tensions pushed December bullion down $8.60 to $1,297.60 an ounce.

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In other corporate developments, BlackBerry Ltd. has created a new business unit that will combine some of its most innovative technology, including QNX embedded software, Certicom cryptography applications and its patent portfolio. The unit will be called BlackBerry Technology Solutions. On the TSX, BlackBerry shares edged four cents higher to $10.48 (Canadian).

Webtech Wireless Inc. says a $1.1-million restructuring expense related to its research and development operations contributed to a second-quarter net loss of $1.6-million or eight cents per share at the Vancouver-based telematics company. Revenue from continuing operations was down 13.5 per cent to $7-million. Its stock was unchanged from Friday at $1.90.

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