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Markets, dollar stronger Markets are rallying this morning as corporate earnings, fresh economic data and even a $17-billion (U.S.) loss from BP PLC boost the mood among global investors. BP named a new CEO as expected, and its results, though a hefty loss, held no bombshells. The Canadian dollar is also on the risie, going for 97.40 cents U.S. from yesterday's close at 96.86 cents.
"The hand-off from Europe and Asia seems to be inspiring more 'risk-on' bids into equities and by extension risk currencies," Jack Spitz, managing director of foreign exchange at National Bank of Canada, told Bloomberg News. "The market is setting itself up for further U.S. dollar selling against Canada and euro."
London's FTSE 100 index, Germany's DAX and the Paris CAC-40 were all up this morning, though by less than 1 per cent, while Dow Jones industrial average and S&P 500 futures indicated New York will follow along when North American markets open.
"After a modestly positive start to the week on Monday, investors seem freshly emboldened this morning following a good performance on Wall Street, good banking results and a positive reaction to BP's quarterly numbers," said David Jones, chief market strategist at IG Index. "Today's statement from the oil giant held little to worry markets, and with the change of chief exec many will be hoping this marks a clean slate for BP - one which could result in more shareholder value being recovered over the months to come. The top blue chip gainers today are dominated by the banks, getting a little bit of the feel-good factor following better-than-expected earnings from Deutsche Bank. All of this has meant that after losing some momentum in recent days, the market looks to have found a fresh pair of legs and the rally could still have further to run."
Earnings on the rise Several companies are coming in with higher profits today, helping to buoy the mood of the markets. Among them are Daimler AG, which also boosted its outlook for the year, DuPont Co. and European banks UBS and Deutsche Bank.
Consumer confidence slips Markets may be brighter today but consumer confidence in Canada is on the wane. The Conference Board of Canada's consumer confidence index dipped 3.7 points in July to 80. Notable is that that sagging feeling was widespread across the country, unlike in June, when the dips were registered in just two provinces. Least happy among us are those in British Columbia, where the index slipped 12.5 points.
"Consumers were feeling slightly less optimistic about their current income situation this month, perhaps in reaction to the implementation of the harmonized sales tax in Ontario and British Columbia," the group said. "... While recent labour market reports point to strength in the Canadian labour market, survey respondents continue to be cautious about future job prospects in their community."
BP posts hefty loss, names new CEO BP PLC today put a Yankee into King Arthur's court, naming its first non-British CEO, posting a hefty loss and planning tens of billions in asset sales. Tony Hayward, who led the energy giant through the disastrous oil spill in the Gulf of Mexico, will be recommended for a non-executive position at BP's Russian joint venture as Robert Dudley takes his place effective Oct. 1.
"BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs," said chairman Carl-Henric Svanberg. "But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."
The change at the helm came as BP posted a second-quarter loss of $17.2-billion (U.S.), compared to a profit of $4.39-billion a year earlier, and said it would speed up asset sales to up to $30-billion. It also set aside more than $30-billion to cover its costs of the disaster that began with the explosion on the Deepwater Horizon drilling rig in April.
- BP reports $17-billion second-quarter loss
- BP taps all-American as next CEO
- The rise and fall of Tony Hayward
Talisman profit jumps Talisman Energy Inc. today posted a sharply higher second-quarter profit of $603-million or 59 cents a share, compared to $63-million or 6 cents a year earlier. Talisman has been in transition mode and, said chief executive officer John Manzoni, "we are on track to deliver on our key promises for the year."
"Year on year, our underlying production volumes have increased this quarter and we expect this trend to continue through the second half of 2010," he said. "We have made substantial progress toward our announced $1.9-billion of asset sales for the year and ... we continue to reduce net debt and strengthen the balance sheet."
Mr. Manzoni also said Talisman has conducted a sweeping review of its drilling operations given the BP spill in the Gulf, including well design, procedures, training and equipment, and "this review gives us confidence in our operations, and reinforces the need to remain vigilant at every stage."
Rogers profit jumps Rogers Communications Inc. today managed to meet or, in some cases, top analysts' estimates although growth in new wireless customers is slipping. Profit jumped to $464-million or 80 cents a share in the quarter from $412-million or 65 cents a year earlier, but it also saw a 50-per-cent decline in new high-value wireless customers amid heightened competition. Rogers still dominates the smart phone market, activating 385,000 devices in the quarter, and helping to continue its strong wireless data revenue growth, The Globe and Mail's Iain Marlow reports.
Making Gerry Schwartz's day Onex Corp. and the Canada Pension Plan Investment Board have struck their deal for Britain's Tomkins PLC. The Canadian players are offering £2.89-billion or $4.5-billion (U.S.) for the British auto parts and bath tub manufacturer. It's the latest in a string of investments by Onex in the manufacturing sector. Analysts said a competing bid could always block the offer, but they see that as unlikely.
The takeover of Tomkins, noted the Reuters news agency, would mark the end of an industrial concern once called the "buns to guns" conglomerate in the 1990s because it was, at the time, the parent of the Rank Hovis McDougall food company and Smith & Wesson, well known for, among other things, the .357 Magnum. It sold the gun maker almost a decade ago. So go ahead, make Gerry Schwartz's day.
From today's Report on Business
- Conrad Black ruling likely a month away
- A losing bet on coal and iron ore
- The Inco men are back
- Vox: Hunting for more in Canada's diamond fields
And, read our Streetwise blog and Your Business section