Toronto stock in­dex slightly down

Cape Breton Post - - Business - BY DAVID HODGES

Canada’s main stock in­dex edged lower Mon­day as gains in Vere­sen, which is be­ing ac­quired by com­peti­tor Pem­bina Pipe­line, were off­set by con­tin­ued losses in Home Cap­i­tal Group Inc. shares.

The Toronto Stock Ex­change’s S&P/TSX com­pos­ite in­dex was down a mod­est 10.50 points to 15,575.63.

Vere­sen (TSX: VSN) shares soared by about 19 per cent at the close, adding $2.90 to $18.13, af­ter it re­ported it was be­ing taken over by Pem­bina in a friendly deal worth $9.7 bil­lion.

“That’s pro­vided some op­ti­mism on a day when crude oil prices are down a little bit and there would other­wise be some pres­sure on the en­ergy space,’’ said Craig Fehr, a Cana­dian mar­kets strate­gist at Ed­ward Jones in St. Louis.

On the opposite side of the ledger was Home Cap­i­tal, whose stock sank by 13.43 per cent, los­ing $1.08 to $6.96, af­ter it said it ex­pects to draw $1 bil­lion from its $2 bil­lion line of credit pro­vided by the Health­care of On­tario Pen­sion Plan.

The Toronto-based mort­gage lender has seen its stock price tum­ble over the last sev­eral days fol­low­ing al­le­ga­tions from On­tario’s securities watch­dog that it mis­led in­vestors. Home Cap­i­tal has said the al­le­ga­tions are with­out merit and com­mit­ted to de­fend it­self against them.

Eq­ui­table Group Inc. (TSX: EQB), a main com­peti­tor of Home Cap­i­tal, was up nearly 30 per cent at Mon­day’s close, gain­ing $10.86 at $47.35, af­ter it ar­ranged up to $2 bil­lion in standby credit from a syn­di­cate of Cana­dian banks.

“If you look at the TSX, it’s kind of a mix of pos­i­tives and neg­a­tives to­day,’’ Fehr said.

In New York, mar­kets were also rel­a­tively flat af­ter U.S. Congress agreed to a deal that will keep the gov­ern­ment op­er­at­ing for the rest of the fis­cal year.

“The news over the week­end that they were able to avert the loom­ing shut­down was cer­tainly good news but I don’t know if it was enough to get the mar­ket to rally,’’ Fehr said. “I think the much big­ger pol­icy changes that are on deck are cer­tainly get­ting much more of the at­ten­tion, be it tax re­form or the po­ten­tial for in­fra­struc­ture spend­ing.’’

The Dow Jones in­dus­trial av­er­age lost 27.05 points to 20,913.46, while the S&P 500 in­dex added 4.13 points to 2,388.33. The Nas­daq com­pos­ite in­dex was up 43.99 points to 6,091.60, a record high.

The daily av­er­age for the Cana­dian dol­lar was 73.21 cents US, up 0.01 of a cent from Fri­day.

In com­modi­ties, the June crude con­tract lost 49 cents at US$48.84 per bar­rel, the June nat­u­ral gas con­tract gave back six cents at US$3.22 per mm BTU and June gold re­treated $12.80 to US$1,255.50 an ounce. July cop­per was up five cents at US$2.66 a pound.

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