TSX buoyed by news of eye-care deal

The Toronto Stock Exchange closed slightly ahead Friday, pulled down by declines in most sectors, particularly gold, but boosted by a 13 per cent spike in shares of Valeant Pharmaceuticals International.

The S&P/TSX composite index finished up 9.13 points at 12,667.22.

According to reports, Valeant is close to a $9-billion deal to acquire eye-care company Bausch & Lomb Holdings Inc. from Warburg Pincus LLC. Valeant shares were up $10.18 at $87.02.

On Wall Street, markets were mixed after being down for most of the day. The Dow Jones industrials average saw an uptick of 8.60 points to 15,303.10, but the Nasdaq lost 0.28 of a point to 3,459.14 and the S&P 500 dipped 0.91 of a point to 1,649.60.

The Canadian dollar was down 0.25¢ at US96.89¢.

On Friday, the U.S. Commerce Department reported better-than-expected durable goods orders in April that suggested encouraging news for U.S. manufacturers.

The department said orders rose 3.3% last month after a 5.9% decline in March and more than double the 1.5% increase predicted by analysts. It says the figure was buoyed by more demand for military and civilian aircraft and an increase in business investment.

But the news was not enough to reverse Thursday’s declines, which had been prompted by weak Chinese manufacturing data and worries that the U.S. Federal Reserve might start withdrawing monetary stimulus sooner than expected.

Jennifer Radman, a portfolio manager with Caldwell Securities Ltd., said it was not surprising that the U.S. markets showed little reaction to the durable goods figures. “At this point, we’ve had such a strong run in the market ... so I think a lot of people are expecting a downturn,” she said.

Radman said some stocks in her portfolios have risen up to 20% in the past month and perhaps investors are now speculating more about how long those highs might be able to last. “I think the markets sometimes use different news items as an excuse to take money off the table,” she said. “It might just be a bit of profit-taking. It sort of happens when the market has had such a strong run.”

Earlier this week, Fed chairman Ben Bernanke said the central bank does not plan on scaling back or ending its stimulus now but will consider it as early as next September. Many analysts had expected the stimulus to continue into 2014.

The Fed has been buying US$85 billion worth of bonds every month to keep interest rates low and encourage investors to put money into stocks and other risky assets.