TORONTO — The Toronto stock market closed modestly higher Monday thanks to gains in tech stocks and the pharmaceutical sector.
The S&P/TSX composite index rose 28.02 points to 15,200.26, held back by falling oil prices and bank stocks that continued to lose ground ahead of the release of earnings news this week from a challenging quarter.
Shares of Valeant Pharmaceuticals International Inc. (TSX:VRX) jumped $32.72 or 15 per cent to $250.13 after it offered US$10 billion in cash for Salix Pharmaceuticals Ltd., a U.S.-based developer of gastrointestinal drugs. Valeant expects to achieve more than $500 million in annual cost savings for the combined company.
The Canadian dollar declined 0.19 of a U.S. cent to 79.52 cents.
New York markets were mainly lower with Federal Reserve chairwoman Janet Yellen set to deliver her semi-annual testimony on the economy to Congress on Tuesday and Wednesday. Traders will look for indications on when the Fed might start raising interest rates. Many analysts think the Fed could move as early as June.
The Dow Jones industrials dropped 23.6 points to 18,116.84 and the S&P 500 index was down 0.64 of a point at 2,109.66, while the Nasdaq gained five points to 4,960.97.
On the TSX, the tech sector gained 1.65 per cent, with CGI Group (TSX:GIB.A) ahead $3.22 or 6.15 per cent at $55.46.
The gold sector also buoyed the TSX, up 0.9 cent even as April gold lost $4.10 to US$1,200.80 an ounce.
Crude prices fell for a fourth straight session after data last week showed continued sharp increases in U.S. inventory levels. Prices have fallen about 40 per cent since the end of November amid a huge oversupply of crude on world markets.
The energy sector shed 0.63 per cent as the April crude contract in New York dropped $1.36 to US$49.45 a barrel.
Financials were down one per cent as five of the six big Canadian banks report quarterly earnings this week with Royal Bank (TSX:RY) down 88 cents to $75.13. The market hears from Scotiabank (TSX:BNS) next week.
The financial sector has been steadily losing ground over the last few sessions as banks face a number of problems “the most recent of which would be compression of net interest rate margins following the Bank of Canada’s rate cut,” said Mark Allen, vice-president, Canadian equities, RBC Wealth Management.
“But prior to that, there were concerns about Alberta, a slowing economy there or possibly a recession, which brings about the risk of higher loan losses in Western Canada, risk of higher credit card and personal loan losses in Western Canada (and) slower capital markets business because so much of it is related to resource stocks. And then all of this slowing mortgage growth trends.”
The base metals sector shed 1.6 per cent with March copper unchanged at US$2.59 a pound.
