After posting triple-digit losses yesterday, North American stock markets are poised to open lower Thursday as bond yields rose, and investors react to news that Canada’s two biggest telephone companies are in merger talks.
Telus Corp. confirmed today it is in merger talks with BCE, the parent company of industry leader Bell Canada.
Yields on 10-year U.S. Treasury notes rose to 5.14% from 5.12% ahead of the release of the Philly Fed index on manufacturing sentiment for June. The Philly Fed poll is due for release at noon ET.
The U.S. Conference Board’s measure of leading economic indicators for May is also due for release later this morning.
Earlier today, the U.S. Labor Department said weekly jobless claims rose to a two-month high last week, up 10,000 to 324,000 on a seasonally adjusted basis. Recent data suggests the strong momentum from May has waned in June.
The Canadian dollar opened at US93.73¢, up 0.01 of a cent.
Oil futures continued their recent climb, rising 66¢ to US$69.52 a barrel.
Gold futures fell $4.20 to US$655.80 an ounce.
In other M&A news, the board of Dow Jones said it was taking over negotiations with News Corp over a proposed US$5 billion buyout from the Bancroft family that holds a controlling stake in the publisher of The Wall Street Journal. Separately, MySpace founder Brad Greenspan said he’s willing to pay US$1.25 billion for 25% of Dow Jones shares in a tender offer.
In earnings news, H&R Block swung to a fourth-quarter loss as continuing troubles in the company’s mortgage lending arm outweighed higher revenue from the company’s tax and financial-services businesses.
Overseas, the Nikkei 225 closed up 0.2% in Tokyo trade, while the FTSE 100 dipped 0.4% in London.
Toronto stocks ended lower for a second straight session on Wednesday as slumping oil and gas prices weighed on resource issues.
The S&P/TSX composite index ended down 141.33 points, or 1%, to 13,978.16.
The loss stretched across almost all of the major sectors, with energy stocks leading the way, down 1.97%. The junior TSX Venture Exchange was down 2.69 points to 3,234.39.
In New York, lower oil prices appeared to have little positive impact stocks, as bond yields continued to rise.
The Dow Jones industrials ended the session down 146 points, or 1.07%, at 13,489.42. The Nasdaq composite index was down 26.8 points, or 1.02%, to 2,599.96, and the S&P 500 index dropped 20.86 points, or 1.36%, to 1,512.84.
