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At the open: TSX edges up as commodities firm; profit-taking hits RIM

Macquarie, Fox River join Canadian algo trading business


North American stock markets were close to unchanged in early trading, with U.S. indexes erasing mild losses from the open and the TSX posting a modest advance with the help of higher commodity prices.

In early trading, the S&P/TSX composite index was up 36 points, or 0.2 per cent, at 12,895. Gold was on the rebound, up $15 at $1,593 an ounce, thanks to a stronger U.S. dollar and short-covering activity; oil was up 93 cents at $92.99.

Shares in Research In Motion Ltd. initially opened up about 3 per cent, but quickly turned in the other direction, and were last trading down 3.5 per cent. Shares in RIM rallied nearly 14 per cent on Monday amid fresh takeover speculation and news it will start selling the new BlackBerry Z10 smartphone in the U.S. on March 22. The speculation was sparked by a comment from the head of China's Lenovo Group Ltd., who said he might consider such an acquisition in the future.

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In the U.S., the Dow Jones industrial average was up 23 points, or 0.1 per cent, at 14,468; the S&P 500 was unchanged.

The Dow has gained more than 10 per cent this year, and the longevity of the run-up in U.S. stock values has many thinking a pullback is overdue. Yet, there's little indication market players are panicking over such a prospect: the CBOE Volatility Index - the so-called fear index - on Monday hit its lowest level since February of 2007 and is down 36 per cent so far this year. That could be taken as a bearish sign, however. Historically, low volatility combined with fresh highs in the S&P 500 has often preceded a market downturn.

The backdrop today wasn't particularly supportive for stocks. New data this morning showed U.K. industrial production falling 1.2 per cent in January from December, disappointing economists who were expecting a rise of 0.1 per cent. In Asia, the Japanese yen strengthened and the Nikkei fell after a government opposition member said he would oppose the nomination of Kikuo Iwata as deputy governor of the central bank, throwing some doubt into whether the strong supporter of greater monetary stimulus would get the job.

There was little in the way of U.S. or Canadian economic data this morning. Meanwhile, the latest round of U.S. budgetary battles is only just beginning. Republicans in the House of Representatives today are expected to introduce a plan to cut $4.6-trillion (U.S.) in spending over the next decade. Democrats in the Senate are scheduled to reveal their own plan later this week that will mix tax hikes with spending cuts.

Here's a look at some other stocks moving on news this morning:

Apple Inc. shares are down 0.2 per cent after Jefferies analyst Peter Misek slashed his price target on the tech company to $420 (U.S.) from $500. His latest supplier checks pointed to continued weakness in iPhone sales and he sees a 25 per cent chance Apple will miss its guidance for the first quarter.

First Quantum Minerals Ltd. is extending its $5.1-billion hostile takeover bid for Inmet Mining Corp. another 10 days until March 21. Its previous deadline expired at midnight Monday with some 61.45 per cent of outstanding Inmet shares having been tendered to the offer. Inmet shares opened up 2.3 per cent.

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Talisman Energy Inc. has struck a deal to scrap the platform at its troubled Yme oil project in the Norwegian North Sea. Shares are up 0.3 per cent at the open.

Leon's Furniture Ltd. and The Brick Ltd. said a key hurdle has been overcome in The Brick's plan to take over its rival and the deal is now expected to close on March 28.

Costco Wholesale Corp. shares are up 1.6 per cent after its latest earnings beat Street estimates, although its revenues fell a little short.

Yum Brands Inc. was up 4 per cent after the restaurant chain owner said first-quarter same-store sales were down less than estimated.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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