Canadian Market Edges Higher

Canadian Market Edges Higher

Friday, December 3, 2004, 4:15 PM EST (Thomson Financial Corporate Group): Canadian shares managed to post modest gains, thanks to a rally in telecom issues and strength in the gold and energy sectors. Telus surged, on Verizon's sale of its stake in the firm. Still, some disappointing November employment data from both sides of the border curtailed more robust market strength and fueled speculation that the Bank of Canada will hold interest rates steady next week. Also, an encouraging mid-quarter update from U.S.-based Intel failed to inspire broader tech buying.

* The S&P/Toronto Stock Exchange Composite Index advanced 17.17 points,
or 0.19%.

* In economic headlines, November's unemployment rate rose to 7.3% from
7.1% in October. Economists expected the jobless rate to remain
unchanged at 7.1% in November. The economy also created a disappointing
4,600 jobs last month.

* South of the border, non-farm payrolls grew by 112,000 in November
following a 303,000 increase the prior month. The unemployment rate
eased to 5.4% from 5.5% in October. While the jobless rate matched
expectations, the payroll increase was below the 200,000 gain predicted
on the Street. Separately, the ISM services index for November climbed
to 61.3, compared to 59.8 in October.

* Tech issues slid lower, although Intel's upbeat mid-quarter report
bolstered chip issues. Intel boosted its fourth-quarter revenue
guidance due to robust demand for its architecture products.
Additionally, Intel said it is making progress on inventory reduction.
On the down side, Wachovia Securities reduced Oracle and SAP to "market
perform" from "outperform" due to share appreciation. Also, Nokia
declined, after the Finnish telecom equipment giant said two key
executives will leave its networks business.

* Telus strongly led the telecom sector higher, after the price was set
for the sale of Verizon Communications' 20.5% stake in the phone
company. Underwriters will offer Verizon's 48.55 million Telus common
shares for C$31.02 and its 24.94 million non-voting Telus shares for
C$29.55 each. In research, BCE Inc. advanced, after RBC upgraded the
firm to "outperform" from "sector perform."

* Turning to the healthcare sector, Biomira and Merck KGaA said that more
than half of a group of patients treated in a Phase II clinical trial
with their BLP25 liposome vaccine for non-small cell lung cancer are
still alive nearly two years after trial enrollment. The firms intend
to discuss a Phase III multinational registration trial with regulatory
authorities next year. Biomira soared in response.

* In material reports, UBS downgraded Alcan and U.S.-based Alcoa to
"neutral" from "buy," partly due to valuation concerns and rising
costs. Elsewhere, South American Gold and Copper Co. announced that its
chairman and co-founder, John C. Duncan, has died. The firm appointed
Paul J. DesLauriers as chairman.

* Gold shares rallied, following the yellow metal higher. Gold was
supported by a steep decline in the greenback against the euro,
following a disappointing U.S. employment report. Also, traders may
have sought a safe haven, following reports of explosions in Madrid.
Meanwhile, oil prices declined further and finished beneath US$43 a
barrel; however, losses were curtailed after a senior OPEC delegate
said the group could not rule out cutting production if prices continue
to slide.

* Elsewhere, CFM Corp. tumbled amid heavy trading, after warning that
lenders have not renewed its revolving credit. Still, the firm said it
has secured interim financing until January 31, 2005 and the lender is
also considering an extension to the available credit to at least the
end of February 2005.

* In financial news, RBC downgraded Canadian Imperial Bank of Commerce to
"sector perform" from "outperform." Yesterday, CIBC posted
weaker-than-expected quarterly results. Elsewhere, Credit Suisse First
Boston Canada was fined C$1.5 million for improperly trading shares of
BCE Inc. "off a marketplace" in April 2003 and for failing to maintain
a complete and accurate audit trail.

-- Linda.Shea@thomson.com; Thomson Financial Corporate Group



This is Thomson Financial Corporate Group's Canadian Commentary, which is updated twice daily. The information herein is believed to be true and accurate, we take no responsibility for inaccurate information and reserve the right to update our reports. For more financial information at your fingertips, please visit www.irchannel.com. If you have any questions please e-mail James Sang at james.sang@tfn.com or call 646.822.6233. For more information about Thomson Financial visit us on-line at http://www.thomsonfinancial.com/ .

PRNewswire -- Dec. 3


Source: Thomson Financial Corporate Group

Web site: http://www.irchannel.com/

Web site: http://www.thomsonfinancial.com/


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