Canadian Market Turns Higher On Resource Strength

Canadian Market Turns Higher On Resource Strength

Thursday, December 9, 2004, 4:15 PM EST (Thomson Financial Corporate Group): Canadian stocks turned to the upside after initial weakness, bolstered by resource stocks. Higher oil prices boosted the energy sector, ahead of OPEC's meeting tomorrow. Technology stocks also witnessed a positive session, partly due to upbeat research on Nortel Networks. Still, a slide in the heavily-weighted financial sector curtailed further market gains. In other reports, Bank of Canada Governor David Dodge said that Canada should consider mergers among banks and insurers if it wants to compete effectively with world leaders.

* The S&P/Toronto Stock Exchange Composite Index rose 9.81 points, or
0.11%.

* Oil prices strengthened on the session, ahead of tomorrow's meeting
between OPEC oil producers, which could result in output cuts.
Ministers from Kuwait and the United Arab Emirates indicated that OPEC
members needed to honour output quotas to curtail oversupply and
falling prices. Separately, gold shares moved higher, despite weakness
in the yellow metal on greenback strength.

* In corporate resource reports, Domtar announced that it will close its
pulp and paper operations in Cornwall, Ontario, which will affect 390
jobs and curtail 150,000 tons of pulp production and 85,000 tons of
paper output. Domtar cited a weak U.S. dollar for the move. The firm
plans to cut an additional 400 jobs by the end of 2005.

* Separately, Cameco surged, after its board approved an increase in its
annual dividend to C$0.72 from C$0.60. The firm also announced a
three-for-one stock split of its outstanding common shares. Elsewhere,
Wheaton River Minerals was active, after Genoa Capital said in a letter
to the firm's board that Goldcorp's offer was "manifestly unfair."
Genoa Capital owns Wheaton River shares in various funds and accounts.
In research, BMO Nesbitt downgraded Ipsco to "market perform" from
"outperform" due to share price appreciation. Also, National Bank
lowered its stance on Abitibi-Consolidated to "sector perform" from
"outperform" and cut its price target to C$9.10 from C$11.

* Technology issues moved higher on the session. Nortel Networks was
upgraded to "outperform" from "market perform" by Friedman, Billings,
Ramsey, partly due to its recent contract with Sprint and the firm's
plan to file financial results early next year. Southside, Ciena
expects first-quarter revenue growth of 7% to 10% over the fourth
quarter.

* In U.S. chip reports. Xilinx expects sales to decrease 5% to 8%
sequentially in the latest quarter, compared with earlier guidance for
a decline of 2% to 6%. Also, Altera cut its fourth-quarter sales
target.

* Telecom stocks slipped. Bell Canada, a unit of BCE Inc., launched a
C$67 million bid to purchase Nexxlink Technologies in order to
strengthen its offerings to small and medium-sized businesses.

* In staple news, Cott Corp. last night named Robert J. Flaherty as
president of its U.S. business unit and executive vice president of
Cott Corp.

* Within the industrial group, last night, the Quebec government
announced that it will provide prospective customers of Bombardier with
an additional C$750 million in loan guarantees to help sales of the
plane and train maker's jets. Turning to research, National Bank raised
its rating on CP Ships to "outperform" from "underperform" and lifted
its target to US$15 from US$11.30. Separately, Merrill Lynch raised its
price target on Canadian National Railway.

* On the U.S. economic front, weekly initial jobless claims unexpectedly
rose by 8,000 to 357,000. Meanwhile, import prices edged up 0.2% in
November following a 1.6% jump in October, in-line with economist
expectations. Finally, wholesale inventories and sales strongly
advanced in October, with the inventories figure handily beating Street
expectations.

-- 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 http://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. 9


Source: Thomson Financial Corporate Group

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


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