Energy Stocks Support Canadian Market In Early Trading

Energy Stocks Support Canadian Market In Early Trading

FRIDAY, December 10, 2004, 10:15 AM EST (Thomson Financial Corporate Group): Canadian stocks are receiving a boost from energy issues, which are deriving strength from rising oil prices after OPEC delegates agreed to cut production. The tech sector is benefiting from some upbeat U.S. research reports. Also, south of the border, traders are eyeing a higher-than-expected PPI report.

* The S&P/Toronto Stock Exchange Composite Index is advancing 16.59
points, or 0.18%.

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

* Investors are rotating into energy, mining, technology, telecom and
real estate stocks, and out of gold, financial and cyclical issues.

* In economic reports, capacity use was 85.7% in the third quarter, up
from a revised 84.7% in the second quarter. Economists expected
capacity use of 85.2% in the most recently reported quarter.

* South of the border, the producer price index rose 0.5% in November,
down from a 1.7% increase in October. The core index, which excludes
food and energy items, rose 0.2%, down from a 0.3% rate in October.
Analysts had forecast a 0.1% increase in the overall index and a 0.2%
gain in core prices. The University of Michigan's preliminary reading
for December arrived at 95.7 from 92.8 in November.

* Oil prices are gaining ground this morning, after the Organization of
Petroleum Exporting Countries announced that the group agreed to
withdraw one million barrels daily of surplus production. Gold shares
and the yellow metal are moving lower, prompted by a rising greenback
versus the euro. The U.S. dollar is strengthening, in part, on
expectations the U.S. Federal Reserve will raise interest rates next
Tuesday.

* U.S. tech stocks received some positive research. CSFB upgraded Ciena
to "neutral" from "underperform," citing the company's strong fiscal
fourth-quarter operating performance. Meanwhile, Thomas Weisel boosted
chip maker Nvidia to "outperform" from "peer perform," due in part to
an improved margin outlook and new opportunities in Intel chipsets.

* In telecom reports, Bell Canada signed a C$140 million deal with
Manulife Financial, spanning seven years, for fully outsourced Internet
protocol-based network management.

* Elsewhere, Manitoba Telecom Services expects stronger financial results
next year, thanks to its merger with Allstream. The firm sees revenue
growing 2% to 4% in 2005 and earnings per share rising by 7% to 11%.
2005 earnings before interest, taxation, depreciation and amortization
are expected to grow 5% to 7%.

* In U.S. deal reports, The Wall Street Journal reported that Johnson &
Johnson is close to an agreement to buy medical device maker Guidant
for about US$24 billion in cash and stock. Also, Sprint and Nextel
Communications continue to rise on reports they may merge.

* Turning to staple deal news, Molson Inc. and Adolph Coors will hold a
shareholder meeting on January 19 to vote on their proposed merger. If
the deal is approved, final court approval will be sought on January 21
and a closing date is seen on January 28.

-- 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. 10


Source: Thomson Financial Corporate Group

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


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