Resources Drag Canadian Stocks Lower

Resources Drag Canadian Stocks Lower

Thursday, December 2, 2004, 10:15 AM EST (Thomson Financial Corporate Group): The Canadian market is pulling back modestly this morning, following yesterday's healthy gains. A dip in oil prices to below US$45 a barrel is weighing on energy stocks. Gold shares are also under pressure. Additionally, investors await financial results from Canadian Imperial Bank of Commerce and National Bank of Canada, due out later today. Looking ahead, Intel's mid- quarter update is due after the close, while monthly employment data from both sides of the border is set for release tomorrow morning.

* The S&P/Toronto Stock Exchange Composite Index is slipping 6.85 points,
or 0.08%.

* Yesterday, the S&P/Toronto Stock Exchange Composite Index surged 34.42
points, or 0.38%.

* Oil prices are continuing to sell off this morning and are now trading
below US$45 a barrel. Prices are under pressure due to remarks from an
OPEC official signaling the group will likely keep production at current
levels when it meets next week and yesterday's unexpectedly robust U.S.
inventory data.

* Meanwhile, gold shares are tumbling this morning, after the yellow metal
declined from earlier fresh 16 1/2 year highs on a rebounding U.S.
dollar. Weakness in individual gold stocks is also pulling the sector
lower. UBS downgraded Teck Cominco to "neutral" from "buy" but raised
its price target to C$39 from C$35.

* In precious metal deal reports, Barrick Gold said that it will invest
C$28 million in Celtic Resources Holdings PLC for a 9% stake in the firm
through the purchase of 3.7 million Celtic ordinary shares and 1.84
million Celtic ordinary share purchase warrants. Separately, South
Africa's Harmony Gold said that it will use its 11.8% stake in Gold
Fields to vote against a proposed merger between Iamgold and Gold
Fields. Also, Bolivar Gold Corp. is active, after it announced plans to
sell 9.1 million stock-warrant units at C$2.20 each.

* In technology headlines, BCE Emergis changed its name to Emergis, as BCE
Inc. sold its stake in the firm earlier this year. Emergis also forecast
2005 revenue between C$155 million and C$165 million and EBITDA between
C$18 million and C$23 million. On a per share basis, the firm sees a
loss of C$0.04 to a profit of C$0.03. Turning to research, Jefferies
slashed its rating on Open Text to "underperform" from "hold."

* Meanwhile, Nortel Networks is jumping higher in early trading. BT
selected Nortel's Internet Protocol telephony and contact center
solutions to upgrade its contact center infrastructure. The contract is
worth US$5 million.

* Within the industrial group, brokerages responded to Bombardier's
quarterly results, which were released yesterday. CIBC, TD and RBC cut
their price targets on the firm, with TD also slashing its rating to
"reduce" from "hold." Elsewhere, National Bank lifted its rating and
price target on Bombardier. Lehman Brothers lowered its stance on
air/ground transports to "negative" from "neutral." The brokerage also
downgraded Canadian Pacific to "underweight" from "equal-weight."

* Turning to the healthcare space, Inex Pharmaceuticals is plunging this
morning. Last night, a U.S. Food and Drug Administration panel
unanimously rejected recommending approval for Inex Pharmaceuticals and
Enzon Pharmaceutical's new drug to treat relapses of non-Hodgkin's
lymphoma. The panel said that patients' limited response to Marqibo was
not strong enough to warrant an expedited approval by the FDA. This
morning, numerous brokerages downgraded Inex and slashed its price
target.

* On the economic front, the European Central Bank kept interest rates
unchanged at 2%. In the U.S., weekly initial jobless claims jumped by
25,000 to 349,000 from an upwardly revised 324,000. A 7,000 increase had
been predicted. Also, factory orders rose 0.5% in October from a revised
flat reading in September.

-- 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. 2


Source: Thomson Financial Corporate Group

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


-------
Profile: intent