Resources Slam Canadian Shares

Resources Slam Canadian Shares

Tuesday, December 7, 2004, 4:15 PM EST (Thomson Financial Corporate Group): Canadian stocks declined under the weight of resource weakness. Energy stocks led the pack lower, as oil prices fell to a level below US$42 a barrel. Gold, mining and material shares also posted notable declines. Elsewhere, the Bank of Canada kept interest rates unchanged at 2.5%, amid a surging loonie.

* The S&P/Toronto Stock Exchange Composite Index slumped 69.75 points, or
0.77%.

* In economic headlines, the Bank of Canada held interest rates steady
and commented, "If exchange rates were to persist at current levels,
and if all other economic and financial factors were to remain
unchanged, there would be a dampening effect on aggregate demand for
Canadian goods and services." South of the border, non-farm business
productivity grew at a seasonally adjusted annual rate of 1.8% in the
third quarter, below expectations for a 2% increase.

* In corporate resource reports, Iamgold tanked on the session, after a
majority of Gold Field's shareholders rejected that firm's plan to
merge its non-southern African assets with Iamgold. Elsewhere, Aber
Diamond and Tiffany & Co. will change their share subscription and
diamond sales agreements, including the elimination of a market price
discount previously applied to diamond sales by Aber to Tiffany. Also,
Tiffany sold its 13.9% stake, or eight million shares, of Aber for
about US$268 million.

* Turning to research, CSFB raised its rating on Goldcorp to "neutral"
from "underperform," while Research Capital upgraded the firm and
raised its price target. The research follows recent news that Goldcorp
will purchase Wheaton River Minerals. Also, BMO downgraded Canadian
Natural Resources to "market perform" from "outperform" and cut its
price target to C$51 from C$58.

* Oil prices took another steep fall today, amid expectations for a build
in distillate stocks in tomorrow's weekly U.S. inventory report. Gold
shares followed the yellow metal lower in a bout of profit-taking.

* In tech news, Nortel Networks leapt, after it received a contract
renewal from Sprint Corp. worth about US$1 billion over three years.
Separately, Zarlink Semiconductor declined sharply, after the firm
warned of a wider-than-expected third-quarter loss of US$0.05 to
US$0.06 a share, compared with its prior estimate for a deficit of a
penny to US$0.03 a share.

* Research In Motion gained some ground, after Lehman Brothers lifted the
firm's price target to US$95 from US$90, due to expectations for higher
subscriber growth. National Bank also lifted its price target on RIM to
US$113 from US$93. Out of the U.S., Deutsche Bank downgraded Advanced
Micro Devices to "hold" from "buy," citing the stock's 130% rise since
early September.

* WestJet Airlines declined, after it announced that its load factor for
November declined to 58.5% from 64.1% a year earlier. Subsequently,
Dlouhy Merchant downgraded WestJet to "hold" from "buy." Meanwhile, Air
Canada's load factor advanced to 74.6% in November from 69.2% a year
prior. Separately, Bombardier said it will de-list its Class B shares
from the Frankfurt and Euronext Brussels stock exchanges.

* Within the financial group, Manulife Financial surged, after it boosted
its cost savings target for its merger with John Hancock Financial
Services to US$325 million from US$255 million. Separately, the
Investment Dealers Association reached an agreement with the brokerage
units of Royal Bank of Canada, Bank of Montreal and Toronto-Dominion
Bank to settle market-timing charges.

* Turning to healthcare reports, Smith Barney initiated coverage on
Biovail with a "buy" rating. Southside, Johnson & Johnson is in
advanced talks to acquire medical device maker Guidant for more than
US$24 billion.

* Also, Onex Corp. is set to acquire Laidlaw International's American
Medical Response and EmCare for approximately C$980 million.

-- 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. 07


Source: Thomson Financial Corporate Group

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


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