Toronto Slumps on Resource Weakness

Toronto Slumps on Resource Weakness

Wednesday, December 29, 4:15 PM EST (Thomson Financial): Canadian stocks ended the first session after a long holiday weekend lower. Trading volumes were razor thin as many traders have already closed their books for the year and there was a dearth of news to push people back into the markets. Energy and gold shares were among the leading decliners, with other resource issues posting losses as well. Financial and consumer discretionary shares advanced.

* The S&P/Toronto Stock Exchange Composite Index fell 58.32 points, or
0.63%.

* Energy stocks tumbled, as the sector played catch up after the holiday.
Oil prices tumbled sharply on Monday, as forecasts for more mild
weather in the U.S. could reduce demand for heating oil and alleviate
some of the pressure on supplies. Still, oil prices jumped today, as
the weekly U.S. inventory data proved to be more bullish than expected.
Crude oil stockpiles declined by 800,000 barrels in the latest week,
while distillate stocks also fell by 800,000. Gasoline inventories rose
by 900,000 for the week.

* Turning to corporate news, PetroKazakhstan said that production of
Turgai Petroleum, its 50% joint venture with Lukoil, has been
temporarily curtailed as a result of non compliance by the management
of Turgai with existing agreement on marketing. Historically,
PetroKazakhstan Kumkol Resources, as operator of the Kumkol South
field, and Turgai Petroleum, as operator of the Kumkol North field,
have shared the supply of the domestic market in proportion to their
production.

* Gold stocks also took a hit, as the price of the yellow metal fell on
some renewed strength in the U.S. greenback. Trading has been light in
the commodity markets due to the holidays, and as many big players have
already closed out their books for the year.

* Elsewhere, aluminum giant Alcan said it has paid Powerex, a subsidiary
of B.C. Hydro, US$110 million to settle a claim associated with the
collapse of Enron in late 2001 and the Kemano Completion Project.
Additionally, Alcan has advised B.C. Hydro that it was providing a
five-year notice of the recall of the 140 megawatts of power it sells
to B.C. Hydro under the Long Term Electricity Purchase Agreement. Alcan
will record a pretax charge of US$10 million to income in the fourth
quarter of 2004.

* In other news, Rogers Media, a unit of Rogers Communications, announced
that it has acquired the 20% interest in Rogers Sportsnet held by Fox
Sports Net Canada Holdings, an affiliate of Fox Cable Networks, for
C$45 million. Sportsnet was developed and launched in 1998 by Rogers,
CTV and Fox, and with the acquisition of the 20% stake, Rogers now owns
100% of the network.

* Out of the transportation group, WestJet Airlines is reportedly
considering halting next year's expansion plans and switching attention
to cutting costs by retiring most or all of its fleet of 15 older
Boeing 737-200 aircraft. The carrier will be taking delivery of 15 new
737s next year.

* Technology stocks sank, as there was no local news to direct trading,
and there were limited developments out of the U.S. U.S. software
stocks were active after Oracle said it has assumed control of
PeopleSoft now that approximately 75% of PeopleSoft shareholders have
tendered their shares. Earlier this month, PeopleSoft agreed to be
bought by Oracle for US$10.3 billion following an 18-month takeover
battle.

* Looking at U.S. economic data, existing home sales for November rose
2.7% to an annual rate of 6.94 million units. Analysts were looking for
a 0.3% increase in the month. Inventory of unsold homes was unchanged
at 4.3 months' supply.

-- Justin.Menza@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. 29


Source: Thomson Financial Corporate Group

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


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