Bay Street Little Changed Amid Mixed Trading

Bay Street Little Changed Amid Mixed Trading

Tuesday, January 11, 2005, 4:15 PM EST (Thomson Financial Corporate Group): Toronto stocks finished slightly down, amid mixed sector performances. Gold, energy, mining and material shares posted gains, despite a disappointing financial report from U.S.-based Alcoa. Nevertheless, domestic rival Alcan leapt. Meanwhile, Nortel Networks advanced following the release of its audited 2003 results. Also, investors await Intel's quarterly release, due out after the closing bell. Healthcare, telecom and real estate issues slumped. Elsewhere, in Alberta, a case of mad-cow disease was found in a cow after feeding restrictions designed to stop the spread of BSE were introduced.

* The S&P/Toronto Stock Exchange Composite Index slipped 6.14 points, or 0.07%.

* Topping headlines in the material space, U.S. Dow component Alcoa posted a lower fourth-quarter profit, while earnings from continuing operations missed the mean Thomson First Call estimate. Greenback weakness and higher input costs pressured margins during the period. Elsewhere, Goldman Sachs was bullish on Alcan. Separately, Alcan plans to invest US$55 million in two Russian packaging plants. Alcan soared higher.

* Gold shares and the yellow metal finished higher, deriving support from U.S. dollar weakness against the euro. Kinross Gold announced last night that its president and chief executive will step down after the April 27 annual general meeting. Elsewhere, Wheaton River Minerals and Goldcorp were active. Yesterday, three Goldcorp directors abstained from voting to recommend their firm's takeover of Wheaton River Minerals to their shareholders.

* Meanwhile, oil prices finished higher on the session. In corporate resource reports, Talisman Energy has set a record C$3.1 billion exploration and development program for 2005, 15% above the 2004 level. Also, LionOre Mining surged, after Canaccord upgraded the stock and raised its target. The paper and forest product industries were under selling pressure. National Bank reduced its price targets on Abitibi-Consolidated to C$8.00 from C$9.10 and Domtar to C$16.50 from C$19.00. Also, CIBC World Markets downgraded the steel industry, as its 2004 gains are unlikely to be repeated in 2005.

* In technology headlines, Nortel Networks posted its audited 2003 results. The telecom equipment maker reduced its 2003 profit to US$434 million, or US$0.10 a share, from US$732 million, or US$0.17 a share. The firm's 2003 revenue was US$10.2 billion, compared to its previous reported result of US$9.81 billion. Nortel also said that 12 board members will refund US$8.6 million in bonuses that were connected to the 2003 results.

* Outside of Canada, Advanced Micro Devices anticipates significantly lower fourth-quarter operating income on a sequential basis. Various brokerages downgraded the stock in response. Also, European chip maker STMicroelectronics said its gross margin for the quarter to December 31 was about 36.6%, below its forecast range of 38% to 39%, due partly to the weak dollar and price pressure. Domestic chip issues slumped. Meanwhile, Hewlett- Packard suffered a downgrade from Morgan Stanley.

* Financial stocks moved lower on the session. CI Fund Management said that its third-quarter net income rose to C$0.14 a share from C$0.06 a share last year. EBITDA arrived at C$87 million versus C$81.4 million a year ago. Revenues advanced to C$258.8 million, compared with C$173.4 million. Subsequently, National Bank downgraded CI Fund Management.

* Within the staple sector, Ian Molson, who controls 11% of the Molson voting stock, said that he "evaluated the Molson/Coors proposal carefully and have concluded that this is a bad transaction for Molson shareholders." Shareholders from both brewers are scheduled to vote on the merger on January 19.

* Elsewhere, CanWest Global Communications posted net earnings of C$35. 4 million, or C$0.20 a share, compared to last year's C$81.5 million, or C$0.46 a share. Excluding charges, the firm would have earned C$100 million. CanWest's revenue advanced 9% to C$872.6 million.

* On the economic front, housing starts declined 3.4% in December to an annual rate of 234,400, compared with 242,600 in November. Economists expected housing starts would arrive at 229,500 in December. Also, Canada Mortgage and Housing Corp. said that it sees the housing market slowing in 2005.

-- 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 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 -- Jan. 11


Source: Thomson Financial Corporate Group

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


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