Bay Street Rallies Amid Broad Market Strength

Bay Street Rallies Amid Broad Market Strength

Tuesday, January 18, 2005, 4:15 PM EST (Thomson Financial Corporate Group): Toronto issues surged on the session, bolstered by resource, technology, telecom and real estate shares. Canada's southern neighbors also witnessed a sharp uptick on a robust earnings release from Bank of America and a US$2.3 billion deal between MeadWestvaco and Cerberus Capital Management. Investors are looking forward to earnings from International Business Machine, Motorola and Yahoo, due out after the close.

* The S&P/Toronto Stock Exchange Composite Index surged 70.93 points, or
0.78%.

* Oil prices finished little changed, after topping US$49 a barrel early
this morning. Two senior OPEC officials indicated that the cartel would
not reduce production if global prices remain high. Turning to research,
Smith Barney started coverage of Petro-Canada at "hold."

* Elsewhere in energy, Husky Energy said that its fourth-quarter net
profit fell to C$0.52 a share from C$0.59 a share, landing below the
mean Thomson First Call estimate. Cash flow declined to C$1.10 a share
from C$1.32 a share. Meanwhile, Find Energy said that its 2004 output
landed beneath its prior targets due to disappointing drilling and
production results. First Energy also lowered its 2005 capital spending,
drilling and production targets.

* Gold shares followed the yellow metal higher, despite greenback strength
against the euro. Traders may be moving into safe-haven territory ahead
of the Iraqi elections at the end of the month. Amid other metal
reports, Ivanhoe Mines said that the Inner Mongolia Bureau of Geology, a
joint venture that it leads, has won the Chinese government's approval
for six exploration licenses in Mongolia.

* Alcan warned late this past Friday that its fourth-quarter operating
earnings will land about 30% below its third-quarter result of US$0.74 a
share. A weaker greenback was part of the reason for the warning, as
Alcan reports in U.S. dollars, but pays certain expenses in Canadian
dollars and other currencies.

* Nexen is preparing to spin off its chemical division as an income trust
that could be valued up to C$800 million, according to Globe and Mail
sources. Nexen will use the proceeds to finance its international
expansion.

* Telecom issues surged. Telesystem International Wireless announced
yesterday that its operating subsidiaries MobiFon S.A. and Oskar Mobil
exceeded 6.7 million subscribers as of the end of December 2004. This
morning, Orion raised Telesystem's price target to US$19 from US$16.

* Technology stocks leapt. Nortel Networks expects to file its unaudited
financial statements for the first and second quarters of 2004 by the
end of January, soon followed by unaudited statements for the third
quarter of 2004. Elsewhere, JDS Uniphase warned that its second-quarter
loss will widen, and its revenue will land at the lower end of prior
guidance, due to a decline in revenue from a key customer. Separately,
TD Newcrest upgraded Sierra Wireless to "speculative buy" from "hold,"
ahead of its fourth-quarter earnings release, due out January 26.

* Within the chip space, Mosaid Technologies said it settled its patent
dispute with Samsung Electronics. Mosaid Technologies slumped; however,
as some traders are unclear about the settlement's impact on the firm's
future financial results. In personnel news, ATI Technologies appointed
Patrick Crowley as chief financial officer and senior vice president for
finance.

* In deal reports, Cedara Software and Merge Technologies agreed to merge
in an all-stock deal that values Cedara at about C$15.10 a share.

* The staple sector was a weak spot on the market. Coolbrands
International posted another decline today, after the firm posted
disappointing first-quarter results yesterday.

* Turning to economic releases, the leading indicator edged up 0.2% to
200.9 in December from 200.4 in November. Economists expected the index
to rise 0.1% in the December reading. South of the border, the Empire
State Manufacturing Index eased to 20.1 in January from 27.1 the prior
month, well below the expected reading of 25.5.

-- 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 -- Jan. 18


Source: Thomson Financial Corporate Group

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