Bay Street Snaps Back

Bay Street Snaps Back

Friday, January 14, 2005, 10:15 AM EST (Thomson Financial Corporate Group): Toronto issues are moving higher this morning, supported by most sectors. In major corporate reports this morning, Molson and Adolph Coors have sweetened their deal for the second time. U.S. tech reports are in focus, particularly Sun Micro and Cree's financial releases. Also, investors are digesting economic reports from both sides of the border.

* The S&P/Toronto Stock Exchange Composite Index is jumping 34.97 points,
or 0.39%.

* Yesterday, the S&P/Toronto Stock Exchange Composite Index declined
13.57 points, or 0.15%.

* Investors are rotating into material, mining, technology, staple,
cyclical and industrial issues, and out of gold shares.

* On the economic front, new auto sales declined 3.1% to a seasonally
adjusted 131,978 in November from 136,231 in October. Economists were
looking for a steeper fall of 3.6% in the November reading. South of the
border, the producer price index fell 0.7% in December, while the core
index rose 0.1%. Economists had forecast a 0.2% decrease in the overall
index and a 0.2% gain in core prices. Industrial production rose 0.8% in
December, while capacity use advanced to 79.2%. Both figures exceeded
economist forecasts.

* Within the staple group, Molson Inc. and Adolph Coors again sweetened
their proposed deal for Molson shareholders. The firms agreed to increase
the special dividend to holders of Molson class A non-voting shares to
C$5.44 a share, from a prior offer of C$3.26 a share. The total value of
the new dividend is C$640 million, up from the previous C$381 million.

* Technology shares are rebounding from sharp losses incurred yesterday.
South of the border, Sun Microsystems posted a second-quarter net profit
of a penny a share, reversing a year-earlier loss of US$0.04 a share.
However, revenues fell slightly and missed the mean Street expectation.

* In the U.S. chip space, Cree posted a higher fiscal second-quarter
profit that met analyst expectations, but its revenue figure
disappointed. Cree also anticipates its current-quarter results missing
the mean Street forecast. Elsewhere, Applied Materials said it is cutting
up to 240 jobs but will try to place as many affected workers as possible
in new positions. UBS started coverage on the stock at "buy." That
brokerage also upgraded Flextronics International to "buy" from
"neutral."

* In cyclical news, Corus Entertainment is rallying, after National Bank
and BMO upgraded the stock. Shortly before the closing bell yesterday,
that firm posted a surge in its first-quarter profit, aided by cost
controls that overshadowed lower revenues.

* Gold shares are slipping this morning, as comments from the U.S.
president are bolstering the greenback. President Bush reiterated that
the U.S. government followed a "strong dollar policy," and would reduce
the U.S. deficit. Turning to research notes, CSFB upgraded Teck Cominco
to "outperform" from "neutral," boosting that stock. Meanwhile, oil
prices are receding, after reaching a six-week high yesterday.

* Turning to financial releases from the healthcare sector, Dimethaid
Research said that its second-quarter net loss widened to C$7.3 million,
or C$0.11 a share, from C$6.2 million, or C$0.14 a share, a year earlier.

-- 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. 14


Source: Thomson Financial Corporate Group

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


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