Bay Street Tumbles In Early Trading

Bay Street Tumbles In Early Trading

Wednesday, January 12, 2005, 10:15 AM EST (Thomson Financial Corporate Group): Toronto stocks are securely in the red this morning, tacking on to yesterday's losses. Canada's trade surplus for November was much higher than expected, potentially adding to talk of a sooner-than-expected rise in interest rates. The heavily-weighted financial sector and real estate issues are currently plunging. South of the border, chip titan Intel posted stronger- than-expected earnings and provided a promising capital spending outlook for 2005.

* The S&P/Toronto Stock Exchange Composite Index is slumping 45.43 points,
or 0.50%.

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

* On the economic front, the trade surplus leapt to a near record C$7.3
billion in November. Economists expected a surplus of only C$4.35 billion.
October's surplus figure was upwardly revised to C$5.21 billion. Imports
plunged 10.2% to C$27.41 billion, boosting the surplus. Meanwhile, the
U.S. trade gap widened 7.7% to US$60.30 billion in November from an
upwardly revised US$56.00 billion in October. Economists had expected a
smaller deficit of US$53.60 billion in November.

* Topping U.S. chip reports, Intel posted a fourth-quarter profit of
US$0.33 a share, roughly in line with its earnings a year earlier, and
US$0.02 ahead of the mean Thomson First Call estimate. Sales were up 9.8%
to US$9.60 billion from last year amid strength across its businesses. For
the current quarter, revenues are expected to be between US$8.8 billion
and US$9.4 billion. In a positive sign for chip equipment makers, Intel
said capital spending for 2005 is expected to be between US$4.9 billion
and US$5.3 billion, well above the US$3.8 billion spent in 2004.

* Nortel Networks is giving back some of the gains earned yesterday, after
that firm released its financial restatements for 2003. Also, Desjardins
upgraded Nortel to "buy" from "hold," while National Bank and Scotia
lifted their price targets on the firm.

* Certicom Corp. is rallying, after it licensed its intellectual property
portfolio of patents to a unit of General Dynamics under a 15-year deal.

* Within the telecom group, Morgan Stanley initiated coverage of Telus
with an "overweight" rating and a US$31 price target. The brokerage cited
Telus' superior free cash flow as part of the reasoning behind the
coverage.

* CanWest Global Communications is continuing its advance this morning,
after CIBC, BMO and National Bank lifted the firm's price target,
following the firm's upbeat quarterly release, reported yesterday. Also,
CanWest CEO Leonard Asper said in a conference call yesterday that the
firm is considering a deal with Metro International SA to offer free
commuter newspapers in certain Canadian markets.

* Within the healthcare space, Dimethaid Research is jumping this morning.
The Globe and Mail reported that problems surrounding arthritis drugs
Vioxx and Celebrex may provide Dimethaid's Pennsaid with an opportunity
for greater market share. The firm is expected to report that Pennsaid
sales rose 11% in October and then 26% in November. Dimethaid's financial
results are due out this week.

* Gold shares are continuing their ascent this morning on the back of
greenback weakness versus the euro. In corporate reports, Cambior
announced record gold production of 694,100 ounces in 2004, a 33% leap
over 2003's figure. Separately, oil prices are on the rise ahead of the
U.S. weekly inventory reports, due out at 10:30 AM EST.

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. 12


Source: Thomson Financial Corporate Group

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


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