Canadian Issues Return Initial Gains

Canadian Issues Return Initial Gains

Monday, January 24, 2005, 4:15 PM EST (Thomson Financial Corporate Group): Bay Street moved lower on the session, as earlier strength from resources turned mixed later in the day. Gold and material stocks turned lower, while the energy sector remained upbeat on higher oil prices. In corporate reports, a warning from the chip group and pressure from Research In Motion weighed on the tech sector. South of the border, American Express' fourth-quarter earnings topped analyst expectations. Meanwhile, the Bank of Canada delivers its decision on interest rates tomorrow, which are widely expected to remain unchanged.

* The S&P/Toronto Stock Exchange Composite Index slipped 8.63 points, or
0.09%.

* Gold prices turned lower, after jumping higher in early trading and
despite strength in the yellow metal on greenback weakness. In
corporate news, Wheaton River Minerals said that Goldcorp extended its
bid for the company until February 14.

* Separately, oil prices rose, boosted by snowstorms across the Northeast
U.S. Also, continued violence in Iraq ahead of elections scheduled for
this Sunday and potential disruptions to Nigeria's oil output added
oils upward momentum. In research, CIBC downgraded Canadian Natural
Resource to "sector perform" from "outperform." Separately, TVI Pacific
was active, after the firm announced that its operating subsidiary in
China, Hunan Pacific Geological Exploration, was recently granted the
first qualified explorer license in China.

* Within the technology group, Nortel Networks and LG Electronics signed
a memorandum of understanding to establish a joint venture in which
they would provide telecoms and networking equipment for Korea and
other markets.

* Elsewhere, Research In Motion plunged on the session. A rival of the
firm, Good Technology, is widening its scope for its wireless software
platform, which will now deliver enterprise software applications to
customers. Also, in this week's Barron's roundtable, RIM was included
on a list of stocks to sell short.

* Outside of Canada, Infineon Technologies warned that second-quarter
profit and revenue would decline sequentially due to seasonal effects,
pricing pressure and a continued slowdown in demand. The company said
it expects a further slowdown in worldwide semiconductor market demand
during the second quarter. The firm also posted a leap in its first-
quarter net profit due largely to one-off license income. In domestic
chip research, BMO upgraded Mosaid Technologies to "outperform" from
"market perform," sending that stock higher. Separately, Zarlink
slumped, after Harris cut the firm's price target to US$2.60 from
US$3.00.

* Elsewhere, Royal Group Technologies warned of a fourth-quarter loss of
C$0.39 to C$0.45 a share, compared with a year-ago profit of C$0.04 a
share, or C$0.18 a share after a tax adjustment. The firm's warning
stems from the weaker U.S. dollar, higher raw-material costs and a
legal settlement related to intellectual property, amongst other
pressures. Royal Group's chief executive officer commented that the
firm is taking immediate steps to improve future results, including
implementing price increases.

* NovAtel rallied, after the firm lifted its 2004 earnings and revenue
forecasts. NovAtel now expects earnings of C$9.2 million to C$9.7
million and revenue of C$53.5 million to C$54 million. Also, 2005
revenue is expected to outpace that of 2004.

* Telecom stocks declined on the session. CIBC World Markets commented
that cable-operator Videotron is pricing its new residential telephony
services at a substantial discount to a similar package offered by
BCE's Bell Canada.

* In cyclical reports, the Competition Tribunal ruled that Sears Canada
violated the Competition Act in a tire sales advertisement. Sears
Canada landed in the red.

* On the economic front, retail sales slipped 0.1% to a seasonally
adjusted C$29.53 billion in November from a revised C$29.55 billion in
October. Economists expected sales to edge up 0.1% in November. The
reading marks the first decline in seven months. Excluding autos,
retail sales were flat at C$22.39 billion.

-- 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. 24


Source: Thomson Financial Corporate Group

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


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