Toronto Stocks Slip Amid Broad-Based Weakness

Toronto Stocks Slip Amid Broad-Based Weakness

Tuesday, January 11, 2005, 10:15 AM EST (Thomson Financial Corporate Group): Bay Street is witnessing a modest loss this morning, as selling hits most sectors. U.S.-based Alcoa, which marked the unofficial start of earnings season with its results, disappointed the Street. Despite some upbeat brokerage remarks on Alcan, that stock is also tumbling. Meanwhile, Nortel Networks is receiving support following the release of its audited 2003 results. That stock is boosting the tech sector in the face of bleaker tech forecasts south of the border. Also, investors await Intel's quarterly release, due out after the closing bell.

* The S&P/Toronto Stock Exchange Composite Index is negating 6.72 points,
or 0.07%.

* Yesterday, the S&P/Toronto Stock Exchange Composite Index rose 20.61
points, or 0.23%.

* Topping headlines in the material space, U.S Dow component Alcoa posted
a fourth-quarter profit of US$0.30 a share, down from US$0.33 a share a
year ago. Earnings from continuing operations missed the mean Thomson
First Call estimate. The aluminum giant's revenue rose 12% to US$6.04
billion in the quarter from US$5.42 billion a year earlier. Greenback
weakness and higher input costs pressured margins during the period.

* On the domestic front, Goldman Sachs was bullish on Alcan in light of
Alcoa's financial results, stating, "We remain positive on the outlook
of aluminum market fundamentals, but believe that Alcan offers higher
leverage to aluminum prices at lower multiples and lower risks."
Separately, Alcan plans to invest US$55 million in two Russian packaging
plants. Also, CSFB initiated coverage on Agrium with an "outperform"
rating.

* In technology headlines, Nortel Networks posted its audited 2003
results. The telecom equipment maker reduced its 2003 profit to US$434
million from US$732 million. The firm's 2003 revenue was US$10.2
billion, compared to its previous reported result of US$9.81 billion.
Nortel said that it will adopt recommendations of the panel that
reviewed its accounting problems, and that five directors, including its
chairman, will not stand for re-election.

* Amid lowered forecasts within the U.S. tech space, Advanced Micro
Devices anticipates fourth-quarter operating income that is down
significantly from the third-quarter operating income of US$68.4
million. Various brokerages downgraded the stock in response.
Separately, Unisys cut its fourth-quarter outlook, partly due to its
decision to recognize revenue from a contract on a month-to-month basis
rather than in the entire fourth quarter.

* Also, Nokia said it plans to cut a "few hundred" jobs from its
multimedia business, as part of its effort to trim R&D expenditure to 9%
to 10% of sales by the end of 2006.

* The gold sector is one of the few bright market spots this morning, as
those shares and the yellow metal build on yesterday's gains, aided by
further U.S. dollar weakness against the euro. Also, Kinross Gold
announced last night that its president and chief executive, Robert M.
Buchan, will step down after the April 27 annual general meeting. Mr.
Buchan will become non-executive chairman.

* Meanwhile, oil prices are edging higher in early trading. 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.

* 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 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. 11


Source: Thomson Financial Corporate Group

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


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