|
Blue chips in the red Original Source Link: (May no longer be active)
http://www.globeandmail.com/servlet/story/RTGAM.20040102.wbmar2jan021re/BNStory/Business/http://www.globeandmail.com/servlet/story/RTGAM.20040102.wbmar2jan021re/BNStory/Business/
UPDATED AT 4:32 PM EST Friday, Jan. 2, 2004
Blue chips in the red
By OLIVER BERTIN
Globe and Mail Update
North American markets welcomed the new year by bounding out of the gate Friday, helped by a buoyant manufacturing report and relief that terrorists didn't strike the U.S. during Christmas week. But the rally ran out of steam later in the day as investors became wary of the rapidly rising prices and decided to take their profits.
The Canadian dollar did particularly well, soaring by more than one-third of a U.S. cent as the U.S. dollar waxed and waned against the major foreign currencies.
The Toronto Stock Exchange S&P/TSX composite index did well, rising 72.81 points or 0.89 per cent on the day to 8,293.70, helped by big gains on the technology and metals front, while the TSX Venture Exchange composite index was up 14.56 points to 1,761.84.
The Dow Jones industrial average peaked before lunch Friday, but ended well into the red down 44.07 points or 0.4 per cent to 10,409.85 by the close, while the Nasdaq Stock Market was up 3.31 points or 0.17 per cent to 2,006.68. The broadly based S&P 500 fell 3.52 points or 0.3 per cent to 1,108.40.
The Canadian dollar moved up 0.49 cents to 77.62 cents, while the euro continued high against the U.S. dollar, closing at $1.2590, off Wednesday's record of $1.2650. Gold closed in London at $416.80 per ounce, up 70 cents from Tuesday, the last trading day before the holiday. The New York Mercantile Exchange was closed Friday.
Cattle prices rose Friday for the first time since mad-cow disease was discovered last week in the United States, sending prices down by 20 per cent. February cattle futures jumped 0.275 cents to 73.80 cents a pound on the Chicago Mercantile Exchange. That contract had closed at 90.675 cents on Dec. 23, before the diseased cow was discovered.
Gavin Graham, director of investments for the GGOF Guardian Group of Funds, said the manufacturing report was behind most of the action Friday. The market surged forward on the buoyant news, but fell back later in the day as investors took profits.
He said the TSX fared better than the Dow through the afternoon because the Canadian exchange relies heavily on metals and resource stocks, and they were holding up better than the Nasdaq's technology stocks and the Dow industrials.
Certainly, the metals did well on the TSX composite index through the afternoon, led by Sherritt International Corp., up 4.9 per cent, and gold miner Aur Resources Inc., up 3.7 per cent.
Over the past week, the Dow Jones has risen by 0.82 per cent, while the Nasdaq has risen by 1.69 per cent and the S&P 500 has risen by 1.14 per cent.
The S&P/TSX rose 1.9 per cent in the past four sessions.
The business year opened with good news on the economic front. The Institute for Supply Management reported that U.S. manufacturing activity surged in December to 66.2, the sixth consecutive month of growth and the highest level since 1983. The index, a key measure of the U.S. industrial economy, was sitting at a healthy 62.8 in November. Any figure over 50 indicates expansion.
"On balance, this is quite simply an excellent report and a great way to ring a new year," said Ivana Rupcic, an economist with the Royal Bank of Canada. She noted that new orders rose "an astonishing 77.6, a level not seen since the 1950s, setting the stage for additional strength in the New Year."
Sherry Cooper, chief economist for BMO Nesbitt Burns Inc., noted that manufacturing is growing around the world. "The British purchasing managers index reported an acceleration to 56.0, the highest reading in four years," she said. "The Eurozone PMI picked up to 52.4 from 52.2, reaching its highest since January 2001. In the U.S., the latest ISM was an astonishingly strong 66.2 in December, compared with the expected 61.0."
But she noted that U.S. customer inventories are still in short supply, indicating that the current boom will last only a few months, until the pipeline is full.
One of the few newsmakers on the TSX Friday was BCE Emergis Inc. which plans to sell its U.S. health business for $213-million (U.S.) to MultiPlan Inc., a U.S.-based health care network. BCE Emergis, which is 63.9-per-cent owned by BCE Inc., also said it would lower its profit and sales forecasts and take a charge of up to $145-million (Canadian).
Tony Gaffney, chief executive officer of BCE Emergis, said he returning BCE Emergis to the company's core businesses, claims, payments, loan processing and related security services so "we can strengthen our position as the leading eBusiness provider in Canada and drive our businesses to profitability in the United States."
Investors apparently approved. The share price rose 6.5 per cent to $5.86 on a volume of 646,200.
Speedy Muffler made very little noise Friday after Minute Muffler & Brake of Lethbridge said it had sweetened its friendly takeover offer for SMK Speedy International Inc. The stock rose 5 cents to $5.30, on a light volume of 30,300. The offer rose to $6.11 (Canadian) a share or $84.9-million from the first offer of $5.95 a share or $83-million in early December.
Air Canada was one of the most active stocks on the TSX Friday and one of the biggest gainers, rising by 18 cents or 13.5 per cent to $1.51 on a volume of 11.9 million shares. Mr. Graham said shorts were covering their positions.
|
|
