MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, FEBRUARY 5, 1998 (1)
Friday, February 6, 1998
Canadian stocks rose on expectations of profit growth in an environment of stable interest rates. U.S. stocks fell on fears recent strong gains are not justified against the earnings outlook
Canadian National Railway Co. helped send the Toronto Stock Exchange 300 composite index higher after it said it was in talks to buy a major U.S. railroad.
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The TSE 300 gained 52.33 points, or 0.8%, to 6814.96.
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More than 123.4 million shares changed hands, up from 113.3 million shares traded on Wednesday.
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Shares of Canadian National (CNR/TSE), which account for 1.7% of the benchmark index, rose $3.05 to $77.30. The company confirmed it is in talks to buy Chicago-based Illinois Central Corp. for as much as US$2.4 billion in cash and stock to create North America's fifth largest railroad.
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Newbridge Networks Corp. (NNC/TSE) was the most active issue on the TSE for a third straight day. The high-tech firm pulled out of its recent nosedive with a rise of $1.75 to $29.25 on volume of 3.9 million shares.
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Meanwhile, Bank of Canada Governor Gordon Thiessen told business leaders in Saint John the recent rise in interest rates will not significantly affect economic growth.
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The central bank last week raised its key lending rate half a percent to 5.5% in a bid to halt the recent slide of the C$. Banks benefit from stable interest rates since companies are more likely to finance expansion through borrowing.
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Toronto-Dominion Bank (TD/TSE) climbed 95› to $55.35, Canadian Imperial Bank of Commerce (CM/TSE) gained 45› to $41.10, Royal Bank of Canada (RY/TSE) jumped 20› to $78.60 and Bank of Nova Scotia (BNS/TSE) rose 35› to $65.10.
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Seagram Co. (VO/TSE) gained $1.70 to $51.40 after it said it had sold more than half its stake in big media and entertainment company Time Warner Inc. for US$956.6 million.
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Petro-Canada (PCA/TSE) gained 85› to $26.35, Talisman Energy Ltd. (TLM/TSE) rose 45› to $41.35 and Suncor Energy Inc. (SU/TSE) rose 30› to $48.80 as the price of West Texas crude oil climbed US21› to US16.50 a barrel.
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Other Canadian markets finished higher.
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The Montreal Exchange portfolio rose 20.17 points, or 0.6%, to 3492.55.
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The Vancouver Stock Exchange rose 6.56 points, or 1.1%, to 625.51.
For a scorecard of trading activity on all Canadian Stock Exchanges, go to:
quote.yahoo.com .
and
Canadian Market Summary
canoe2.canoe.ca
U.S. stocks fell, led by General Motors Corp., Merck & Co. and BellSouth Corp.
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The Dow Jones industrial average slipped 12.46 points, or 0.6%, to 8117.25.
The Standard & Poor's 500 composite index fell 3.36 points, or 0.3%, to 1003.54.
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The Nasdaq composite index dropped 3.54 points, or 0.2%, to 1676.90.
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The Dow came within 100 points on Tuesday of breaking its Aug. 6 record and the S&P 500 set records for the first three days of this week, bringing its year-to-date gain to 3.4%.
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However, the S&P 500's profit growth is expected to slow to 6.6% this year from 12.4% last year, according to Zacks Investment Research.
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Wall Street stocks advanced early on the back of more solid gains in Asian markets.
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However, investors are yet to be convinced that the damage to U.S. corporate earnings is over and they fell back later in the session.
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General Motors (GM/NYSE) lost US$17 1/88 to US$60 and Ford Motor Co. (F/NYSE) fell US$1 3/16 to US$50 1/16.
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Sales at both auto makers fell more than expected in January, leading to speculation that they will offer incentives to consumers to boost sales. "If incentives go up, earnings go down," said Philip Fricke, an automotive analyst at Prudential Securities.
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BellSouth (BLS/NYSE) lost US$2 11/16 to US$57 5/16. The telephone company's application to offer long-distance to customers in its region was rejected by U.S. regulators Wednesday.
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Drug stocks slid, led by Merck (MRK/NYSE), down US$13 1/84 to US$113 3/16.
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Drug shares have been the seventh-best performing group in the S&P 500 in the past three months.
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Major international markets closed mostly higher.
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London: British stocks ended mixed, wiping out a 79-point rise in late trading. The FT-SE 100 climbed 10.6 points, or 0.2%, to 5606.4.
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Frankfurt: German shares rose. The Dax index climbed 61.51 points, or 1.4%, to 4548.46.
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Tokyo: Japanese stocks edged higher. The 225-share Nikkei average closed at 17,003.30, up 120.68 points or 0.7%.
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Hong Kong: The Hang Seng index rose 139.52 points, or 1.4%, to 10,442.13.
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Sydney: The Australian share market ended little changed, with the all ordinaries index up just one point at 2657.
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Cominco plans high-tech copper refinery for B.C. -- By PETER KENNEDY
Metals giant Cominco Ltd. wants to build a high-tech copper refinery in British Columbia that it says could cost up to $200 million.
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The Vancouver-based company is studying the feasibility of building the facility under a plan to test its new hydrometallurgical copper extraction process.
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"We are looking at putting it somewhere in B.C.,'' said Mick Henningson, vice-president of mines at Cominco, which is 34%-owned by Teck Corp.
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Cominco has already spent about $25 million in pilot tests of the new technology, which would enable it to extract copper from the surrounding ore without producing poisonous sulphur dioxide gas or liquid wastes.
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Now it wants to test the low-cost technology on a commercial scale, by building a plant that can treat something like 100,000 tonnes of material a year.
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All the copper mined in B.C. is shipped offshore for processing in countries such as Japan. But Henningson said Cominco has already identified several B.C. copper mines that could supply the refinery.
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They include Cominco's own Highland Valley operation as well as mines held by the likes of Imperial Metals Corp., Princeton Mining Corp. and Royal Oak Mines Inc.
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However, construction could be at least two years away and any decision to proceed with the plant is still subject to negotiations with the B.C. government over "things like taxes, the availability of technical personnel and power costs,'' Henningson said.
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"It's going to be an economic decision at the end of the day,'' added Douglas Horswill, Cominco's vice-president, corporate affairs. Once the technology is seen to be successful in B.C., Cominco hopes to build similar plants in places like Peru, Chile, and Labrador.
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B.C. mining officials say the refinery would provide a tremendous boost to a province suffering from the impact of low commodity prices, the Asian flu and a perception it is not a good place to do business.
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"We could certainly use more value-added, job-producing extensions to the industry,'' said Lorne Grasley, director of policy research at the B.C. Mining Association, "Once Cominco gets all its ducks lined up, you are going to be hearing a lot more about this project.'' ÿCominco shares (CLT/TSE) fell 5› yesterday to $23.35.
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