MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, MARCH 24, 1998 (1)
Wednesday, March 25, 1998
Bay Street shares rose to a second-straight record, this time with the help of high-tech issues and utility shares. Wall Street wiped out most of Monday's losses with financials leading the way
Canadian shares continued their record-setting ways, boosted by high-technology issues and utilities as fund managers stocked their portfolios before the end of the quarter.
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The Toronto Stock Exchange 300 composite index rose 40.99 points, or 0.6%, to a record 7551.23.
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Northern Telecom Ltd. and its parent BCE Inc. paced the advance with record-setting gains.
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Nortel shares (NTL/TSE) rose $2.95 to a 52-week high of $90.70 after earlier setting a record intraday high of $91.45. The firm's U.S.-traded shares (NT/NYSE) soared US$2 5/8 to US$64 after rising to a record US64 1/2 intraday.
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Newbridge Networks Corp. (NNC/TSE) rose 65› to $40.65 and BCE (BCE/TSE) rose $2.10 to a 52-week high of $57.25.
About 110.2 million shares changed hands on the TSE, down from 111.3 million shares traded Monday.
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Among the stocks helped by the end of quarter flood of cash was non-bank lender Newcourt Credit Group Inc. (NCT/TSE), which rose $3.50 to $72.80.
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Edmonton-based telephone company Telus Corp. (T/TSE) rose $2.30. to $40.40.
The firm is in talks to buy a stake in a Canadian long-distance company partially owned by AT&T Corp. in a bid to compete with Bell Canada,.
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Other phone companies also rose on speculation that more combinations in the industry will follow.
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Manitoba Telecom Services Inc. (MBT/TSE) rose $1.20 to $23.10 and BC Telecom Inc. (BcT/TSE) climbed $2.20 to $52. Teleglobe Inc. (TGO/TSE), an international long-distance provider, jumped $2.95 to $61.95.
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Declines by oil companies like Gulf Canada Resources Ltd., Petro-Canada and Talisman Energy Inc. slowed the index's advance. They fell, following crude prices, as many investors were reluctant to wager fresh funds before confirmation that oil producers would cut output.
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Gulf (GOU/TSE) fell 20› to $8.25, Talisman (TLM/TSE) slipped 20› to $44.95 and Petro-Canada (PCA/TSE) lost 50› to $25.45.
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Gold producers Placer Dome Inc. and Barrick Gold Corp. gave up initial solid gains after bullion for April delivery fell from an early high. The price of gold still ended US50› higher at US$299.50 and ounce on the Comex division of the New York Mercantile exchange. Barrick (ABX/TSE) rose 5› to $28.65 and Placer Dome (PDG/TSE) fell 30› to $17.90.
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Other Canadian markets were mixed.
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The Montreal Exchange portfolio rose 8.73 points, or 0.2%, to 3840.95.
The Vancouver Stock Exchange lost 0.88 of a point to 616.12.
For a scorecard of trading activity on all Canadian Stock Exchanges, go to:
quote.yahoo.com .
REFERENCE: Canadian Market Summary
canoe2.canoe.ca
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U.S. stocks rose, led by financial companies like Merrill Lynch & Co. as record earnings from Goldman Sachs Group LP, Wall Street's richest investment banking partnership, showed that the bull market is boosting profits.
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The Dow Jones industrial average climbed 88.19 points, or 1%, to 8904.44, recovering most of Monday's loss and ending just two points short of record territory.
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The Standard & Poor's 500 index rose 10.10 points, or 0.9%, to a record 1105.65. The Nasdaq composite index rallied 19.93 points, or 1.1%, to a record 1812.44.
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Volume on the Big Board was almost 611.5 million shares, down from 629.7 million shares traded on Monday.
Banks and brokerages got an added boost from doubts that oil exporters will be able to bolster prices by cutting production.
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Merrill Lynch (MER/NYSE) rose US$3 15/16 to US$86 13/16 and Lehman Brothers Holdings Inc. (LEH/NYSE) rose US$2 1/16 to US$73 1/4.
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Both Lehman and Morgan Stanley are to report first-quarter earnings this week, and analysts expect banner profits.
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Cisco Systems Inc. (CSCO/Nasdaq) rose US$3 1/16 to US$67 13/16 after chief executive John Chambers said its Internet service and voice and data business could comprise half of sales within four years.
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ISS Group Inc. (issx/nasdaq), an as-yet-unprofitable network security company, surged US$183 1/8 to US$403 1/8 in its first day of trading.
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Overseas markets were mixed.
London: The FT-SE 100 index rose 36.7 points, or 0.6%, to 5,983.7.
Frankfurt: The Dax index rose 56.92 points, or 1.1%, to 5,028.24.
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Tokyo: Japanese shares fell on news that no income-tax cut would be included in an upcoming economic package. The 225-share Nikkei average fell 262.44 points, or 1.6%, to 16,606.39.
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Hong Kong: The Hang Seng index rose 51.1 points, or 0.4%, to 11,645.43.
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Sydney: Australian shares hit a record, propelled by rallies in gold and oil prices. The all ordinaries index climbed 12.7 points, or 0.5%, to 2,792.
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Inflation low, but analyst worried
OTTAWA (CP) -- Canada's annual inflation rate moved marginally down last month to 1.0 per cent, but at least one analyst was concerned the cost of living may be on the way up again.
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Statistics Canada said today the rate moved down in February from 1.1 per cent in January because of lower food and energy prices.
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The consumer price index has been advancing at a snail's pace since November, when the annual inflation rate was 0.7 per cent.
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But behind that good news may be an underlying upswing, said Sherry Cooper, chief economist at Nesbitt Burns.
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Consumers were hit with higher cable-TV prices at the end of a free trial for specialty channels, higher cigarette taxes in Ontario, Quebec and the Maritimes and the emergence of surcharges on travel tours because of the weakened Canadian dollar.
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Had it not been for sharply lower food and energy costs to offset those increases, the annual inflation rate would have advanced.
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Economists follow a second inflation rate -- the so-called core rate with food and energy costs stripped out -- to get a better read on what the rest of the economy is doing and track any early-warning signs.
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Last month, that stripped-down rate surged to 1.6 per cent from 1.2 per cent in January and up from 0.8 per cent in December.
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Cooper interpreted the core increase as a sign that "underlying price trends have bounced off the bottom."
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In addition, the emergence of travel surcharges is a sign that the recent battering of the Canadian dollar is starting to take a toll on the cost of living, she said.
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The Bank of Canada uses an inflation target band between one per cent and three per cent in managing the money supply.
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With the pickup in core inflation to the middle of the target band, the central bank would have justification to raise interest rates, "if the economy continues to build momentum," Cooper said.
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Between January and February, the consumer price index advanced by 0.1 per cent.
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On a monthly basis, the core rate of inflation advanced by 0.5 per cent, the same as last month. These are the largest back-to-back monthly gains since March 1991.
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