DAILY WRAP-UP
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The Nasdaq powered higher for the seventh straight session. Investors took
cues from a parade of upbeat analyst comment about the technology sector.
The positive mood helped lift the Dow and S&P 500 indices as well.
A slew of mixed economic data contained disappointing statistics on the
labor front, but was positive on the whole, aiding investor interest in
equities. An upgrade of networking giant Cisco Systems, and an increase
earnings outlook Procter & Gamble also helped matters.
The Dow Jones Industrial Average finished with moderate gains, rising 19.44
points or 0.2% to 9587.90. The Nasdaq composite rallied 16.08 points or
0.87% to 1868.98. The broad S&P 500 nosed ahead 1.7 points or 0.17% to
1027.97. Volume on the NYSE amounted to 1.446 billion shares. At the
Nasdaq, some 1.883 billion shares traded hands.
Goldman Sachs (NYSE: GS) raised its rating on Cisco Systems (NASDAQ: CSCO)
to "outperform" from "in-line" a day after the company said its August
sales outperformed predictions. Cisco rose 1.73% to $20.59 a new 52-week
high.
Chip stocks benefited from commentary at UBS Warburg, and a stellar
financial report from National Semiconductor (NYSE: NSM). The brokerage
said it was "more positive" on stocks in the semiconductor sector. National
Semi rose 11% to $31.99 after reporting sales and earnings at the high end
of expectations. The company also predicted revenue growth in the range of
4% to 7% for the current quarter.
Lam Research (NASDAQ: LRCX) gained 1.68% to $25.49. The company was one of
seven names in the sector upgraded to "buy" by UBS analyst Byron Walker.
Intel (NASDAQ: INTC), the number one global chipmaker, rose 1.35% to $28.60
ahead of its mid-quarter update.
Procter & Gamble (NYSE: PG) raised its earnings outlook for the seventh
time in eight quarters. The consumer products giant climbed 2.96% to $91.43
after targeting 11% to 13% earnings growth for its fiscal first quarter.
P&G said its over the counter drug business was driving the improved
earnings picture.
Elsewhere Best Buy (NYSE: BBY) raised its quarterly guidance based on
back-to-school sales of notebook computers. The electronics retailer
slipped 0.77% to $52.69.
Pfizer (NYSE: PFE) slipped 0.91% to $30.60 after revising its earnings
expectations lower. The drugmaker said a shift in inventory valuations
related to its Pharmacia acquisition would cut its expected per share
earnings to 70 cents, from the previous forecast of 86 cents.
Kraft (NYSE: KFT) lowered its third quarter earnings expectations as the
result of higher spending on marketing and promotions. The food products
giant, which is known for Maxwell House coffee and Philadelphia Cream
Cheese, dipped 1.6% to $29.37.
Retail sales figures for August reflected a strong back-to-school shopping
season. Discount retailers reaped the bulk of the benefit. Wal-Mart (NYSE:
WMT), which is the world's largest retailer, added 0.17% to $60.08. The
company said same store sales for the four weeks ending August 29 rose 6.9%
compared to a year ago.
Gap (NSYE: GPS) shares were pummeled, losing 13.43% to $18.18 after the
company said August sales at stores open at least one year rose 4%. That
measure was below expectations.
Economic news was largely positive, except for an unexpected rise in new
claims for unemployment insurance. That measure rose by 15,000 last week to
413,000 from a revised 398,000 in the prior week. Claims above the level of
400,000 are generally associated with weakness in the labor market.
The Institute for Supply management said its measure of economic activity
in the services sector was flat with the July figure of 65.1. It's the
highest reading since the index was launched in July 1997. Economists had
predicted a dip to 63. Productivity in the second quarter was revised
higher to 6.8%. Factory orders rose 1.6%, outpacing expected growth of 0.9%.
In small cap trading, the Russell 2000 climbed 1.85 points or 0.36% to
512.56, while the S&P600 index was up 0.96 points or 0.39% to 249.83.
Some of the small cap stocks making big moves included Dendreon (NASDAQ:
DNDN). The company's shares soared 36.92% to $8.53 on volume of 19,232,221.
The FDA expedited the review of the company's treatment for prostate
cancer, Provenge.
Finisar (NASDAQ: FNSR) shares slid 6.99% to $2.13 on volume of 6,789,568
after the fiber optics equipment firm reported a loss of 20 cents per
share. That compares with its year ago loss of 19 cents on a per share basis.
In commodities trading on the New York Mercantile Exchange, October crude
oil futures slid 51 cents to $28.98. October natural gas advanced 11.6
cents to $4.81. December gold futures gave back $1.00 to $374.00.
Canadian stocks ended the session with moderate gains, extending the TSX's
win streak to four sessions. The market had leadership from stocks in the
technology group. Industrial and materials stocks were also moving higher,
while bank and energy issues traded below the break-even line.
The TSX composite gained 14.49 points or 0.19% to 7594.85, and the small
cap Venture index eased 0.77 points or 0.06% to 1324.57.
In the information technology group Celestica (TSX: T.CLS) climbed 5.72% to
$26.73. Nortel Networks (TSX: T.NT) tacked on 7.84% to $5.23 in a second
day of gains following its blockbuster deal to furnish wireless network
equipment for Verizon Wireless.
Plane and train maker Bombardier (TSX: T.BBD.B) rallied 6.65% to $5.93.
Transat A.T. (TSX: T.TRZ), the owner of the charter airline Transat, said
it has begun talks to sell its French online travel agency unit, Anyway.
The company's shares were even at $5.65. Air Canada (TSX: T.AC) shares were
lifted 7.26% to $1.28 after the company announced a major seat sale, as
well as new flights to Cuba and Latin America.
In earnings news MDS Inc. (TSX: T.MDS) reported higher third quarter
profits that missed analysts' expectations by a penny per share. The
Toronto health sciences company attributed its revenue and earnings growth
to better performance by its analytical instruments business. MDS shares
fell 1.66% to $18.90.
Elsewhere in the group, Angiotech Pharmaceuticals (TSX: T.ANP) tumbled
5.72% to $54.21. Patheon (TSX: T.PTI) gave up 4.18% to $14.45 after the
drug outsourcer reported flat profits for its fiscal third quarter.
Descartes Systems (TSX: T.DSG) stumbled 7.08% to $3.41 after reporting a
second quarter loss. The Waterloo, Ontario company, which operates an
Internet-based logistics network, said quarterly sales slipped 16% to
US$15.2 million versus US$18 million in the comparable period a year ago.
The company lost 29 cents a share US, and forecast a per share loss of 10
to 12 cents US in the current quarter. The company also announced its
chairman and director Peter Schwartz has resigned.
Wireless security firm Certicom (TSX: T.CIC) fell 16.99% to $1.27 after
reporting wider losses in its fiscal first quarter. The company cited a
challenging selling environment for its loss of five cents per share US,
compared with its year ago loss of three cents per share US.
Wheaton River (TSX: T.WRM) gained 6.69% to $2.46 after it announced the
purchase of rival junior miner Miranda Mining (TSX: V.MRM) for $38 million
in cash. Separately, Wheaton River announced it would acquire the 70% stake
in the Los Filos gold property in Mexico from Teck Cominco (TSX: T.TEK.B)
for $48 million. Teck Cominco shares were up 0.36% to $13.80 and Miranda
shares skyrocketed 40% to close at 70 cents.
Gains in the gold group boosted the materials subindex. Barrick Gold (TSX:
T.ABX), the largest producer in the country, put on 1.08% to $28.00, and
Kinross Gold (TSX: T.K) rallied 0.38% to $10.38.
Active stocks on Bay Street included Impact Energy (TSX: T.IEY), which
gained 6.06% to $1.40; BCE Inc. (TSX: T.BCE) was off 0.73% to $30.08; and
ATI Technologies (TSX: T.ATY) fell 2.09% to $20.17.
In market-related news, the Canadian Securities Administrators (CSA)
announced that it would open a permanent office in Montreal and coordinate
a committee to determine policy for the regulation of securities markets
across the country.
Alimentation Couche-Tard (TSX: T.ATD.B) advanced 1.56% to $16.25 after it
posted record quarterly earnings and sales. The largest operator of
convenience stores in Canada said its acquisition strategy bolstered bottom
and top line growth. The company earned 28 cents per share, up from 23
cents a year ago. Sales grew to $895.1 million from $680.9.
The Canadian dollar was worth US$0.7286. |
