MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, FEBRUARY 9, 1998 (1)
Tuesday, February 10, 1998
Bay Street ended flat as blue-chip stocks veered in opposite directions. The TSE still managed to outperform Wall Street, where stocks ceded some of last week's big gains amid profit-taking
The Toronto Stock Exchange 300 composite index fell just 0.27 of a point to 6846.86.
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Trading volume was 95.3 million shares, down from Friday's total of 101.9 million shares.
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The Toronto market was a little jittery, said Jim Mountain, managing director of institutional equity and research at ScotiaMcLeod Inc.
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High profile stocks like Inco Ltd. (N/TSE), Bombardier Inc. (BBDa/TSE) and the major banks tried to push the market into positive territory, but the key index came under pressure from notables like Moore Corp. (MCL/TSE), Newcourt Credit Group Inc. (NCT/TSE), and Canadian National Railway Co. (CNR/TSE), which ended lower on the day.
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Inco climbed $1.05 to $25.75 and Bombardier jumped 95› to $30.
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The transportation subindex dropped 1.2% to lead declining groups, as Canadian National fell $1.80 to $78.60, giving back some of the 8.3% it tacked on in the final two sessions of last week.
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Newcourt lost $1.20 to $58.80 and Moore fell $2.50 to $22.80.
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The forest products group fell 1% as Fletcher Challenge Canada Ltd.'s (FCCa/TSE) dropped 70› to $20.60.
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On the upside, both the banking and the gold groups supported the benchmark.
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The gold subindex rose 0.6% in the wake of a US$1.80 climb in the price of bullion on the Comex division of the New York Mercantile Exchange to US$300.60 an ounce.
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Gold producer Barrick Gold Corp. (ABX/TSE) rose 45› to $28.80.
The banking group added 0.5% as Toronto Dominion Bank (TD/TSE) gained $1.20 to $57.35.
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Half of the TSE's 14 stock groups rose, with the lightly weighted real estate sector up 1% to lead the advancers. In the group, TrizecHahn Corp. (TZH/TSE) gained 40› to $34.30.
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Other Canadian markets ended higher.
The Montreal Exchange portfolio rose 7.59 points, or 0.2%, to 3527.39.
The Vancouver Stock Exchange rose 2.86 points, or 0.5%, to 631.21.
For a scorecard of trading activity on all Canadian Stock Exchanges, go to:
quote.yahoo.com .
Canadian Market Summary
canoe2.canoe.ca
U.S. stocks lost the momentum of last week's market rally, but refused to give much ground, a reflection, analysts said, of the durability of the bull market.
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A host of blue-chip names were fractionally lower, like Walt Disney (DIS/NYSE), which slipped 7 1/88 to US$107 11/16 after climbing to a 52-week high last week, and Johnson & Johnson (JNJ/NYSE), which lost 7 1/88 to US$687 1/88, after setting a 52-week high Friday.
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Those fractional losses added up to a scant decline by the Dow Jones industrial average, which fell 8.97 points to 8180.52. The benchmark is still within a percentage point of the record high 8259.31 set six months ago.
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More than 529.1 million shares, changed hands on the New York Stock Exchange, down from 568 million shares traded Friday.
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"We had a big move in the last week," said John Manahan, head of trading at BT Alex. Brown. "It'll just take a little time to break through to new highs. Fundamentally, everything's pointing to this market moving higher."
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The market gained support from industrial stocks like Caterpillar (CAT/NYSE), which rose US$1 3/4 to UYS$521 1/82, its highest finish in more than three months. Deere & Co. (DE/NYSE) advanced US$11 1/88 to US$555 1/88 and Case Corp. (CSE/NYSE) added US$1 3/16 to US$64 5/16. "Some of the basic industry stocks that were overly penalized during the fears about fallout from Asia have been rebounding," said Anthony Dwyer, market strategist at Ladenburg Thalmann.
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Major international markets ended mixed.
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London: British shares retreated from Friday's record close amid profit-taking in banking and insurance stocks. The FTSE 100 index closed at 5600.9, down 28.8 points or 0.5%.
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Frankfurt: German shares pared early gains that sent them to a record high, but still ended in the black. The Dax index closed at 4563.55, up 67.22 points or 1.5%.
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Tokyo: Japanese stocks rose, boosted by foreign investors' buying on expectations of economic action by the Japanese government. The 225-share Nikkei average closed at 17,205.00, up 164.94 points or 1%.
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Hong Kong: Stocks rallied to a sharply higher close, boosted by firmer overseas markets and softer local interbank rates, brokers said. The Hang Seng index closed at 10,873.15, up 387.29 points or 3.7%.
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Sydney: The Australian share market was aided by last week's U.S. rally, firmer Asian markets and strong local earnings reports. The all ordinaries index closed at 2685.3, up 29.2 points or 1.1%
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Ottawa borrows U.S. funds to shore up dollar
OTTAWA (CP) - The federal government is heading to world financial markets to shore up its dollar defence fund.
The Finance Department announced Monday a U.S.-dollar global five-year bond offering for distribution in Asia, Europe and North America.
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Department officials said the offering is expected to fetch between $1.5-billion US and $2-billion US depending on market conditions. The proceeds will be added to Ottawa's defence fund for the dollar.
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As an alternative to raising interest rates to attract offshore investors, the Bank of Canada frequently defends the value of the dollar by buying the currency with U.S. funds.
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A similar offering for $1 billion was made last July and this will be the sixth time in three years Ottawa has borrowed U.S. dollars to shore up the Canadian currency.
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