MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, MARCH 1, 1998 (1)
Tuesday, March 3, 1998
Bay Street overcame losses by big banks to end within striking distance of its record high. A robust manufacturing report quashed speculation that Asia's slowdown will curb U.S. growth and lead the Fed to cut rates
Canadian stocks were mixed, with gains in bellwether issues like Thomson Corp. and Newbridge Networks Corp. tempered by declines in the country's largest banks.
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The Toronto Stock Exchange 300 composite index rose 20.61 points, or 0.3%, to 7113.1, after paring an early 44.9 point gain.
The TSE 300 has now recouped all its losses since Oct. 24 and is within striking distance of its record high of 7209.93 points, reached last Oct. 7
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About 107 million shares changed hands on the TSE, down from 129 million shares traded on Friday.
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Newcourt Credit Group Inc. (nct/tse) gained $2.65 to $67.45, Newbridge (nnc/tse) jumped $1.60 to $34.95 and Magna International Inc. (mga/tse) rose $3.15 to $88.90 to pace the advance.
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Thomson (toc/tse) gained 65› to a 52-week high of $43.25 to lead media stocks higher after it announced it would buy London-based Pearson PLC's law and tax publishing business for US$116 million.
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Royal Bank of Canada (ry/tse) fell 90› to $82.40 and Canadian Imperial Bank of Commerce (cm/tse) slipped 55› to $44.75 amid concern that official U.S. interest rates may not be cut.
Ranger Oil Ltd. (RGO/TSE) rose 35› to $9.50 and oil and gas services company Dreco Energy Services Ltd. (DEY/TSE) gained $3.75 to $41 on the possibility that members of the Organization of Petroleum-Exporting Countries will agree to cut oil production in an effort to halt a five-month slide in crude prices.
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Other Canadian markets ended mixed.
The Montreal Exchange portfolio fell 6.77 points, or 0.2%, to close at 3636.54.
The Vancouver Stock Exchange rose 3.58 points, or 0.6%, to 633.05.
For a scorecard of trading activity on all Canadian Stock Exchanges, go to:
quote.yahoo.com .
REFERENCE: Canadian Market Summary
canoe2.canoe.ca
U.S. stocks were mostly lower as rising bond yields increased the likelihood that corporate profit growth will slow this year.
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International Business Machines Corp. and other computer shares led the decline.
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The Dow Jones industrial average rose 4.73 points to 8550.45.
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The Standard & Poor's 500 composite index slipped 1.64 points, or 0.2%, to 1047.7.
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The Nasdaq composite index dropped 11.97 points, or 0.7%, to 1758.54. About 597 million shares changed hands on the Big Board, up from 580 million shares traded on Friday.
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IBM shares (ibm/nyse) fell US$21 1/82 to US$101 15/16, leading the Dow's decline. Dell Computer Corp. (dell/nasdaq), up 63% so far this year, fell US$41 1/84 to US$1355 1/88 after touching an intraday record.
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Some stocks gained on takeover news. American Bankers Insurance Group Inc. (abi/nyse) rose US$51 1/88 to US$613 1/88. after American International Group Inc. said it would amend its merger agreement with the insurer to
match rival Cendant Corp.'s hostile $58-a-share bid.
Coleman Co. (cln/nyse) jumped US$10 1/16 to US$30 15/16 after Sunbeam Corp. agreed to buy the maker of recreation and hardware products for about US$2 billion in stock, cash and assumed debt. Sunbeam (soc/nyse) rose US$37 1/88 to US$455 1/88.
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Computer Sciences Corp. (csc/nyse) rallied US$31 1/84 to US$107 15/16 after it rejected Computer Associates' US$9.8-billion takeover bid, recommending that shareholders reject the software company's US$108-a-share offer. Computer Associates shares (ca/nyse) fell 5 1/88 to US$465 1/88.
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Major international markets closed mixed.
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London: British shares climbed to a third consecutive record closing high. The FT-SE 100 index closed at 5820.6, up 53.3 points or 0.9%.
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Frankfurt: Germany's blue-chip Dax index surged ahead, ending the day just off a fresh record high, encouraged by advances on other European bourses and fueled by gains in the US$. The Dax closed at 4736.74, up 26.91 points or 0.6%.
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Tokyo: Japanese stocks posted strong gains, as the key Nikkei average surged to its highest closing level since October. The 225-share Nikkei average closed at 17,264.34, up 432.67 points or 2.6%.
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Hong Kong: Stocks closed sharply lower, led by profit-taking in index futures and China plays. The Hang Seng index fell 161.85 points, or 1.4%, to 11,318.84, near its low for the day of 11,302.81.
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Sydney: The Australian share market drifted off early gains after being spurred by firmer commodities and overseas markets, to end flat as investors took quick profits and ignored strong Asian markets. The all ordinaries index closed at 2697.9, up 0.5 points.
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Last-minute flurry swells RRSP take -- By SUSAN HEINRICH -- Mutual Funds Reporter The Financial Post
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Investors in RRSPs held out until the final days to make their contributions, but they swarmed in at the end and early numbers show mutual fund sales picked up steam in February.
The registered retirement savings plan season started slowly this year, with January net sales of $3.4 billion far short of last year's $5.3 billion. However, fund companies said yesterday strong sales in the past week will make February a solid month.
"The last two weeks were busy, and in the last week it just exploded," said Linda Knight, director of mutual fund products at Bank of Montreal.
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She estimated February sales will be far better than January's. "I actually think we're going to do a little better than [February] of last year."
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B of M is still tallying numbers from Saturday, Sunday and yesterday, which were very busy. "It's hard to believe, but people were more last minute than last year," Knight said.
RRSP contributions can be made through March in parts of Eastern Canada, where the deadline has been extended because of January's ice storm. Elsewhere, the cutoff date sparked a flurry of action.
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At discount broker Royal Bank Action Direct Inc., president Michael Bastian said, "The last two days the floodgates seem to have opened."
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Because there was so much last-minute activity, many investors parked their money in money market funds. Mutual fund sellers reporting strong 11th-hour sales include Mackenzie Financial Corp.'s Ivy funds, AIC Ltd. and Templeton Management Ltd.
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But overall, mutual fund sales for the latest RRSP season are still expected to fall short of last year's best-ever selling period.
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Some money has probably also flowed into non-mutual fund investments, said John Kaszel of the Investment Funds Institute of Canada. "There were expectations [of] some seepage from funds into [guaranteed investment certificates] and segregated funds" because investors have been nervous about the uncertain stock market.
At Canada Trust, GIC sales did take some steam away from funds said Bernard Roy, assistant vice-president of retirement services. Early estimates are that 60% of RRSP dollars went into mutual funds, compared with 70% last year. Most of the remainder went into GICs, he said.
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Several fund companies saw sales drop, including Trimark Investment Management Inc., Altamira Investment Services Inc. and Elliott & Page Ltd.
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Others reported record sales. Fidelity Investments Canada's sales were $663 million in February, compared with $253 million last year. Executive vice-president Dan Geraci said investors were looking for a company with a breadth of product so they can move between funds without having to redeem altogether. Fidelity sells 25 funds.
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Canada's economy grows 3.8 per cent in 1997
OTTAWA (CP) -- Canada's economy grew by 3.8 per cent in 1997, the best performance since 1994 and the second best in the '90s, Statistics Canada reported today.
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An otherwise weak fourth quarter was bolstered by December numbers, when strong demand for automobiles and the return to work of two striking industries led to a one per cent surge in gross domestic product.
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Consumer spending and business investment -- two of the drivers of the economy last year -- moderated in the final three months, leading to real GDP growth of 0.7 per cent in the fourth quarter.
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That didn't put a damper on an excellent year for the economy.
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"Final domestic demand jumped by 4.4 per cent, as consumer spending and business investment were bolstered by low interest rates, low inflation and brighter job and business prospects," said Statistics Canada.
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Growth in fourth-quarter consumer demand for goods and services eased back to 0.6 per cent, down from 1.3 per cent in the third quarter. Most of the consumer spending strength came from purchases of new vehicles, with auto sales up 15 per cent as year-end deals attracted buyers.
Merchandise exports and a buildup of inventories also helped sustain growth in the fourth quarter.
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But the news wasn't all good.
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Consumers have been fuelling the economy, but Statistics Canada noted spending has been outstripping income gains. The result in 1997 was that personal savings rates fell to a record low of 1.8 per cent.
Individual Canadians have also become net borrowers, when traditionally the personal sector has been a net lender to the rest of the economy.
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Corporations aren't hurting, however, with profits rebounding 17.3 per cent in 1997 after falling 3.4 per cent in 1996. Corporate Canada also saw profit gains between 1993 and 1995.
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Business inventories, with the exception of farms, grew $9.7 billion in the fourth quarter of '97, the third consecutive quarter of large inventory buildup.
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"Manufacturing, wholesale and retail trade all registered higher stockpiles on prospects of continued strong sales," said Statistics Canada.
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Exports rose 2.6 per cent in the fourth quarter, down from 3.2 per cent in the third.
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A booming U.S. economy continued to boost Canadian exports of industrial goods and materials, machinery and equipment and auto parts.
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However with imports also strong -- especially in energy products, industrial goods, auto products and consumer goods -- the surplus on Canada's balance of trade continued to fall.
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Balance of trade in goods and services fell to $7.9 billion in the fourth quarter, its third consecutive quarterly decline.
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