MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, MARCH 17, 1998 (1)
Wednesday, March 18, 1998
Wall Street jumped to another record on the strength of bank shares, but was held back by lacklustre oil issues. Bay Street also peaked on the back of gains in transportation issues
The Dow Jones industrial average rose 31.14 points, or 0.4%, to a record 8749.99 after being down for most of the day.
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Oil shares tempered a rally in bank stocks after Chase Manhattan Corp. said it will trim 4,500 jobs, split its stock and raise its dividend.
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Chevron Corp. and Exxon Corp. were among the average's biggest losers as the price of crude oil briefly dipped below US$13 a barrel, its lowest in almost a decade.
The Standard & Poor's 500 index gained 1.18 points to 1080.45, also a record, while the Nasdaq composite index dropped 8.88 points, or 0.5%, to 1779.3.
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Volume on the Big Board was 680.8 million shares, up from 553.1 million shares traded Monday.
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Chase (CMB/NYSE), the biggest U.S. bank, rallied US$6 7/16 to US$1343 1/84, spurring J.P. Morgan & Co. (JPM/NYSE) to a gain of US$4 13/16 to US$1357 1/88. Citicorp (CCI/TSE) jumped US$25 1/88 to US$142 3/16.
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Crude oil prices are down more than 32% since November, when the Organization of Petroleum-Exporting Countries decided to boost production by 10%.
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The price of West Texas crude fell US20› to US13.21 a barrel on the Comex division of the New York Mercantile Exchange. Chevron (CHV/TSE) dropped 13/16 to US$82 1/16, Texaco (TX/NYSE) slid US$1 3/16 to US$561 1/88 and Schlumberger Ltd. (SLB/nySE), a driller and oil
equipment maker, slumped US$2 13/16 to US$67. Exxon (XON/NYSE) fell US$11 1/84 to US$62 15/16.
Computer-related shares declined on concern that Asia's financial troubles will crimp U.S. corporate profits. A report published yesterday by International Data Corp. suggested that sagging Asian economies and continued price volatility in the memory segment "have dampened, but not extinguished, worldwide semiconductor revenue growth."
Intel Corp. (INTC/NASDAQ) fell 15/16 to US$763 1/84, Oracle Corp. ÿ(ORCL/nasdaq) fell 7 1/88 to US$283 1/84 and Compaq Computer Corp. (CPQ/NYSE) fell US$17 1/88 to US$235 1/88.
Canadian stocks were mixed, with gains in transport stocks as well as banks, with losses by oil issues.
Banks gained after the U.S. government reported a larger than expected jump in housing starts to 6%. ÿ"The higher-than-expected housing starts in the U.S. bodes well for the Canadian housing sector, which will likely help bank profits," said Philip Strathy, portfolio manager with Strathy Investment Management Ltd..
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The Toronto Stock Exchange 300 composite index rose 12.49 points, or 0.2%, to 7440.37 - its sixth record of the year. About 97.2 million shares changed hands on the TSE, up from 89.2 million shares traded Monday.
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BCE Inc. (BCE/TSE) gained $1.15 to $56.40, Canadian Imperial Bank of Commerce (CM/TSE) rose 90› to $49.80 and Fairfax Financial Holdings Ltd. (FFH/TSE) climbed $32 to $487.
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Petro-Canada (PCA/TSE) rose 20› to $24.45, Renaissance Energy Ltd. (RES/TSE) slid 10› to $29 and Alberta Energy Co. (AEC/TSE) fell 65› to $33.45.
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Laidlaw Inc. (LDM/TSE) rose 90› to $23.40 to lead transport issues higher after U.S.-based Safety-Kleen Corp. agreed to be acquired by U.S.-based Laidlaw Environmental Services Inc. for US$2.1 billion in cash, stock and assumed debt, ending months of fighting over the waste-management company's hostile bid.
Air Canada (AC/TSE) was the most active issue in Toronto, gaining 20› to $13.10 on volume of 2.8 million shares. ÿ"Declining oil prices will help Air Canada exceed earnings expectations," said Strathy. "It's going to take off."
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Other Canadian markets ended mixed.
The Montreal Exchange portfolio rose 18.18 points, or 0.5%, to 3799.96.
The Vancouver Stock Exchange fell 4.49 points, or 0.7%, to 616.56.
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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Major overseas markets closed higher.
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London: British shares hit a fourth-straight record. The FT-SE 100 index climbed 49.8 points, or 0.9%, to 5,834.9.
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Frankfurt: German stocks failed to hold on to a record set during the day. The Dax index closed up 62.83 points, or 1.3%, at 4,946.68.
Tokyo: Japanese stocks ended higher in thin trading. The 225-share Nikkei average rose 136.06 points, or 0.8%, to 16,997.20.
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Hong Kong: The Hang Seng index climbed 74 points, or 0.7%, to 11,255.54.
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Sydney: The Australian share market posted its biggest one-day gain in more
than a month. The all ordinaries index rose 37.2 points, or 1.4%, to 2767.1.
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Asian crisis pulls U.S. economy in two directions
WASHINGTON (AP) Asia's economic crisis is pulling the American economy in two directions: dampening manufacturing through increased export competition and boosting housing construction through lower interest rates. ÿConstruction of new single-family homes and apartments rose to a seasonally adjusted annual rate of 1.64 million units last month, up six per cent from January and the highest level since November 1987, the Commerce Department said Tuesday.
Meanwhile, the Federal Reserve Board reported that U.S. industrial production was unchanged in February for the first time since October 1996. Economists said the report showed the impact of reduced export sales to economically ailing countries in Asia and increased competition from Asian imports.
"The industrial sector is slowing in reaction to Asian developments," said economist Gerald Cohen of Merrill Lynch. ÿWall Street thrived on the mix of news. The Dow Jones average of industrial stocks rose 31 points to 8,750, its second consecutive record close.
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