MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, APRIL 21, 1998 (1)
MARKET WATCH
Strengthening gold stocks boosted Bay Street to its first gains in two days. Big Blue's report of better than expected earnings surprised investors and spurred the Dow to another record.
Canadian stocks were mixed as a wave of robust profits boosted earnings optimism, offsetting another decline in major banks.
The Toronto Stock Exchange 300 composite index rose 11.16 points to 7765.52 after seesawing between a loss of 28 points and a gain of 41 points earlier in the day. About 124.7 million shares changed hands, up from about 100 million shares traded on Monday.
Overall in Toronto, six of the TSE 300's 14 subindexes closed higher, led by a big 4.7 percent jump in the gold and precious minerals index. The index climbed after the June price for Comex gold rose US$3.00 to US$312.60.
The metals and minerals index also pushed the market higher with a 1.2 percent jump. The consumer products sector rose 0.5 percent.
Tempering the gains was a 0.4 percent drop in the financial services sector as investors continued to sell off their bank holdings following Friday's announcement that two more Canadian banks intend to merge.
The paper and forest products sector fell 0.36 percent. ''It looks like (investors) have handed the baton over to the more cyclical stocks,'' said ABC Fund's Irwin Michael, noting the shift away from the banking stocks.
This move came after Finance Minister Paul Martin hinted there is still no decision on the mergers proposed by the country's largest banks.
''There's a little bit of concern here that Paul Martin is sending a message that it's not a done deal with mergers in the banks. There is that doubt,'' said Michael.
Banks posted their biggest three-day decline since Jan. 12. Canadian Imperial Bank of Commerce (cm/tse) fell 30› to $51.50 and Toronto Dominion Bank (TD/TSE) lost 30› to $66.70. The TSE financial services subindex fell 39.06 points to 10,156.1.
Gains by Barrick Gold Corp., BCE Ltd. and Placer Dome Inc. added 17 points to the index while Northern Telecom Ltd. cut 12.5 points.
Barrick (abx/tse) posted its steepest single-day jump since Jan. 23 after it posted first-quarter profit of $75 million, or 20› a share, on revenue of $305 million in the period ended March 31, compared with a profit of $55 million (15›), on revenue of $306 million in the same period last year. The shares rose $1.75 to $32.40.
Placer Dome (pdg/tse) climbed $1.70 to $21.20.
Among industrials, Magna Cl A gained $3.05 to $106.35; Nortel (ntl/tse) fell $3.70 to $91.70, but its majority owner BCE (BCE/TSE) rose 50› to close at $61.35.
Other Canadian markets ended mixed. The Montreal Exchange portfolio rose 3.74 points to close at 3901.18. The Vancouver Stock Exchange was virtually flat, falling 0.69 of a point to 632.51. The Alberta Stock Exchange fell
U.S. stocks rose after International Business Machines Corp. did not warn of slowing profits in its first-quarter earnings report, suggesting earnings for a variety of companies may be better than expected.
The Dow Jones industrial average gained 43.1 points, or 0.5%, to a record 9184.94.
About 680.7 million shares changed hands on the Big Board, up from about 601 million shares traded on Monday.
The Standard & Poor's 500 index rose 2.69 points, or 0.2%, to 1126.34.
The Nasdaq composite index rose 16.73 points, or 0.9%, to a record 1903.87.
IBM shares (ibm/nyse) rose US$8 3/8 to US$118 after the company said late Monday it earned US$1.06 a diluted share in the first quarter, beating Wall Street estimates by 1›.
Computer chip maker Intel Corp. and Dell Computer Corp. took heart from the news. Intel shares (INTC/NASDAQ) rose US$2 7/16 to US$78 15/16 while Dell (DELL/NASDAQ) rose US$4 11/16 to US$74 3/8.
Chase Manhattan Corp. and Exxon Corp. also advanced after reporting higher than expected first quarter earnings. Exxon (xon/nyse) rose 1/4 to US$73 5/16 after it said it earned US86› a share, US20› better than consensus estimates.
Chase (cmb/nyse) rose US$4 9/16 to US$139 1/8 after news its earnings grew to US$2.35 a share, US9› better than expected.
Little-known technology companies clicked amid hopes that their links to Internet retailing would drive future profits, analysts said.
The stock price of 7th Level Inc. (sevl/nasdaq) soared US$7 7/16 to US$9 1/4 after it teamed up with WavePhore Inc. to expand its Internet animation technology.
Pfizer Inc. (pfe/nyse) rose for a fourth day, climbing US$2 13/16 to US$116 3/16 on optimism that its new impotence pill will be a best-seller. The stock soared almost 8% Monday and, with value of US$151 billion, Pfizer is now ahead of Merck & Co. as the largest drug company in the U.S.
Major international markets also were mixed.
London: Britain's FT-SE 100 index closed flat in a session dominated by index futures-led trading. The FT-SE 100 closed at 5955, up 0.9 of a point.
Frankfurt: German stocks ended lower, but came off earlier lows after a slight rebound on Wall Street lifted spirits, which had previously been hit by the weakness of the US$ against the mark. The Dax closed at 5388.94, down 53.06 points or 1%.
Paris: Stocks were down 1.5 percent, dragged lower by the weaker dollar and falling bond prices. ''The principal problem today is the dollar,'' one trader said. Traders said dollar stocks, notably oil stocks, could be hit hardest by profit-taking. In currencies, the dollar was looking less robust and lost nearly a pfennig in early trade.
Caracas: Stocks closed ahead for the second straight session in line with firming oil prices, but an expected rise in Venezuelan interest rates could cut short any rally, brokers said. ''Investors are watching oil prices and worried about interest rates,'' Profimerca broker Eduardo Franco said. The bolsa's 15-share (IBC) index edged up 0.2 percent to end at 6,992.02 points on trade of 173 million shares worth five billion bolivars ($9.4 million), according to preliminary figures from the exchange.
Sydney: The Australian stock market ended moderately weaker due to profit taking and a negative lead from Wall Street overnight. The all ordinaries index closed at 2866.4, down 6.1 points or 0.2%
Wellington: New Zealand share prices closed mostly lower, with brokers noting uneven buying interest during the session. The NZSE-40 Capital Index fell 16.33 points, or 0.7 percent, to 2,310.46.
Tokyo: Shares rebounded after skidding for three straight days. A temporary halt in futures selling by life insurers and other institutional investors helped lift share prices, traders said. The benchmark Nikkei Stock Average of 225 selected issues rose 128.57 points, or 0.82 percent, closing at 15,825.67. On Monday, the index had slipped 6.70 points, or 0.04 percent.
Hong Kong: The Hang Seng Index, the Hong Kong market's key indicator of blue chips, fell 183.37 points, or 1.6 percent, closing at 10,968.26. On Monday, the index had gained 150.31 points. Brokers said share prices fell in reaction to Monday's announcement that last month's unemployment rate stood at 3.5 percent, an increase of 0.6 percentage point from the previous month, and 1 percentage point above the 2.5 percent figure from the end of January.
Jarkarta: Dealers at the Jakarta Stock Exchange said there was selling across the board after Bank Indonesia, the nation's central bank, raised interest rates by between 3 and 6 percentage points in an attempt to strengthen the rupiah. The stock exchange's key Composite Index fell 10.449 points to 497.707. Inflation and unemployment are soaring in Indonesia as it weathers its worst economic crisis since the 1960s. The slump was spurred by a plunge in the value of the rupiah last year.
Manila: Share prices closed lower on profit-taking. The Philippine Stock Exchange index of 30 selected stocks fell 5.12 points, or 0.2 percent, to 2,151.48.
Taipei: Share prices closed lower as investors remained worried about the prospects for technology stocks. The market's key Weighted Stock Price Index fell 68.36 points, or 0.8 percent, to 8,440.20, following Monday's 2.5 percent fall.
Seoul: Share prices closed higher in what brokers described as a technical rebound following recent sharp falls. The main Korea Composite Stock Price Index rose 3.48 points, or 0.7 percent, to 439.21.
Singapore: Share prices closed mostly lower on renewed jitters sparked partly by the interest rate increase in Indonesia, dealers said. The Straits Times Industrials Index fell 1.2 percent, or 18.05 points, 1,492.34.
Kuala Lumpu: Malaysian share prices closed lower as investors found more reason to sell amid flagging confidence in corporate stability. The benchmark Composite Index fell 10.31 points, or 1.6 percent, to 623.98.
Bankok: Thai share prices closed mixed. The Stock Exchange of Thailand index edged up 0.86 point, or 0.2 percent, to 435.23.
Competitive? Canada's #10
LAUSANNE, Switzerland (AP) -- Japan fell to 18th place on the list of the world's most competitive countries last year, while the United States stayed in the top spot, a survey to be released today shows.
Canada retained its number 10 ranking.
Japan's drop in the World Competitive Yearbook annual rankings reflects its economic crisis, the report said. It was in second place five years ago.
The U.S. retained its No. 1 place thanks to free-market policies like privatization and a flexible labor market, the survey said. The study compares the competitiveness of 46 countries by measuring economic strength, government policies, financial services, infrastructure, management, science and technology, education and training.
Singapore and Hong Kong held second and third places, respectively.
NAIC Annual Top 100 Stock Survey of Investment Clubs Shows Industry Diversity; PepsiCo. Knocks Motorola From Number One Position
National Association of Investors Corp.
Highlights from NAIC Better Investing Magazine, April 1998
PepsiCo, Inc. unseated Motorola as the most popular stock among America's investment clubs for 1998, according to the National Association of Investors Corp. (NAIC). The not-for- profit organization of investment clubs and individual investors published its annual ranking of the 100 most popular and widely held common stocks of investment clubs in its Better Investing magazine this month.
Fourteen new companies from eight different industries broke into the Top 100 this year, indicating a healthy diversity among various industries. Less than half of the fourteen new stocks are high technology oriented, showing that investment clubs also view other industries as having long-term growth potential.
Tricon Global Restaurants, a former PepsiCo. subsidiary spin-off that includes Kentucky Fried Chicken, Pizza Hut and Taco Bell, replaced McDonald's Corporation [NYSE:MCD] in the number four position on its first trip to the Top 100. The Golden Arches dropped down to number eight.
Other newcomers to the Top 100 list solidify the fact that clubs have been investigating industries other than technology, consumer products and healthcare that usually make up a large portion of the Top 100. Global Marine, Inc. (No. 68), an offshore driller and oil and gas explorer; Monsanto Co. (NYSE:MTC -No. 77), an agricultural biotechnology and life sciences firm; and United States Filter Corporation (NYSE:USF -No. 79), a water industry leader and acquisitor; have caught the attention of many of America's investment clubs.
Investment clubs may be diversifying, but they have not ignored high technology stocks. Oracle Corporation (Nasdaq:ORCL -No. 24), Gateway 2000 (No. 54), Compaq Computer Corporation (NYSE:CPQ - No. 63), Cabletron Systems (No. 71) and Sun Microsystems (No. 90) all broke into the Top 100 this year for the first time, and Intel Corporation (Nasdaq:INTC) advanced to the number two position from number five last year. Although volatile and sometimes difficult to grasp, the high technology sector is today's major direction for commerce and proves to be a wide path for future growth.
''Even when companies move down in ranking, it seems that the number of clubs holding the stock and the number of shares continue to increase. This indicates that our members hold stocks for a long period of time, which is one of the four key NAIC investing principles, and a key to stock market success,'' said Kenneth Janke, NAIC President and CEO.
NAIC encourages its members to follow four principles when investing, that include buying growth stocks, diversifying portfolios, reinvesting dividends, and holding onto a stock for the long term while investing a set amount each month, regardless of market conditions.
More than 5,489 clubs participated in the 15th annual NAIC survey -- an increase from the 4,600 clubs that responded last year. A chart showing the Top 100 stocks, ranked by number of clubs holding them in their portfolios, can be found on pages 40 and 41 of the April 1998 issue of Better Investing.
NAIC is a national, non-profit organization of investment clubs and individual investors, based in Madison Heights, Michigan. Founded in 1951, NAIC is dedicated to increasing the number of individual investors in common stocks, and to providing a program of investment education and information to help its members become successful, long term, lifetime investors. NAIC currently has over 700,000 members
representing more than 36,000 investment clubs. The average NAIC member invests $38 per month in an investment club. The aggregate monthly NAIC membership investment of new money exceeds $42 million. The total holdings of NAIC members exceed $64 billion. |
