MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING THURS. JULY 16, 1998 (1)
MARKET NEWS
The drooping Canadian dollar and moribund commodity prices suppressed gains on the Toronto stock market Thursday, while American stocks sailed to unprecedented levels. In New York, the Dow Jones industrial average climbed 93.72 to a record 9,328.19.
A fresh batch of stronger than expected corporate profits and a surge in technology shares pulled Wall Street out of an early profit-taking sag. The technology-heavy Nasdaq composite index rallied, on very heavy volume, to a seventh straight record close, and first above 2,000.
The Dow is up more than 17 per cent this year, while the Nasdaq has gained more than 27 per cent.
Asian stock markets closed mostly higher Thursday on news that a senior politician known as aggressive in pursuing economic reforms would seek the prime minister's job in Japan.
CANADA
Toronto stocks finished on a positive note, helped by gains in heavyweight golds and other sectors, but the market was held back from matching New York's jump by a weak Canadian currency.
It's the second time in three days that the Dow has dramatically outpaced the TSE, which is bearing the weight of a plunging currency and commodity prices dragged lower by the Asian crisis, said Katherine Beattie, an analyst with Standard and Poor's MMS in Toronto.
"It's clear there's caution in our stock market," she said. "While the Dow continues to set all-time highs, we're well off our all-time high because of the Canadian dollar and because of commodity prices."
Gold and oil prices lost ground Thursday, but the gold and silver and the oil and gas TSE index groups rose, with gains of 2.07 per cent and 0.72 per cent respectively.
That's likely the doing of bargain-hunters convinced resource stocks can't get much cheaper, Beattie said.
The Toronto Stock Exchange's closely watched 300 Composite Index rose 17.69 points or 0.24 percent to 7405.82 points in lighter than usual trading. Turnover totaled 91.7 million shares worth C$1.4 billion. Advancing issues topped declines 513 to 478 while 311 closed flat.
Nine of Toronto's 14 subgroups ticked upward, led higher by a 2.1% percent rise in its important gold and precious minerals group, which makes up nearly 5 percent of the index. Some consider large gold stocks such as Barrick Gold Corp (ABX/TO) as a hedge against the currency, said Fred Ketchen, ScotiaMcLeod's director of equity trading. The mining giant rose C$0.60 to C$27.15. "A little bit of the positive news is in the gold sector,'' he said. ''These things got pretty cheap. People are looking for something to hold onto.'' Franco-Nevada Mining also gained 45 cents to $29.65; Placer Dome was up $0.55 at $16.60. Euro-Nevada Mining climbed $0.50 to $20.00.
But, he added, ''I think the market is marking time because the dollar continues to be a (weakness).'' Investors are still cautious about the outlook for the Canadian currency. The dollar ended around C$1.4884 (US$0.6719) on Thursday, still lolling around record lows after months of declines.
The TSE oil & gas composite index gained 0.7%. Among the sub-components, the integrated oils gained 1.8% and oil & gas producers 0.5%. The oil & gas service group fell 1.7%.
Carmanah Resources was the third most active issue on the TSE, up $0.07 to 41.61 on volume of 3.5 million shares. Also among the top 50 most active traded issues on the TSE were Pioneer Natural Resources, Petro-Canada, Gulf Canada Resources, GHP Exploration, Renaissance Eneergy, Tarragon Oil & Gas and Pacalta Resources. Service issues were not represented.
Talisman Energy gained $0.90 to $41.95, Amber Energy $0.85 to $13.10, Imperial Oil $0.65 to $26.40, Suncor Energy $0.65 to $50.10, Petro-Canada $0.50 to $24.40 and Paramount Resources $0.50 to $14.00. Among service related issues, American ECO gained $0.75 to $8.45.
On the downside, Summit Resources fell $0.50 to $4.30 and Chieftain International $0.50 to $32.40. Among oil and gas service issues, Dreco Energy Services fell $1.00 to $38.05, Precision Drilling $0.85 to $25.60 and Shaw Industries A $0.50 to $17.20.
Conglomerates managed a gain of 0.6%, thanks in large measure to Canadian Pacific, which climbed $0.75 to $39.75.
Real estate was up 0.5%, utilities 0.4%, consumer products 0.3%. Rounding out the gainers were paper and forest products, metals and minerals and merchandising.
On the flipside, communications and media stocks, one of the TSE's strongest performers of late, retrenched with a 0.5% loss, followed by transportation and environmental services stocks 0.5%, pipelines 0.3%, industrial products 0.2%. Financial services also just eeked to the downward side.
CanWest Global Communications A shares lost $0.10 to $26.40; Southam fell $0.40 to $27.50. Torstar slipped 15 cents to $23.25.
Among the transports, Canadian National Railway gained $1.25 to $81.90; Laidlaw Inc. was unchanged at $16.10. Shares of Air Canada (AC/TSE) topped the most active list, slipping C$0.80 to C$11.30 on Thursday on concerns about rising labor costs at the airline, analysts said.
Stock in Toronto-area Hyal Pharmaceutical Corp. (HPC/TSE) gained more than half its former value after news that the biotechnology firm had secured a worldwide licensing agreement for its skin cancer treatment. Shares rose C$0.76 or nearly 53 percent to C$2.20 with 3.8 million sharess traded.
The Alberta Stock Exchange's combined value index fell 5.88 to 2084.61. Decliners outnumbered advancing issues 135 to 119 with another 138 unchanged.
It would appear as though the rally in gold and oil stocks is focusing on the larger cap issues, said Kerm Yerman. You can see that these two sectors have been stronger in recent days on the TSE while the ASE & VSE, loaded with small cap gold and oil issues, have been in a pretty consistent downtrend.
Oil and gas issues among the top 25 most active traded issues on the ASE included Alta Pacific Capital, Anvil Resources, Veteran Resources, Raptor Capital, Stpom Energy, First Star Energy, Prize Energy and Meota Resources.
Invader Exploration gained $0.20 to $0.75, Jettstar Resource $0.17 to $0.44, Belair Energy $0.08 to $0.38 and Commonwealth Energy $0.07 to $0.62.
On the downside, Granger Energy C fell $2.09 to $2.71, AltaQuest Energy $0.25 to $2.05, Solid Resources $0.25 to $6.85, Draig Energy $0.20 to $1.50, Nevarro Energy $0.20 to $0.29, Arrival Energy $0.15 to $1.00 and First Star Energy $0.11 to $0.50.
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