MARKET WRAP FOR DAY ENDING WED. 12/30/98 / With Focus On Canada + Oil & Gas (Page 1 of 6)
Toronto Stocks Close Lackluster Session - Lower In Light Trading
Toronto's key stock index finished lower after a lackluster session Wednesday and traders expected volumes to dwindle still further on New Year's Eve, with players skipping out early to chill the champagne.
The New York stock market stalled Wednesday, ending an eight-session winning streak that brought the Dow Jones industrial average within striking distance of its all-time high. On Wall Street, the Dow fell 46.34 points to close at 9,274.64. With one more trading session remaining this year, the blue-chip index is almost exactly 100 points below its record high close, set Nov. 23. With its recent 530-point winning streak, the Dow is up 17.3 per cent for the year.
Shares in smaller companies moved higher in the afternoon, hinting at the start of the "January effect" bounce often seen in that sector.
The bellwether Toronto Stock Exchange 300 Composite index gave investors little to celebrate, closing down 41.14 points, or 0.64 percent, at 6431.02. But advancing shares led decliners 523 to 407, leading to a mixed overall result. A total of 259 issues were unchanged. A total 71 million shares exchanged hands worth a value of $1.1 billion. New highs totaled 18 while 22 issues reached new lows.
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Chart - TSE 300
canoe.quote.com
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Canada's most important stock indicator has lost four per cent of its value since the end of last year. At one point this year, the TSE 300 was up more than 17 per cent. That was on April 22, when the index stood at 7,822.25.
Traders who were hoping for a year-end uptick have been disappointed by Toronto's dismal performance relative to New York. The TSE 300 is down 4 percent on the year to date versus a rise of 17.3 percent in the Dow Jones Industrial Average.
Toronto is also a laggard when it comes to recovering from the autumn correction in the markets. The Dow Jones is less than 100 points from its all-time closing high set November 23 while the TSE 300 is nearly 1400 points below its closing record, reached on April 23.
"I think that at the present time there just doesn't seem to be a whole lot of interest in the Canadian market," said Fred Ketchen, senior vice-president and director of equity trading at ScotiaMcLeod Inc.
"And I don't see a whole lot happening until we see a turnaround, particularly in the commodity side."
Among active issues, the Toronto 35 Index Participation Fund dropped 55 cents to $34.85 on 3.1 million shares traded. Online auctioneer Bid.Com International suffered from profit-taking among North American Internet stocks, easing $0.30 to $3.80 in trade of 2.1 million shares. The class B shares of aerospace and transportation company Bombardier Inc. rose to a 52-week high of $22.55 before pulling back to close $0.55 lower at $21.45 on volume of 1.6 million shares.
Teleglobe Inc.closed up $1.55 to $56, on volume of 384,942 shares. Shares in the international telecommunications provider closed at a 52-week high yesterday after the firm sent out an invitation for a reception, where it said it would announce a "new venture that will impact the international activities" of the firm. The shares are the second best performers in the Toronto Stock Exchange 300 composite index, up 157% this year.
Spectra Premium Industries Inc. finished up $1.60 to $20.60, on volume of 34,956 shares. Manufacturing after-market automobile replacement parts, including fuel tanks and radiators, may not be glamorous, but the firm's shares are up 100% this year. For the nine months ended Oct. 31 earnings rose 33% to $12.1-million on an 82% rise in revenue to $69.4-million. Earnings have actually fallen to 45¢ a share from 49¢ in the year-earlier period, because of two public offerings raising the number of outstanding shares by 54% to 28.9 million. The company's earnings have been bolstered by at least nine acquisitions in the past year. However, it boasts that consolidated net margins have held in at 17.4% throughout 1998.
Among the stocks posting the heaviest losses were Fairfax Financial, down $3.05 to $550.95, Merrill Lynch Canada fell $2.90 to $105.00 and DaimlerChrysler was down $2.75 to $150.00.
In Toronto, stocks continued to slide backward Wednesday as losses were reported in 11 of the 14 stock groups.
Shares in some of Canada's largest communication and media companies, including Thomson Corp., down $1.65 to #35.35 and Torstar Corp., down $0.30 to $17.95, posted heavy losses Wednesday. Quebecor Printing Inc. also dropped $0.45 to $33.00. As a result, the communications stock group was the biggest loser, giving up 1.4 per cent of its value. The maker of light-activated drugs spent a brief moment in the spotlight earlier this week when its shares raced to a 52-week intraday high of $38. News that its lung cancer-fighting therapy had garnered wider U.S government approval fuelled investor enthusiasm among U.S. investors on Monday, but the momentum did not carry over.
The consumer products sector performed poorly, losing 1.4%. Among the stocks posting the heaviest losses was Seagram Co., which dropped $1.95 to $57.55 on volume of 335,000 shares. George Weston Ltd. fell $1.15 to $58.20.
In the merchandising group, which slipped 1.3%, Canadian Tire fell $1.65 to $39.95 on volume of 299,000 shares and Reitman's Canada Ltd fell $0.50 to $19.50.
The conglomerates group fell 1.2% with Power Corp down $0.90 to $32.40.
The industrial group fell 1.1% with Northern Telecom falling $1.75 at $76.15, Dofasco Inc. fell $0.75 to $18.85 and Magna International lost $0.80 to $95.45.
The gold/precious minerals sector fell 0.8%. Barrick Gold Corp fell $0.65 to $29.60 and Placer Dome Inc. was down $0.10 to $17.55.
The metals/minerals group fell 0.8% with Certicom falling $1.20 to $13.80 and Franco Nevada Mining Corp losing $0.20 to $29.40 and
The financial services sector fell 0.6%. In addition to Merrill Lynch, Bank of Montreal fell $0.70 to $61.55 on 431,000 shares, Royal Bank declined $0.35 to $76.00 on 418,000 shares, CIBC fell $0.25 to $37.45 on 1.19 million shares and T-D Bank was down $0.15 to $53.50 on 1.19 million shares.
The transportation/Environmental group fell 0.5% with Canadian National Railway Co. falling $1.35 to $78.15 on volume of 151,000 shares. Canadian Pacific fell $0.25 to $$28.70 on volume of 723,400 shares.
The paper/forest products sector fell 0.5% with MacMilan Bloe losing $0.60 to $15.00 on 268,400 shares.
Pipelines fell 0.4% with TransCanada Pipelines losing $0.15 to $$22.40 on volume of 611,500 shares.
TSE 300 sectors closing on an upward note included real estate 0.2%, oil and gas 0.2% and utilities 0.1%.
TSE Oil & Gas & Futures Scenario
NATURAL GAS
NYMEX Natural Gas Ends Up On Weather
NYMEX Hub natural gas, driven by short covering ahead of colder weather and estimates for tonight's AGA report, ended up Wednesday in thin trade, then gained more on ACCESS after supportive weekly
inventory data.
In the day session, February jumped 10.5 cents to close at $1.886 per million British thermal units after trading today between $1.78 and $1.89. On ACCESS, January climbed above $1.90 shortly after the AGA report.
Earlier, March, which dipped last night to a new low of $1.79, settled eight cents higher at $1.879. Other deferreds finished up by one-half to 5.8 cents.
"We were up today on the colder weather, but a three-day cold snap does nothing for me. Looking at the forecast, the East Coast is back to normal next week," said one East Coast trader, adding any rally from here was probably a good sale.
While traders said tonight's AGA report was on the high side of expectations and mildly supportive, most agreed the huge year-on-year stock surplus was still likely to temper any bullish sentiment from the report or from the weather.
AGA said Wednesday U.S. gas stocks fell last week by 167 bcf to 86 percent of capacity, at the high end of Reuter poll estimates in the 155-170 bcf range. Overall storage slipped to 633 bcf, or 29 percent, over last year.
Eastern inventories lost 93 bcf to 86 percent of capacity but remained 16 percent above last year. Consuming region west storage, which declined 38 bcf for the week, was still up 43 percent from 1997 levels. Stocks in the producing region dropped 36 bcf and stood 56 percent over year-ago.
WSC expects below to much-below normal East Coast temperatures Wednesday and Thursday to moderate to about normal levels by Sunday. Midwest readings will dive to as much as 15-20 degrees F below normal Wednesday and Thursday, then warm to slightly above normal by Saturday and Sunday.
In Texas, below seasonal temperatures Wednesday will climb to as much as 12 degrees above seasonal Friday, then dip to normal to 10 degrees below normal over the weekend. The West will start the period 10-12 degrees above normal, then moderate to normal or slightly below by Saturday and Sunday.
Technical traders noted February this morning closed Monday's overhead gap at $1.86. While some agreed today's close above that level could lead to a test of psychological resistance at $2.00, they said only a settle above key resistance at the $2.14-2.18 gap would turn the chart picture bullish.
Minor support was pegged at yesterday's new contract low of $1.77. Major buying was expected at $1.61, which is the spot continuation low for the year.
In the cash Wednesday, January gas at Henry Hub firmed more than a nickel to the low-$1.80s. Midcon pipes were up slightly to the low-$1.80s. In the West, January quotes on El Paso Permian were little changed in the low $1.70s.
Gas next month at the New York city gate was flat to up slightly in the mid-$2.40s, while Chicago was talked a couple of cents higher in the low-to-mid $1.90s.
The NYMEX 12-month Henry Hub strip rallied 8.7 cents to $2.007. NYMEX said an estimated 44,020 Hub contracts traded today, down sharply from Tuesday's revised tally of 116,523.
NYMEX will close at 1300 EST Thursday and will be closed Friday for the New Year's Day holiday.
US Spot Natural Gas Prices Strengthen On Cold Forecast
U.S. spot natural gas prices edged higher Wednesday, with the bulk of December swing carrying a slight premium to January bidweek levels, industry sources said.
The cold front now delivering single digits to the upper Midwest is expected to arrive in the Northeast Thursday, Weather Services Corp. said.
With the cold weather expected to linger in the Midwest through week's end, sources said there was a fear of freeze-offs in the market after last week's activity when prices surged to over $20 per mmBtu in the Northwest as a result of force majeures.
Next week's forecast shows continued colder-than-normal weather in the central plains, with a brief spell of milder weather early next week in the Midwest but cooling off again in the Northeast later in the week.
Swing gas prices at Henry Hub were quoted a few cents higher at $1.84-1.85 per mmBtu, while January business hovered around $1.80-1.81, about 35 cents under December indices.
Houston Lighting and Power's 1,250-megawatt South Texas 2 nuclear unit was back to 75 percent power by Wednesday morning as it continued to ramp from Monday's unexpected outage.
In the Midcontinent, next-day prices rose by about three to five cents to the low- to mid-$1.80s on pipelines like Panhandle, ANR and NGPL, while January business was reported done mostly in the mid-$1.80s. The Northern at Demarcation market was pegged at $1.87-1.88 for Thursday and at $1.87-1.90 for January.
Chicago city-gate gas was talked an equal amount higher in the low-$1.90s for Thursday and $1.92-1.95 for January.
Northern Border's expansion line into the Midwest (Chicago Project) was reportedly flowing at a rate of roughly 200 million cubic feet per day (mmcfd) out of a total capacity of 700 mmcfd since it began service last Tuesday, Midwest sources said.
In west Texas, next-day prices on El Paso Permian and San Juan remained fairly steady in the low-$1.70s, while next month pricing clung to the swing market in the high-$1.60s to low-$1.70s.
Southern California border prices were quoted in the low-$2 area for January and at $2.00-2.06 for Thursday.
In New York, city-gate swing prices surged to over $3 in late morning trade as a sharp drop in temperatures was forecast for Thursday in the Northeast. Next month pricing was pegged in the mid-$2.40s.
Withdrawal estimates for today's American Gas Association storage report range from 104 to 221 bcf, with most seen at 155-170 bcf, according to a Reuters survey. This is compared with a 96 bcf draw a year ago.
Canadian Natural Gas Up On Cold, January Forecast
Cold weather and forecasts calling for chilly temperatures into January bolstered Alberta natural gas spot prices on Wednesday, industry sources said.
Although the volume of day business slowed in advance of the New Year's Day holiday, prices were up at most Canadian price points as forecasts called for cold weather to continue across North America, marketers said.
Prices at Alberta's AECO storage hub rose about five cents over Tuesday trade, to C$2.52/2.53 per gigajoule.
The January contract price ranged widely, starting the day as low as C$2.49 per GJ, but rising to the C$2.70 per GJ mark as news of the long-range weather forecast spread, marketers said.
Trade at Westcoast Energy's Station 2 compressor in British Columbia was slow, with prices dropping back to track AECO at C$2.50/2.55 per GJ.
Day prices at the export points were mixed, as Sumas/Huntingdon trade was discussed in a wide range, settling in at US$1.70/1.75 per million British thermal units, down about 20 cents from Tuesday.
But to the east, prices were quoted about eight cents higher on the day at Emerson, in the range of US$1.83/1.88 per mmBtu.
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Chart References
NYMEX HENRY-Hub NATURAL GAS PRICE CHARTS
oilworld.com
WEST Tx WAHA-Hub NATURAL GAS PRICE CHARTS
oilworld.com
OIL INDUSTRY COMBINED GRAPH CHARTS
oilworld.com
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