Thursday, April 27, 2006, 4:15 PM EDT (Thomson Financial Corporate
Group): Canadian shares declined today on fears that higher interest rates
in China could put a dent in Asian demand. The news offset upbeat comments
from the U.S. Fed about a possible pause in that country's rate-hiking
campaign. Those comments combined with Bank of Canada Governor David
Dodge's indications for more modest rate hikes sent the loonie to a fresh
14-year high against the U.S. dollar.
* The S&P/TSX composite index tumbled 134.04 points, or 1.09%.
* In U.S. economic headlines, Fed chairman Ben Bernanke spoke before a
Congressional hearing today and said that the Fed may pause its current
rate- hiking campaign. Elsewhere, U.S. initial claims by first-time
applicants for state unemployment benefits rose by 11,000 last week to a
seasonally adjusted 315,000. Claims have ranged between 300,000 and 320,000
for the past nine weeks.
* Meanwhile, an unexpected announcement by China's central bank that it
will raise a key lending rate to 5.85% from 5.58% to curb growth mitigated
the impact of the optimistic U.S. Fed announcement. It was the first move
in a year and a half, and put pressure on Canada's commodity-related stocks
and currencies.
* In commodities, zinc and copper tumbled and oil extended declines
after China's rate announcement sparked concern about weaker demand. Gold
for June delivery closed down US$5.70 at $636.30 an ounce, while light
sweet crude oil for June delivery fell US$0.98 to US$70.95 a barrel on the
New York Mercantile Exchange.
* Celestica reported that first-quarter adjusted net earnings fell to
C$0.08 a share from C$0.15, and revenue dropped to C$1.93 billion from
C$2.15 billion. The company puts second-quarter revenue at C$2.05 billion
to C$2.25 billion and adjusted share earnings at C$0.8 to C$0.16.
* Methanex Corp.'s first-quarter net rose to C$1.20 a share from
C$0.63. Excluding items, earnings were C$0.79 a share, up from C$0.63. The
mean estimate was for a profit of C$0.75.
* Biomira Inc. reported its first-quarter loss widened to C$0.07 a
share from C$0.06; revenue fell to C$380,000 from C$804,000.
* Aspreva Pharmaceuticals swung to a first-quarter profit of C$1.25 a
share from a loss of C$0.46 as a result of royalty revenue for CellCept and
a large reconciliation payment. Meanwhile, Raymond James raised the firms
price target.
* Home Capital Group's first-quarter net rose to C$0.41 a share from
C$0.39 a shares, while revenue rose to C$64 million from C$55.9 million.
* Within the airline group, WestJet Airlines Ltd. said it returned to a
profit in the first quarter, netting C$0.10 a share, compared with a loss
of C$0.08 a share a year earlier. That firm's shares gained on the day.
* Domtar Inc. saw a first-quarter loss of C$0.10 a share from a profit
of C$0.04. Excluding items, the loss was C$0.13, less than the mean loss
estimate of C$0.16.
* In the U.S., shares of Intel Corp. gained, after the firm's chief
executive said he plans a broad restructuring. Meanwhile, Exxon Mobil Corp.
fell; the oil giant posted higher first-quarter profits, but was below
estimates. Also, XM Satellite Radio Holdings Inc. reported a wider
first-quarter loss, and said regulators are probing its marketing
practices.
-- Michael.O'Brien@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
the right to update our reports. For more financial information at your
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SOURCE Thomson Financial Corporate Group
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