Monday, May 8, 2006, 4:15 PM ET (Thomson Financial Corporate Group):
Canadian stocks managed small gains on the day, thanks to a surge in
material and mining shares. M&A activity was in focus today. In the U.S.,
stocks were mixed as investors mulled over the possibility of further
interest rate hikes while absorbing news of several M&A announcements.
* The S&P/TSX Stock Exchange Composite Index advanced 24.09 points, or 0.20%.
* Mining and material stocks jumped in Toronto, after mining company
Teck Cominco Ltd. offered to buy competitor Inco Ltd. for C$17.8 billion in
cash and stock. Teck Cominco said its proposed deal is contingent on Inco
not completing its own proposed C$12.5 billion offer for rival Falconbridge
Ltd., made in October. Teck Cominco said it had been in takeover
discussions with Inco last year, prior to Inco's Falconbridge bid. Teck
Cominco already owns 8.9 million Inco shares. Inco rallied on the news,
while Teck ended lower.
* And in the oil industry, Shell Canada Ltd. agreed to buy BlackRock
Ventures Inc. for C$2.4 billion in cash. The buy ends months of speculation
about Calgary-based BlackRock. Shell Canada fell on the news.
* Also in oil, crude oil prices slipped below US$69 a barrel as a
softening gasoline market temporarily eclipsed geopolitical concerns about
Iran, Nigeria, Bolivia and Venezuela. Crude futures lost more than US$4 a
barrel last week after U.S. inventories data revealed higher-than-expected
stockpiles.
* With no fresh economic data for investors to pore over, U.S.
investors were relatively reserved today, primarily due to the Fed's
Wednesday interest rate meeting. Some on the Street are hoping that
indications of a cooling economy mean the Fed might leave the overnight
rate alone at its next meeting in June, rather than implementing another
hike, but there is no clear consensus about this possibility.
* Meanwhile, U.S. investors were encouraged by Wachovia's US$25 billion
takeover of Golden West Financial Corp. and Thermo's C$10.6 billion offer
for Fisher Scientific International Inc. Berkshire Hathaway Inc. also made
its first acquisition of an overseas company.
* Turning to the technology group, Sierra Wireless rallied, after the
firm introduced its first product, named the MC8775 PCI Express Mini Card,
for next generation HSDPA networks. Also, Piper Jaffray raised the firm's
price target.
* Toronto-based mortgage company Xceed Corp. cautioned that it would
record lower-than-expected second-quarter mortgage fundings due to new
competition; shares in Xceed plunged nearly 20% on the statement. The
high-risk, high-ratio mortgage provider said it expects to report mortgage
fundings of C$133.2
million in the period ended April 30, down from C$181.6 million in the
prior- year period.
-- Michael.O'Brien@contractor.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
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SOURCE Thomson Financial Corporate Group
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