Tuesday, May 9, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Canadian shares were higher today thanks to strength in mining
and metal stocks, as investors pondered whether M&A activity will continue
and as gold prices topped US$700 an ounce. In the U.S., stocks were mixed
as an upgrade of General Motors Corp. competed with Dell Inc.'s profit
warning. Meanwhile, investors are anticipating an expected U.S. interest
rate hike tomorrow.
* The S&P/TSX Stock Exchange Composite Index rose 34.01 points, or
0.28%.
* In commodities, oil futures rose above US$71 a barrel as ongoing
concerns over Iran's nuclear ambitions were tempered by expectations of
rising U.S. gasoline stocks. Separately, gold futures reached an intraday
high of US$702.20 an ounce, before closing at US$701.50. Gold initially
found strength on the euro's gains vs. the greenback, while renewed
tensions between Iran and the U.S. and stronger crude oil prices also
played a role.
* The Canadian dollar surpassed US$0.91 for the first time since
January 1978, as the U.S. dollar receded on expectations the U.S. Federal
Reserve will hold rates steady following an expected hike tomorrow.
* In corporate news, Falconbridge Ltd. rose after a report that Xstrata
PLC chairman Willy Strothotte is considering all the "options" regarding
Falconbridge Ltd. The company, which is 19.9% held by Xstrata, agreed in
October to a takeover by competing nickel producer Inco Ltd. The deal is
now under question, after Teck Cominco Ltd. offered to buy Inco for C$17.8
billion Monday. Inco and Teck shares both ended higher.
* Petro-Canada announced that it would close its Terra Nova offshore
oil field Sunday because of a mechanical failure in a gear box. It will
remain closed until the fall, which may cut production by about three
quarters. Nevertheless, the stock was higher on the day.
* Teranet, the Ontario government's electronic land registry business,
filed for an IPO today, which is expected to raise up to C$700 million. The
offering is expected to reap C$400 million dollars for the province, which
does not own Teranet, but effectively controls it via fee regulation and
veto ownership changes.
* In the U.S., Dell shares dove after the firm warned it would fall
short of its own first-quarter sales and profit targets due to "pricing
decisions." In another U.S. development, Deutsche Bank upgraded U.S.
automaker GM to "hold," citing recent moves to generate liquidity and
progress with its restructuring; the company's shares rose on the move.
* U.S. investors are awaiting the Fed's next move on interest rates
when policymakers meet Wednesday. A majority of analysts and investors
believe that tomorrow's meeting will bring another quarter-point hike-the
sixteenth in a
row for the Fed-and are focusing on whether the next meeting, in late
June, will bring more of the same, or a pause in the tightening campaign.
* On the U.S. economic front, inventories at U.S. wholesalers increased
by 0.2% in March, while sales climbed 0.7%, the Commerce Department
estimated. Economists had been expecting a 0.5% rise in inventories for
March. Also, February's inventory gain was revised to 0.9% from the 0.8%
reported earlier.
-- 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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