Friday, May 12, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Canadian stocks dropped sharply on steep declines in energy,
gold and mining shares, as a recent ramp-up in speculation took its toll on
the markets. On the bright side, financial and technology sectors bounced
higher. In the U.S., stocks dropped as concerns about inflation and higher
interest rates persisted.
* The S&P/TSX Stock Exchange Composite Index plunged 127.36 points, or 1.05%.
* On the U.S. economic front, the trade deficit narrowed by US$3.6
billion to US$62 billion in March; economists had predicted a US$1.4
billion increase in the deficit. Also, the University of Michigan's
consumer-sentiment index for May plummeted 8.4 points to 79. Economists
were expecting it to only decline by 1.4 points to 86.
* In commodities, oil futures dropped after the International Energy
Agency cut its forecasts for global oil demand, saying that high energy
prices are affecting demand and that the trend could continue. Oil prices
fell by more than US$1.00 on the day.
* Gold stocks also plunged on the day, alongside a sharp fall in the
yellow metal, following strong gains earlier in the week.
* Turning to earnings within the basic materials space, Iamgold Corp.
posted a record profit, thanks to higher gold production. The firm's net
income jumped to US$0.13 a share, compared to US$0.05 a share a year ago,
while the mean Thomson First Call estimate was US$0.07 a share. Revenues
leapt to US$44.5 million from US$29.50 million last year.
* Agnico-Eagle Mines has approved the LaRonde 2 gold project and
capital spending of C$210 million. The LaRonde mine in northwestern Quebec
is Canada's largest gold deposit. Meanwhile, last night, the firm posted a
surge in its first-quarter profit; although, excluding items, Agnico-Eagle
missed the mean Thomson First Call estimate. Agnico shares fell on the
news.
* Elsewhere, Hudbay Minerals advanced, as the firm's first-quarter net
income surged to C$0.70 a share from C$0.12 a share a year ago, while
revenue leapt to C$208 million from C$152 million.
* Bema Gold said that unrealized non-hedge derivative losses,
stock-based compensation expense and future income taxes led the firm to
post a wider first-quarter loss of US$0.08 a share from US$0.04 a share
last year. Bema's adjusted loss was US$0.01 a share in the most recently
reported quarter.
* Jaguar Mining Inc.'s first-quarter loss widened to C$0.18 a share
from C$0.06. Citing a number of factors, including exchange rates, the
company has cut its production forecast for 2006 to 55,000 ounces at a cash
cost of about C$300 per ounce from 65,000 ounces at $265 per ounce.
* In the U.S., KeyBanc Capital Markets upgraded General Motors to "buy"
from "hold" on hopes that Delphi, GM's biggest parts maker, will reach a
new labor contract with its union workers and avoid a strike.
-- 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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