Monday, May 15, 2006 4:15 PM EDT (Thomson Financial Corporate
Services): Canada's benchmark index plunged, losing more than 200 points,
as oil, copper, gold and other metals prices tumbled. Strength could be
found in the financial, consumer discretionary and staple sectors, while
most other sectors posted declines. U.S. stocks were mixed on concern that
inflation will pick up, prompted by the Federal Reserve's rate hike last
week and the possibility of more hikes in the months ahead.
* The S&P/TSX Stock Exchange Composite Index tumbled 206.34 points, or 1.71%.
* Commodity prices plummeted on steep declines in copper, silver, zinc,
gold and crude oil, as hedge funds and other large-scale speculative
investors began to question whether prices have risen too far. Crude oil
retreated, falling below the US$70 a barrel mark, as markets reacted to a
lower demand- growth forecast from the International Energy Agency.
* In economic news, Canada's manufacturing sector showed unexpected
strength in March, with the aerospace and petroleum industries spearheading
a broad advance after two months of declining shipments. Statistics Canada
said manufacturing shipments rose 1.6% to C$51.4 billion in March, after
declining 2.3% in February. Analysts had expected a smaller increase of
1.1% for the March reading.
* On the U.S. economic front, manufacturing activity in the New York
area continued to expand in May, but at its slowest pace in almost a year,
the New York Federal Reserve Bank reported. The bank's Empire State
Manufacturing index fell to 12.4 in May from 15.8 in April. This is the
slowest rate of growth since the index reached 10.2 in June 2005.
* In corporate news, Ivanhoe Mines Ltd. shares fell sharply today, on
concern about a new tax suddenly imposed by the Mongolian parliament. The
company said its board was not expecting the move and "has officially
registered its concern" about the windfall profits tax on the mineral
industry approved Friday. Also, the firm reported a first-quarter net loss
of US$23.2 million, or US$0.07 per share, versus a net loss of US$8.5
million, or US$0.03 per share, in the year-ago quarter. The increase in the
loss from 2005 to 2006 is primarily due to a US$3.2 million decrease in
income from a joint venture, a US$7.7 million decrease in income from the
sale of discontinued operations and a US$6.4 million increase in stock
compensation expense.
* Inco raised its takeover bid for Falconbridge Ltd. by about C$1.9
billion to more than C$19 billion and negotiated a higher break-up fee
should the deal collapse. Swiss company Xstrata PLC is widely expected to
make a counter-bid for the Canadian miner. The Sunday Times reported that
JP Morgan and Deutsche Bank are helping Xstrata prepare a potential £9.5
billion bid (C$20 billion) for Falconbridge. Inco and Falconbridge fell on
the news.
* Soft-drink company Cott Corp. has named Brent Willis, former head of
brewer InBev Asia Pacific, as its new president and chief executive,
replacing John Sheppard.
-- 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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