Wednesday, May 17, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Canadian stocks suffered a sharp decline as April U.S. inflation
data came in higher than expected, increasing the chance that the Fed will
again raise rates at its next FOMC meeting. The news was felt on both sides
of the border, hitting bank stocks, putting Canada's benchmark index on
track for its sixth consecutive loss and sending U.S. indexes to their
lowest levels in months.
* The S&P/TSX Stock Exchange Composite Index receded 188.81 points, or
1.60%.
* On the economic front, Canadian wholesale sales rose in March,
Statistics Canada reported, climbing 0.8% to C $41.4 billion after a 1%
February drop. Although five of the seven wholesale sectors posted gains,
most of the March increase was attributable to stronger sales of personal
and household goods, up 3.6%, and of machinery and electronic equipment, up
3.3%. Analysts expected sales to increase 0.7%.
* The U.S. consumer price index jumped by 0.6%, a three-month high,
exceeding the 0.5% rise expected by economists. The core rate, which
excludes energy and food, came in at 0.3%, surpassing analysts'
expectations for a 0.2% uptick.
* Canada's heavily weighted financial sector fell on the American data,
which sparked worry that further rate hikes are in the cards. Financials
Royal Bank of Canada and Manulife Financial Corp. both fell on the
development.
* Swiss mining company Xstrata PLC made an offer for the 80% of
Falconbridge Ltd. it doesn't already own, topping a sweetened offer from
Inco Ltd.
* In commodities, light sweet crude for June delivery dipped to their
lowest level in about five weeks, after a weekly U.S. inventory report
showed a third consecutive rise in gasoline stockpiles and refinery output.
Total motor gasoline imports (including both finished gasoline and gasoline
blending components) last week averaged 1.45 million barrels per day, the
third highest weekly average ever.
* Meanwhile, gold continued to suffer today, despite a rise in U.S.
inflation that initially boosted precious metals.
* In corporate news, CAE Inc., the global provider of simulation
technology and training, posted a fourth-quarter profit of C$0.04 a share,
down from C $0.44 a share a year earlier. Earnings from continuing
operations however, rose to C $0.09 a share from C $0.06 a share last year.
Revenue increased to C $284.3 million from C $262.7 million. The stock
ended the session lower.
* In the U.S., computer giant Hewlett Packard Co. said its profit rose
51% in the most recent quarter, topping analyst expectations. The
PC-maker's shares rose following the report.
-- 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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