Wednesday, May 31, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Canadian stocks rose today on strength in the energy and gold
sectors and a rise in shares of ATI Technologies Inc. Economic news on both
sides of the border was also in focus today. U.S. stocks advanced, despite
the release of minutes from the Federal Reserve's May 10 meeting, which
indicated that an uptick in core inflation raised the possibility of
another interest rate hike in June.
* The S&P/TSX Stock Exchange Composite Index edged up 39.11 points, or
0.33%.
* In economic news, the Canadian economy bounded ahead by a 3.8% annual
rate in the first quarter of 2006, Statistics Canada says, exceeding
analysts' expectations. Gross domestic product expanded 0.9% on a quarterly
basis.
* On the U.S. economic front, Federal Reserve policymakers seem to have
been uncertain about the prospects for further interest rate hikes after
their May 10 meeting, according to minutes released today. The Fed saw an
increase in energy and commodity prices, as well as the weaker dollar, as
possible harbingers of inflation, but acknowledged the risk of slower
economic growth as previous interest rate increases and a cooling housing
market take their toll. Separately, the Chicago purchasing managers' index
rose to 61.5% from 57.2% in April, much stronger than the expected decline
to 56.2%.
* Technology stocks bounded higher today. ATI Technologies Inc. rose on
speculation that the graphics chipmaker could join with Advanced Micro
Devices Inc. The two chip players could announce a "tie-up" shortly,
according to an RBC Capital research note. Both firms would not comment on
"rumors."
* Elsewhere, JPMorgan upgraded Research In Motion to "overweight" from
"neutral," sending those shares higher.
* Within the basic materials sector, the board of Inco Ltd. rejected a
hostile offer from Vancouver-based Teck Cominco Ltd. Wednesday, calling it
an "opportunistic and calculated attempt to grab Inco at a bargain basement
price."
* Falconbridge Ltd.'s board rejected a takeover bid from Switzerland's
Xstrata PLC and still favors Canadian rival Inco Ltd.'s offer. The copper
and nickel miner said Xstrata's bid is "not a superior proposal."
* Meanwhile, healthcare stocks tumbled on the day. Extendicare Inc., a
nursing home provider, said it plans to spin off its Assisted Living
Concepts Inc. unit on the New York Stock Exchange and turn itself into a
real-estate income trust. The new REIT will be listed in Toronto.
Extendicare shares fell on the news.
* Oil prices dipped to US$71.29 a barrel, after OPEC signaled it would
keep production steady Thursday at its ministerial meeting in Caracas,
Venezuela.
-- Michael.O'Brien@contractor.Thomson.com; Thomson Financial Corporate
Services
This is Thomson Financial Corporate Services Canadian Commentary, which
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SOURCE Thomson Financial Corporate Group
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