Wednesday, June 7, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Canadian stocks fell as energy prices dipped, dragging down
energy companies. Crude oil prices dropped below US$71 a barrel on hopes
that Iran might co-operate with world powers to curb its nuclear program
and as U.S. petroleum inventories grew more than expected. Elsewhere, gold,
basic material and technology firms also slumped on the day. U.S. stock
declines were driven by concerns that the U.S. Federal Reserve will raise
interest rates again.
* The S&P/TSX Stock Exchange Composite Index tumbled 190.72 points, or 1.63%.
* In other U.S. interest-rate news, Jack Guynn, the president of the
Atlanta Fed bank, sees elevated risk of inflation despite a slowing U.S.
economy. "Headline measures of inflation of late have been bothersome, with
higher oil prices contributing too much of the run-up in those broad
readings," Guynn said in to a business group in Atlanta. "Core inflation .
. . has moved into the upper end of, or beyond, the range I consider
acceptable over time," he added.
* In Canada, mining shares were active after Falconbridge Ltd. agreed
today to sell its Norwegian refinery to miner LionOre Mining International
Ltd. for US$650 million. Falconbridge's sale is aimed at eliminating
competition issues that have stalled its planned union with Inco Ltd.
Falconbridge and LionOre both ended the session higher.
* In related news, the Ontario Securities Commission will consider
Xstrata PLC's request to terminate a shareholder rights plan by
Falconbridge Ltd., a possible roadblock facing the Swiss miner's hostile
takeover of the nickel company.
* Glamis Gold slumped on the day, after the firm reduced its gold
production guidance for 2006 to 620,000 ounces from its prior target of
670,000 ounces, due to mechanical problems at a new mill in Guatemala. In
related news, Desjardins cut its target price on Glamis to C$46 from
C$51.25.
* Home improvement retailer Rona Inc. plans to enter the U.S. market by
2007, and launch new specialty stores geared to women and the
environmentally conscious, the Globe and Mail reported Wednesday.
* Declines in gold were helped along by a stronger U.S. dollar, which
rose on expectations the U.S. Federal Reserve will hike rates again this
month.
-- Michael.O'Brien@contractor.Thomson.com; Thomson Financial Corporate
Services
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SOURCE Thomson Financial Corporate Group
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