Friday, August 4, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): After an early-morning rally fed by unemployment news that could
mean no interest rate increases on both sides of the border, the markets
flattened out by mid-afternoon. While the IT and gold sectors gained on
earnings news, lower oil prices slowed the energy sector. Kinross Gold
soared from a loss last year, and there was also good news from
telecommunications giant Telus.
* The S&P/TSX Stock Exchange Composite Index edged up 0.02 points, or
0.00%.
* Statistics Canada released the July employment figures today,
revealing a slight dip of 5,500 in the number of people employed, and a
tick upward in the rate to 6.4%, from 6.1% in June. The high loonie is
starting to cut into hiring in the manufacturing sector, as exports become
more expensive. The markets were relieved as they surmised that the Bank of
Canada had been accurate in its predictions and will probably not now raise
interest rates, and is even expected to lower them in early 2007.
* Hopes of a pause in rates were also felt south of the border, as the
U.S. Labor Dept. released employment figures that showed a jump in the July
unemployment rate to a five-month high of 4.8% as the country created
113,000 jobs, missing forecasts of 145,000. Wages edged up US$0.07 and the
dollar fell.
* Kinross Gold Corporation reaped the benefits of higher gold prices,
reporting second-quarter earnings of US$65.6 million, or US$0.19 per share.
Last year the miner lost US$16.4 million, or US$0.05 a share; however,
higher gold prices and a more efficient cash flow lifted revenues. The
company now plans a US$470 million expansion at its Paracatu property in
Brazil.
* Major drugstore chain Jean Coutu Group posted its fourth-quarter
earnings, reporting a slide as it continued to integrate its Eckerd stores
in the U.S. The firm earned US$0.12 a share, down from last year's US$0.18
a share. Revenue inched up to US$2.9 billion from US$2.8 billion.
* Telecommunications company the Telus Group posted earnings of C$335.6
million, or C$1.02 per share, up from C$0.52 per share last year. Tax
credits accounted for nearly C$120 million of the increase. The company
increased its guidance for 2006 revenue from C$1.5-1.55 billion to C$1.6
billion.
* Apple Computer shares dropped as it admitted it may need to revise
four years worth of earnings reports, due to a possible mishandling of
stock options that has been traced back to September 29, 2002. In the
interim, Apple has amassed US$3.1 billion in profits.
* Atlas Cold Storage Income Trust, one of the largest cold storage
companies in North America, became the target of a hostile takeover bid
worth C$574 million by Icelandic shipping company Avion Group, which wishes
to expand on the continent. Avion indicated this was probably the most it
planned to proffer, and Atlas' stock rose as the market looked for other
suitors on the horizon.
* As the situation did not change in the Middle East and Tropical Storm
Chris kept away from the Gulf, while four oilworkers were kidnapped in the
vital Nigerian fields, oil dropped US$0.70 to close at US$74.76.
* Gold reflected the lack of movement in the markets, moving down only
US$0.90 to end at US$649.60.
-- Carolyn.Crapo@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
the right to update our reports. For more financial information at your
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SOURCE Thomson Financial Corporate Group
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