Friday, August 18, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): The TSX flattened out today as good news from Research In Motion
and a slight rise in oil prices was balanced by unfortunate earnings news
from Dell, layoffs from Ford, and a surprise drop in wholesale trade
figures. The Chinese government raised interest rates to 6.12%, and U.S.
consumers' confidence faltered in the latest University of Michigan survey.
Gold continued to fall, but shares rose as a new consortium snapped up an
Australian company.
* The S&P/TSX Stock Exchange Composite Index dipped 11.10 points, or
0.09%.
* RIM had its revenue targets raised by RBC Dominion Securities to
US$100 from US$73, on news of its plans to make new BlackBerry multimedia
units that will be able to perform as cameras, music, and video players.
The Waterloo company has deals in place with many phone company networks,
and is confident this will give it a leg up on the competition.
* Disappointing news emerged from the U.S., as Dell reported its
second- quarter profit fell 51%, with a net income of US$502 million, or
US$0.22 per share, compared to US$1.02 billion, or US$0.41 per share, last
year. The world's largest personal computer maker also admitted that it had
been the subject of an informal SEC probe for its revenue booking
practices. Meanwhile, Ford Motor is planning to reduce its fourth-quarter
production in North America by 21%, about 168,000 cars, which will involve
the loss of about 350 jobs in Windsor.
* Inco has less than two weeks to choose a suitor, as a legal provision
in the agreement between Inco and Phelps Dodge means it must "not remain
neutral" to a hostile bid for longer than 15 days. Therefore, Inco has
until August 29th to consider its options with regard to Phelps and new
hostile bidder CVRD.
* Premier Gold, the brand-new spinoff of Wolfden Resources, will be
buying Sedimentary Holdings of Australia for A$87.5 million, or C$74.7
million, continuing the trend of consolidation and expansion in the gold
industry.
* Iran announced again today it would pursue its nuclear ambitions,
rattling the oil market enough to produce a slight rise of US$0.29 to end
at US$70.35.
* In economic news, June wholesale trade data was issued for Canada,
and despite a forecast of gains of 0.3%, there was instead a drop of 0.6%
in June, compared to 0.9% gain in May. Slow automotive sales were a large
component of the decline; overall inventories rose 0.8%. The loonie dropped
in response.
* Finance Minister Jim Flaherty plans to investigate Statistics
Canada's math more closely, since an error was revealed earlier this week
that resulted in a miscalculation of the CPI for nearly five years. While
the agency is officially under the (loose) purview of the Industry
Minister, Flaherty's Ministry has control over much of its budget.
* On the U.S. economic front, consumer sentiment sank in early August
to the lowest level since October, according to media reports of
proprietary research from the University of Michigan. The consumer
sentiment index dropped to 78.7 in August from 84.7 in July. Economists
were expecting the index to slide to 83.6. The index is at its lowest level
since October.
-- 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
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SOURCE Thomson Financial Corporate Group
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