Thursday, August 24, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Despite a strong earnings report from Toronto Dominion Bank and
news that Jean Coutu Group acquired control of a large American drugstore
chain, Bay Street stayed down amid declines in resource-related stocks.
Copper declined, partly due to the continuing Escondido mine strike in
Chile. Some disappointing U.S. economic reports also weighed on investors
sentiment on both sides of the border.
* The S&P/TSX Stock Exchange Composite Index dipped 62.78 points, or
0.51%.
* In earnings headlines, strong profits were posted by Toronto Dominion
in the third quarter. Earnings jumped 94% to C$796 million, or C$1.10 per
share, from C$411 million last year or C$0.58 per share. TD's dividend was
boosted 9% to C$0.48. Adjusted earnings were C$1.21 per share, beating
predictions of C$1.16.
* Montreal's Jean Coutu Group is selling its Eckerd and Brooks
drugstores in the U.S. to Rite Aid for a total of US$3.4 billion in cash,
stock, and US$850 million of assumed debt. Coutu's shares soared and
boosted the staples sector on the news. Coutu will now own 32% of Rite Aid,
becoming its single biggest shareholder. Both boards have already approved
the sale.
* Harvest Energy Trust, whose modus operandi is snapping up undervalued
oil assets, is breaking the trend by spending C$1.6 billion buying a
company with an oil refinery in Newfoundland. The 115,000 barrel per day
well in Come by Chance is owned by North Atlantic Refining, which was put
up for sale by its European owners last December.
* Biovail is suing the U.S. Food & Drug Administration over its generic
drugs rules. At present, such drugs must be labeled nearly identically to
the bio- equivalent original product, and Biovail has filed a "citizen's
petition" to have input on this issue and all other versions of bupropion
products analogous to its Wellbutrin XL.
* News that Turkey plans to open a gold-exchange fund by the end of
September was unable to move an indifferent market for the yellow metal, as
prices dropped US$4.50 to end at US$628.50.
* Oil rebounded today, hitting US$72 again by noon, after a lack of new
developments with Iran, the absorption of yesterday's American inventories
shock, and news that a natural gas pipeline problem in Prudhoe Bay will
mean 90,000 fewer barrels per day. Crude went up US$0.60 to close at
US$72.36.
* In U.S. economic news, single-family home sales also declined by
4.3%, to a seasonally adjusted rate of 1.072 million in July. Economists
had been looking for a 2.7% decline, and the trend is seen as part of the
softening of the housing industry.
* U.S. big-ticket manufactured (aka durable) goods orders were down
2.4% in July, decreasing by US$5.3 billion. A decrease of 0.7% had been
expected. The downturn was due mostly to fewer orders for aircraft and
automobiles; but as this number is usually very volatile, there was little
effect on American markets.
-- 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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