Wednesday, September 27, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Resources bolstered Canadian shares today, as strength in
commodity prices supported related sectors. Meanwhile, the Dow Jones
Industrial Average nearly reached its all-time high, before pulling back.
* The S&P/TSX Stock Exchange Composite Index leapt 109.18 points, or
0.94%.
* Mixed statistics emerged south of the border today. New home sales
went up for the first time in five months in August, by 4.1% to 1.05
million units, beating estimates of 1.045 million units. However, while the
news was welcome, especially after July's revised figure of 1.01 million
units and a 7.5% plunge, analysts cautioned that prices overall were
dropping and August was still the third weakest month since 2003. The news
was further offset by a 0.5% decline (to US$209.7 billion) in demand for
durable big-ticket goods in August.
* Gold issues rallied on the day. Gold finally broke through the US$600
barrier again to close at the highest level since September 8th, at
US$603.30, up US$6.20. In corporate news, Barrick Gold has extended its
hostile bid for NovaGold to October 12, but sees no reason to raise its
C$1.3 billion, or C$14.50 per share, offer even though NovaGold has
recently been trading just over C$17 per share. The gold giant is extending
the bid partly to allow NovaGold's shareholders to examine the new
assessment of the Donlin Creek project, for which Barrick is already a
minority partner.
* Iamgold rose on news that its estimate of gold deposit at
Quimsachcocha was up 21% from previous forecasts, an increase of 32.6
million tonnes of gold, silver, and copper.
* Elsewhere, early severe winter weather in Alaska held up shipments
from Teck Cominco's Red Dog mine for two weeks, causing delays in its zinc
deliveries into early 2007. Teck accordingly lowered its sales guidance for
the third quarter, but boosted its forecast for its fourth, as it now has
125,000 tonnes to sell in the third quarter instead of 175,000 but 225,000
tonnes in the fourth instead of 200,000.
* Crude oil prices jumped US$1.95 to US$62.96, buoying the TSX energy
sector. The U.S. Energy Department reported gasoline supplies rose 6.3
million barrels to 213.9 million, the largest increase in more than a year;
distillates also shot up 2.6 million barrels to 151.3 million. Crude itself
dropped by a mere 100,000 barrels to 324.8 million. Usually, such news
might pressure prices, but rumours are growing that OPEC will call an
emergency meeting if and when prices go below the US$59.50 threshold. Also,
Saudi Arabia and Kuwait are already supposedly planning to informally lower
their production levels.
* Transition Therapeutics plans to collaborate with Irish pharma giant
Elan on their Alzheimer's drug, AZD-103, in a deal worth US$200 million.
The promising
small-molecule compound is in Phase II trials, and if successfully
marketed will also net Transition up to US$185 million in regular milestone
payments.
* Sears Holding is appealing the Ontario Divisional Court ruling that
blocked its bid for Sears Canada, trying to obtain the 46% of Sears Canada
it does not own. Its C$908 million tender has been extended to October 31.
* As Andrew Fastow was sentenced to six years in prison for his part in
the Enron scandal, he mentioned Royal Bank and Toronto Dominion as two of
the banks that had yet to settle the Newby class-action suit. Fortunately
for the two Canadian financiers, he listed TD as the least responsible and
RBC as second-least responsible of the six. Last year, CIBC had to pay out
US$2.4 billion for its part in helping Enron's execs produce misleading
financial statements. Further details of what the two remaining Canadian
banks may have to pay were not available, but neither lost market share on
Bay Street today.
-- 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
fingertips, please visit http://www.irchannel.com. If you have any questions
please e-mail James Sang at james.sang@tfn.com or call 646.822.6233. For
more information about Thomson Financial visit us on-line at
http://www.thomsonfinancial.com.
***ALERT: Thomson Financial is discontinuing its Canada daily
commentary on Monday, October 2. The last commentary will be released on
Friday, September 29. If you have any questions, or need further
assistance, please contact Linda Shea at Linda.Shea@thomson.com.***
SOURCE Thomson Financial Corporate Group
back to top
