Monday, December 22, 2008

Bay Street Lower on Oil & Metals

Roger Biduk writes:

Another wave of bad economic sentiment wore through the Toronto stock market Monday as oil prices fell and Japanese auto giant Toyota Motor Corp. projected its first-ever full-year operating loss.
Toronto's S&P/TSX composite index fell 302.47 points to 8,249.53, and the Canadian dollar moved higher at 82.03 cents US, up 0.26 of a cent.
The TSX Venture Exchange was down 7.02 points to 692.02.

The energy sector lost six per cent as the light, sweet crude contract fell $2.45 to US$39.91 a barrel on the New York Mercantile Exchange.
Observers suggest slowing oil demand in China and Japan will cause the Organization of Petroleum Exporting Countries to further cut production. Last week, OPEC cut production to 2.2 million barrels a day.

Toyota provided more evidence of companies' struggles amid a sharp drop around the world in demand for products of all kinds.
The Japanese automaker slashed its earnings forecast for a second time, warning that it now expects to report its first-ever operating loss for the fiscal year through March. While Toyota doesn't directly trade on the Canadian stock market, the company's weakness is worrying Canadian investors already concerned about the fate of the so-called Detroit Three carmakers - GM, Ford and Chrysler - and the long-term health of the global auto sector.
Auto jobs are key to the success of Canada's manufacturing economy centred in Ontario and Quebec.
Toyota's latest comment also adds further pressure to Canadian companies like autoparts maker Magna International (TSX:MG.A) which supplies manufacturers around the globe. Magna stock was nearly four per cent lower, down $2.73 to $33.51.

Roger Biduk writes:
On the TSX, diversified metals stocks were the main decliner, dropping 7.7 per cent, as Teck Cominco Ltd. (TSX:TCK.B) fell 66 cents to $5.15.

The gold sector was down 4.4 per cent as the February bullion contract rose $9.80 to $847.20.

Also facing Canadian investors were the lowest consumer confidence levels in more than a quarter century. The Conference Board of Canada says confidence fell for its third consecutive month and dropped the index 3.3 points to 67.7, lower than during the 1991 recession and the lowest since 1982.

Information technology stocks were 2.8 per cent lower as Research in Motion (TSX:RIM) dukes it out with Certicom Corp. (TSX:CIC) over a takeover bid which Certicom is trying to block. RIM shares lost $3.29 to C$50.03, while Certicom rose eight cents to $1.80 - well above RIM's offer price of $1.50 per share.

AbitibiBowater Inc. (TSX:ABH) shares gained 13 cents, or 24.5 per cent, to 66 cents after the company said it would receive $197.5 million, less expenses, for sale of its interest in hydro-electric generating assets in Ontario. The unidentified buyer would assume $250 million in term debt held by ACH Limited Partnership, which is owned 75 per cent by AbitibiBowater.
Fronteer Development Group (TSX:FRG) says it intends to buy the common shares of Aurora Energy Resources Inc. (TSX:AXU) that it doesn't already own, giving Aurora shareholders 0.83 of a Fronteer share for each Aurora common share they own. Fronteer shares dropped 94 cents to $2.19 while Aurora shares gained 59 cents to $1.56.

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Saturday, December 20, 2008

Financials Lift Bay Street

Roger Biduk writes:

A late-day revival in financials helped push the Toronto stock market higher Friday as a multibillion-dollar taxpayer guarantee is expected to finally end the uncertainty around the asset-backed commercial paper market.
Toronto's S&P/TSX composite index advanced 126.65 points to 8,552.00 for a gain of 37 points this week.
The TSX Venture Exchange ticked 1.41 points lower to 699.04.
The Canadian dollar fell 1.11 cents to 81.77 cents US after Statistics Canada reported the inflation rate dropped to two per cent last month, from 2.6 per cent in October, as gasoline price eased 14.4 per cent.

The TSX financial sector was up 1.3 per cent after Ottawa and the governments of Ontario, Quebec and Alberta agreed to "partner" in supporting a restructuring of $32 billion in commercial paper that has been frozen for the past 16 months. National Bank (TSX:NA), pummelled this week because of its ABCP exposure, gained $3.24 or 12.7 per cent to $28.86.

Another bright spot was Research In Motion Ltd. (TSX:RIM), up $6.59 or 14 per cent to $53.32 after the BlackBerry maker posted a 66 per cent surge in quarterly revenue to US$2.78 billion despite a jerky rollout of new smartphones. RIM also issued a jolly outlook for the holiday season and beyond.
Auto parts stocks were mixed after the Bush bailout. Magna International (TSX:MG.A), Canada's largest parts maker, rose 80 cents to $36.24 while Linamar (TSX:LNR) declined 12 cents to $3.54.

Roger Biduk writes:
The Toronto energy sector was up 0.5 per cent as the January crude oil contract, which expired at the end of the session, fell $2.35 to US$33.87 a barrel on the New York Mercantile Exchange, following the previous day's decline of almost US$4 a barrel. But the February contract moved up 69 cents to US$42.36 as the American currency strengthened.
EnCana Corp. (TSX:ECA) fell 60 cents to $53.90. Petro-Canada (TSX:PCA) was ahead 15 cents to $27.05 after a tentative settlement to end a 13-month-old lockout at its Montreal oil refinery, which has been kept running by managers.

Gold moved lower with the February contract in New York down $23.20 to US$837.40 an ounce, but the TSX gold sector rose 3.25 per cent. Kinross Gold Corp. (TSX:G) rose $1.07 to $20.75.

The industrial sector was the biggest weight on the TSX index, with Canadian Pacific (TSX:CP) down $1.48 to $39.75 while Bombardier Inc. (TSX:BBD.B) declined six cents to $4.14.
Potash Corp. (TSX:POT) fell $1.34 to $88.66 after the fertilizer giant lowered its 2008 profit guidance due to wilting demand for crop nutrients in a blighted global economy. PotashCorp also issued layoff notices to more than 900 employees.

The consumer discretionary sector boosted the TSX by the end of the day as media and retail stocks soared. CanWest Global Communications (TSX:CGS.A) advanced 5.5 cents to 45 cents, and Torstar (TSX:TS-B) ran ahead $1.67 to $10.02.
Rona Inc. (TSX:RON) gained $1 to $11.89 and Reitmans Canada (TSX:RET.A) rose $1.38 to $11.13.

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Thursday, December 18, 2008

Roger Biduk - Bay Street Drops on Oil

Roger Biduk writes:

A wave of pentup selling on the Toronto stock market sent the main index down almost 300 points Thursday as energy stocks sold off and oil headed lower.
Toronto's S&P/TSX composite index closed down 298.76 points to 8,425.35 on heavier than usual volume as the exchange resumed business after being halted Wednesday by a technical problem.
The TSX Venture Exchange was off 23.01 points to 700.45.

Shares in TMX Group (TSX:X), operator of the TSX and TSX Venture Exchange, declined 39 cents to $24.21. The company blamed its day-long halt on "technical issues with data feeds."

The CDN$ was down 0.68 cent to 82.88 cents U.S. Negative economic data kept coming, while Federal Finance Minister Jim Flaherty appointed an 11-member economic advisory council which includes former B.C. finance minister Carole Taylor and businessmen James Irving and Jim Pattison.

The energy sector led TSX losses, falling 7.6 per cent as the January crude contract in New York, which expires Friday, slid $3.84 to US$36.22 a barrel as pessimism about demand outweighed OPEC's decision to cut daily output by 2.2 million barrels. The February contract declined $2.94 to US$41.67.
EnCana Corp. (TSX:ECA), closed down $2.58 to $54.50. Suncor Inc. (TSX:SU) shed $1.91 to $24.80.

Statistics Canada reported its composite leading index fell 0.7 per cent in November. It was the third straight retreat, and the largest since January 1991, for the forward-looking index. Statistics Canada also tallied a sharp 0.9 per cent decline in October retail sales, pulled lower by price reductions.

The TSX financial sector moved down 2.2 per cent as National Bank (TSX:NA) added to its string of losses, down $2.14 to $25.62 while Royal Bank (TSX:RY) surrendered 41 cents to $34.25.

The base metals sector tumbled seven per cent as Teck Cominco Ltd. (TSX:TCK.B) retreated 67 cents to $5.38 and Sherritt International (TSX:S) dropped 38 cents to $11.76.

The gold sector dropped eight per cent as the February bullion contract on the Nymex lost $7.90 to US$860.60 an ounce. Goldcorp Inc. (TSX:G) faded $4.86 to $34.49.

The carmakers' woes pulled down auto parts suppliers. Magna International (TSX:MG.A) was down 26 cents to $35.44 while Linamar (TSX:LNR) dropped 49 cents to $3.66.
Telecom equipment maker Nortel Networks (TSX:NT) was a major loser on the TSX, losing eight cents or 11.8 per cent to 30 cents on continuing worries about the firm's survival.

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Wednesday, December 17, 2008

Roger Biduk - Technical Problems Shut Down Bay Street

Roger Biduk writes:

The Toronto stock market missed an entire trading day because of a technical problem for the first time in its history Wednesday - and has said only that it intends to reopen at 9:30 a.m. ET Thursday.
Market operator TMX Group Inc. (TSX:X) said its new Quantum trading engine performed flawlessly but data feeds were interrupted, and "because the data feeds provide information to investors to guide their trading decisions, trading was halted to ensure market integrity."
It gave no specifics on the nature of the problem, saying information would be provided when its investigation is complete.

This isn't the first time the Toronto market has closed unexpectedly: it was shut down after the September 2001 terrorist attacks, and about a year before that it collapsed for four hours under a flood of trading in former market heavyweight Nortel Networks.

Judging by the performance of Canadian bellwether stocks interlisted in New York, financials had a negative session a day after the U.S. Federal Reserve cut its key interest rate to between zero and 0.25 per cent amid a worsening economy.
Royal Bank was down 45 cents to US$28.65, CIBC rose 41 cents to US$41.73, Research In Motion Ltd. moved ahead 73 cents to $40.67.

EnCana Corp. fell $1.45 to US$46.36 as the January crude contract on the New York Mercantile Exchange settled $3.54 lower at US$40.06.
The slippage in crude prices came even as the Organization of Petroleum Exporting Countries cut its output quotas by 2.2 million barrels a day. It's the largest-ever one-time reduction as the cartel struggles to support prices that have fallen from a July peak of US$147 a barrel.
The OPEC move came as new data showed U.S. crude oil inventories increased by 500,000 barrels last week

The Canadian dollar added 0.35 cent to 83.56 cents US, after U.S.-dollar weakness had pushed the loonie up two cents Tuesday.
The February bullion contract in New York rose $25.80 to US$868.50 an ounce.

Roger Biduk writes:
In corporate news, Canadian Pacific Railway Co. (TSX:CP) plans 600 temporary layoffs and other cost cuts as freight traffic sags. Its shares ticked ahead nine cents to US$35.15 in New York.
Heavy equipment dealer Finning International Inc. (TSX:FTT) said it is cutting 600 jobs worldwide to "rebalance" its business for the economic downturn.
Insurer Kingsway Financial Services Inc. (TSX:KFS), under pressure from a major shareholder, says it is cutting costs by US$20 million next year.
Quebecor World Inc. (TSX:IQW) said Pierre Karl Peladeau and Erik Peladeau, heirs of founder Pierre Peladeau, have resigned from the commercial printer's board. This comes as former parent company Quebecor Inc., headed by the Peladeaus, sues Quebecor World, which is restructuring under bankruptcy protection.
Health-sciences company MDS Inc. (TSX:MDS) reported a fourth-quarter loss of US$255 million on a big after-tax writedown related to the troubled Maple medical-isotope reactor project. The results are preliminary and do not include another writedown of $270 million to $370 million related to goodwill at its MDS Pharma Services division. Transat AT Inc. (TSX:TRZ) said non-cash and non-operating items drove the travel operator into the red for its 2008 financial year, with a net loss of $50 million. Transat took a $45.7-million writedown on asset-backed commercial paper and a $2.3-million foreign exchange hit.

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U.S. Interest Rate Cut Spurs on Bay Street

Roger Biduk writes:

Stock markets closed sharply higher Tuesday after the U.S. Federal Reserve cut its key interest rate to a range of zero to 0.25 per cent - a record low, and down from the one per cent target in place since October.
In Toronto, the S&P/TSX composite index moved up 262.28 points to 8,724.11 as all sectors except health care turned positive.
The TSX Venture Exchange was up 6.65 points to 723.46.
The Cdn$ rose as much as 2.25 cents and closed with a gain of 2.02 cents at 83.21 cents US. The American currency weakened after the Fed made clear it will flood the system with greenbacks to encourage spending.

The TSX financial group turned positive after the Fed move, rising 1.5 per cent. But Bank of Montreal fell $2.22 or 6.8 per cent to $30.35 following news of a $1-billion-plus stock offering at $30 per share. It was the latest in a series of moves by the big banks to bolster their capital reserves.
Royal Bank (TSX:RY), which floated a $1-billion share issue last week, gained 65 cents to $34.90.

Statistics Canada reported manufacturing sales decreased 1.8 per cent in October to a seven-year low.

The TSX energy sector moved ahead 3.75 per cent although the January crude contract on the New York Mercantile Exchange slipped 91 cents to US$43.60 a barrel. Oil traders appear to have discounted an expected output-quota cut Wednesday by the Organization of Petroleum Exporting Countries.
On the TSX, EnCana Corp. (TSX:ECA) improved $2.87 to $57.82 and Suncor Inc. (TSX:SU) advanced $1.40 to $26.61.

The base-metal sector was up 3.25 per cent with Teck Cominco Ltd. (TSX:TCK.B) ahead 33 cents to $5.98 while Inmet Mining Corp. (TSX:IMN) climbed $1.93 to $19.42.

The industrial group gave major lift to the TSX, rising more than four per cent with Canadian National Railway (TSX:CNR) ahead $2.09 to $44.
The telecom sector was up slightly but Telus Corp. (TSX:T) declined a dime to $34.03 after disclosing it expects next year's operating profit will be flat while revenue grows four to six per cent. Telus also plans to boost capital spending by 12 per cent to $2.05 billion.

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Sunday, December 14, 2008

Canadian Auto Parts Makers in Big trouble

Roger Biduk writes:

With the "Big 3" needing a bailout or face possible bankruptcy, being a manufacturer supplying parts to them is no joy right now.
Shares of Canadian autoparts makers have taken a beating due to the decline in the U.S. auto sector, but the companies will face a much harsher reality if one or more of the Detroit Three is allowed to fail.

Parts companies already run on razor-thin margins, and a bankruptcy of one of the big automakers would mean suppliers would not be paid. That would lead to a catastrophic chain reaction that would ripple through the industry, said Linda Hasenfratz, president and chief executive of Linamar Corp , in an interview.
"You are looking at shutting down the entire automotive industry in North America," she said.
"Just to be clear on the ramifications, not just Ford , General Motors and Chrysler ... but everybody. Everybody goes down, because really, you are only as strong as the weakest link in the chain, and some of the weakest links in this chain are the suppliers."

More than 65 percent of suppliers to Ford, GM and Chrysler, also supply Toyota Motor Co and Honda Motor Co , so even the offshore-based manufacturers would be hard hit.
Worries of a bankruptcy of one or all of the Detroit Three are reflected in Linamar's share price, which is down 79 percent since the beginning of the year.
At C$4.20, it is now on the verge of being removed from the S&P/TSX composite index due to failure to meet listing requirements, which include maintaining a certain level of market capitalization and volume.
No Canadian autoparts manufacturer has escaped seeing its stock being clobbered this year. Magna International Inc is down 56 percent at C$35.76, and Martinrea International Inc is down 84 percent at C$1.94.

Thirty-five percent of Linamar's sales go to the Detroit Three, according to RBC Capital Markets. For Magna, that number jumps to 52 percent, and it's about 80 percent for Martinrea.
Michael Willemse, an analyst at CIBC World Markets, said sales volumes would likely decline further for U.S. car sales -- they fell 37 percent in November alone -- on a Detroit Three bankruptcy.
"If one or all three of the Big Three go bankrupt, I would expect sales volumes to decline because customers would be nervous about buying a vehicle by a bankrupt OEM (original equipment manufacturer)," he told Reuters.
Willemse wrote in a note, after the U.S. Senate rejected a $14 billion auto bailout bill late Thursday, that the risk of bankruptcy at each of the Detroit Three had become more likely, with Chrysler in danger of folding within the next few weeks.
Many in the industry have also said that GM will not make it into the new year without government support.

LOANS OR BAILOUT COMING - BUT WHAT AFTER?

Stock markets on Friday reacted negatively to news the U.S. Senate had killed the auto aid bill, but they bounced back strongly within minutes of the U.S. government saying it may use some of the money set aside in the $700 billion earmarked for fiscal relief to help the beleaguered auto sector.
Richard Cooper, vice-president of Canadian operations at industry consultant JD Power and Associates, said he believes some sort of aid will be made available, but that will only be the beginning of a long process to bring the companies back from the brink of liquidation.
A bailout "is really only survival for the next few weeks or so," he said.
The next phase would be restructuring. In Canada, the shares of autoparts makers would likely remain depressed, as U.S. sales aren't expected to pick up any time soon, and there is a lot of uncertainly about what the automakers and the government have been planning.
"That kind of uncertainly is really taking it's toll in the market right now," said Cooper.

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Saturday, December 13, 2008

Roger Biduk - Bay Street Reverses to the Upside

Roger Biduk writes:

The Toronto stock market came back from a sharp loss to end the session higher Friday after the U.S. Treasury said it would step in to prevent a collapse of the major American automakers.
The S&P/TSX composite index closed up 123.55 points to 8,515.45, gaining 398.42 points or 4.9 per cent this week, mainly due to higher base and precious metal stocks.
The TSX Venture Exchange was down 5.3 points to 718.74, while the Canadian dollar moved down 1.14 cents to 79.92 cents US.

Losses for Canadian auto parts makers moderated with Magna International (TSX:MG.A) dipping six cents to $35.51, while Linamar Corp. (TSX:LNR) slipped 16 cents to $4.20 after General Motors (NYSE:GM) said Friday it will shut down virtually all of its North American production for the entire month of January.
Shares in BCE Inc. (TSX:BCE) lost 80 cents to $21.23 after the telecom company said it is reinstating its dividend at 36.5 cents per share quarterly. The parent company of Bell Canada also plans to buy back as much as five per cent of its common stock. This follows the collapse of its $52-billion deal to be taken over by an investor group led by the Ontario Teachers' Pension Plan.

The Toronto financial sector ticked 3.3 per cent higher as Royal Bank (TSX:RY) added 84 cents to $34.80 and Scotiabank (TSX:BNS) added 64 cents to $30.90.

The TSX energy sector slipped 0.35 per cent oil prices fell sharply on another round of poor economic news that showed consumers cutting back on spending for a record fifth straight month.
The January crude contract in New York fell $1.70 to US$46.28 a barrel. That followed two days of gains on the expectation of a big cut in production when the OPEC cartel meets next Wednesday. Suncor Inc. (TSX:SU) was down 90 cents to $25.07.

The gold sector was a bright spot, up five per cent even as the price of the precious metal declined $6.10 to US$820.50. Barrick Gold Corp. (TSX:ABX) moved ahead $1.01 to $38.91.
The base metals sector climbed 2.2 per cent with Teck Cominco Ltd. (TSX:TCK.B) ahead 18 cents to $5.45.

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Thursday, December 11, 2008

Roger Biduk - Energy & Financials Sink Bay Street

Roger Biduk writes:

The Toronto stock market closed sharply lower as early gains in energy and mining stocks disappeared, losses in financials picked up amid a new wrinkle in the restructuring of commercial paper while telecom stocks fell with death of the BCE takeover attempt.
Toronto's S&P/TSX composite index tumbled 242.1 points to 8,391.9.
The Canadian dollar gained 1.67 cents to 81.06 cents US as the U.S. currency weakened.
The TSX Venture Exchange moved up 7.9 points to 713.44.

The TSX financial sector slipped 3.75 per cent with National Bank (TSX:NA) the biggest loser, down $3.10 or 9.4 per cent to $29.81 and Manulife Financial gave back 97 cents to $18.98.
The slide followed a report that Ottawa could be asked to provide between $5 billion and $10 billion to salvage the restructuring of the seized-up market for Canadian asset-backed commercial paper, or ABCP. The plan has been stalled for months by market upheaval.

The energy sector in Toronto gave up early strong gains even as the price of crude in New York ran ahead $4.46 to US$47.98 a barrel, falling two per cent as both Petro-Canada (TSX:PCA) and EnCana Corp. (TSX:ECA) said they are reducing 2009 capital spending - Petro-Canada by about one-third to $4 billion.
EnCana slashed its cash-flow outlook and reduced its capital budget to US$6.1 billion, from $7 billion this year.
PetroCan shares slipped two cents to $28.98, EnCana gave back $4.42 to $55.22 and Canadian Natural Resources (TSX:CNQ) gained $2.10 to $44.75.
Precision Drilling Trust (TSX:PD.UN) surrendered 90 cents to $7.65 after warning it may cut its distributions as financing costs swell for its proposed takeover of Grey Wolf Inc.
The energy sector announcements came as oil prices rose above US$45 a barrel with traders expecting a significant OPEC production cut next week to boost the market. Light sweet crude traded later up $4.46 at US$47.98 a barrel on the New York Mercantile Exchange.

The TSX gold sector gave back 3.25 per cent even as bullion advanced $17.80 to US$826.60 an ounce. Iamgold Corp. (TSX:IMG) was down 22 cents to $5.88 after a friendly deal to acquire Orezone Resources Inc. (TSX:OZN) in an all-stock transaction valued at US$139 million. Orezone shares jumped 34.5 cents or 197 per cent to 52 cents.

Lululemon Athletica Inc. (TSX:LLL) stock fell $4.35 or 33 per cent to $8.80 after reducing its expectations for the holiday quarter and next year - including a drop in same-store sales - "based on the trends in the macro environment and the weaker Canadian dollar."
T-shirt and sportswear manufacturer Gildan Activewear Inc. (TSX:GIL) reported its earnings shrank by almost half in its latest quarter to US$21.4 million, pulled down by a US$26.9-million settlement of a long-running tax dispute. Its stock fell 35 per cent, losing $6.15 to $11.60.

Research In Motion Ltd. (TSX:RIM) has lined up an agreement to acquire Chalk Media Corp. (TSXV:CKM) - which creates and deploys media-rich content delivery to RIM's BlackBerry smartphones - for $23.1 million in cash. Chalk shares soared 8.5 cents or 189 per cent to 13 cents while RIM shares were off $1.99 to $46.59.
After markets closed, Canadian data encryption specialist Certicom Corp. (TSX:CIC.TO) called a takeover offer by RIM "highly opportunistic" and said it "undervalues" Certicom

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Wednesday, December 10, 2008

Roger Biduk - Commodities Bolster Bay Street

Roger Biduk writes:

Energy and mining stocks led the way to a solid triple-digit rise on the Toronto stock market on Wednesday as financial stocks lost ground for a second day.

Toronto's S&P/TSX composite index closed up 236.44 points at 8,634.
The TSX Venture Exchange was up 19.52 points to 705.54 while the Canadian dollar moved ahead 0.31 of a cent to 79.39 cents US as commodity prices ticked higher.

Prime Minister Stephen Harper says there will be no blank cheque for automakers and he wants to see the U.S. aid package before deciding on the Detroit Three's plea for billions of dollars in help from Ottawa.

The TSX base metals sector ran ahead 8.25 per cent amid news from global miner Rio Tinto that it is cutting 14,000 jobs worldwide and reducing capital spending.
The news was enthusiastically received by investors who sent Rio Tinto's shares up $4.05 or 12. per cent to US$37.40. It's not yet known how Rio Tinto's cutback will affect Canadian operations. The London-based global miner is afflicted by weak metal prices and weighed down by debt from last year's US$38-billion acquisition of Montreal-based Alcan.
Teck Cominco Ltd. (TSX:TCK.B) advanced 56 cents to $4.83 as copper rose 5.2 cents to US$1.4955 pound while Equinox Minerals (TSX:EQN) charged ahead 20 cents to $1.28.

The TSX energy sector moved up 5.45 per cent amid rising oil prices. The January crude contract in New York gained $1.45 to US$43.52 a barrel ahead of an expected production-quota cut next week by the Organization of Petroleum Exporting Countries.
EnCana Corp. (TSX:ECA) advanced $3.61 to $59.64 while Suncor Energy (TSX:SU) improved $2.73 to $26.70.
Nexen Inc. (TSX:NXY) shares advanced 85 cents to $21.73 as it announced plans to spend 15 per cent less in 2009 than it did this year as it ramps down investment in the Long Lake oilsands venture and some conventional oil properties.

The gold sector rose 10 per cent as bullion gained $34.60 to US$808.80 an ounce. Goldcorp Inc. (TSX:G) added $3.56 to $34.50 while Barrick Gold Corp. (TSX:ABX) headed $3.40 higher to $38.50.

Bank stocks continued to be a drag with the sector down almost two per cent a day after the Bank of Canada slashed its main interest rate by 75 basis points. Scotiabank (TSX:BNS) declined $1.10 to $31.24 while National Bank (TSX:NA) gave back $1.96 to $32.91.
Investors were also braced for more moves by the banks to raise money to bolster their capital requirements and protect dividend payments.

Teck stocks were under pressure with Nortel Networks shares (TSX:NT) falling 15 cents or 23.45 per cent to 49 cents, after hitting a new 52-week low of 46 cents.
The Wall Street Journal reported the telecom equipment company hired legal counsel to explore bankruptcy court protection from creditors. Nortel responded that it is "a viable partner for the long term" and noted it has no debt maturity until 2011.

George Weston Ltd. (TSX:WN) shares climbed $1.48 to $62.40 after it announced the sale of its fresh baked-goods business in the United States to Grupo Bimbo of Mexico for US$2.5 billion.
MDS said its revenue and operating profit are below previous guidance, and it is taking a US$260-million writeoff of the MAPLE medical-isotope reactor, along with a goodwill writedown of as much as $370 million at its MDS Pharma Services division. Its shares closed up three cents at $8 after hitting a new 52-week low of $6.82.

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Roger Biduk - Commoditites Lead Bay Street at Midday

Roger Biduk writes:

Toronto's main stock index shot higher on Wednesday morning on higher oil and metals prices and as optimism over global stimulus measures, including a possible bailout of the U.S. auto industry, lifted market sentiment.

The resource-laden materials sector led the way up, climbing 8.1 percent, with Barrick Gold up 7.6 percent at C$37.75, and Goldcorp up 9.7 percent at C$33.94.
Mining stocks rose as global miner Rio Tinto said it would cut 14,000 jobs, slash capital spending by more than half and sell more assets as it battles a collapse in commodity prices.
The beaten-down resource stocks were higher, in part, in response to the news, analysts say.

The TSX's two big fertilizer companies were stronger. Agrium Inc rose 6.2 percent to C$37.05, and Potash Corp of Saskatchewan was up 8 percent at C$84.41.

Financials were down 0.7 percent with Great-West Lifeco Inc sinking 7.6 percent to C$20.60 after it said on Tuesday it plans to issue a total of C$1 billion in common shares to the public and to its controlling shareholder, Power Financial Corp .

Shares of George Weston Ltd rose 2.3 percent to C$62.30 after Mexico's Bimbo said on Wednesday it had reached an agreement to buy Weston's U.S. breadmaking unit for $2.38 billion.

Nortel Networks Corp sank 21.9 percent to 50 Canadian cents after the Wall Street Journal reported the telecoms equipment maker has sought legal advice on a bankruptcy protection scenario in the event that its restructuring plan fails.
Nortel spokesman told Reuters "no bankruptcy filing is imminent, but added the company has engaged advisers to help it plot its future.

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Tuesday, December 9, 2008

Roger Biduk - Recession Hits Bay Street

Roger Biduk writes:

The Toronto stock market dropped more than 150 points Tuesday as the Bank of Canada declared the economy was moving into a recession and cut its main interest rate by three-quarters of a point to 1.5 per cent.
Bank stocks led the way down as Toronto's S&P/TSX composite index fell 169.56 points or two per cent to 8,397.56.
The TSX Venture Exchange closed down 12.16 points to 686.02.

The big interest rate cut by the central bank and a new equity issue by the Royal Bank (TSX:RY) pushed the financial sector down more than five per cent.
The banks also held back from passing the whole three-quarter-point policy rate cut along to their customers, trimming the prime lending rate by half a point.
RBC lost $2.21 to $35.29 after announcing a new issue up to $2.3 billion worth of common stock. TD was down $3.40 to $42.10 and CIBC shed $2.96 to $50.31.

The loonie closed down 0.66 cents at 79.08 cents U.S., after dropping more than a cent shortly after the central bank cut its key rate to the lowest level since 1958 and added that "the global recession will be broader and deeper than previously anticipated."

In Toronto, the telecom sector was off 2.25 per cent as BCE Inc. (TSX:BCE) fell $2.15 to $22.50 after the company said it has hired accounting firm PricewaterhouseCoopers to help make its case to KPMG auditors who ruled it did not meet a key condition of its deal to be acquired by a group led by the Ontario Teachers' Pension Plan.

The industrial sector gave back 1.4 per cent as Canadian National Railway (TSX:CNR) declined $1.56 to $42.75.

The energy sector was flat as oil prices flattened on expectations of weakening demand. The January crude contract in New York declined $1.64 to US$42.07 a barrel after rising almost US$3 Monday.
On the TSX, Canadian Natural Resources (TSX:CNQ) lost $1.30 to $40.90 while Suncor Inc. (TSX:SU) improved 67 cents to $23.97.
Crescent Point Energy Trust (TSX:CPG.UN) was up 78 cents to $21.59 as it set its 2009 capital budget at $225 million and said it expects to boost oil production by four per cent.
Major Drilling Group International Inc. (TSX:MDI) eased 97 cents to $9.99 after an August-October profit of $29.3 million, up from $22.6 million a year ago, as revenue rose 22 per cent. However, the global provider of mine-drilling services warned of a slowdown next year, especially in base metals.

The gold sector rose 1.45 per cent with the February bullion contract ahead $4.90 to US$774.20. Barrick Gold Corp. (TSX:ABX) faded 75 cents to $35.10.

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Roger Biduk - Bay Street Lower at Midday

Roger Biduk writes:

Blue chips in Toronto were sinking Tuesday afternoon, led by a drop in financial stocks after the Bank of Canada unexpectedly cut its key interest rate on Tuesday by three-quarters of a percentage point to a 50-year low of 1.50 percent and declared the Canadian economy to be in a recession.

The S&P/TSX composite index was off 79.87 points to 8,487.25.
The Canadian dollar, meanwhile, was trading 0.59 cents lower at 79.19 cents US.
Six of the TSX sub-groups traded higher this afternoon -- health-care stocks were up 3.05 percent followed by a 1.34 percent gain in gold issues and 0.95 percent rise in energy stocks.
Gold was gaining 40 cents to $769.70 US an ounce.

On the downside -- financial stocks fell 3.76 percent; telecom issues shed 2.18 percent and consumer discretionary stocks dipped 1.75 percent.

Meanwhile, the TSX Venture Exchange slipped 8.55 points to 689.63 and the NASDAQ Canada was off 5.32 points at 406.11.

On the corporate front -- Canada's largest bank Royal Bank of Canada says it plans to issue up to $2.3 billion in common shares to beef up its regulatory capital ratio.
Davie Yards Inc. has announced an agreement to get a US$10-million financial injection from shipbuilder Bergen Group of Norway and Davie client Cecon ASA, a Norwegian subsea installation contractor.
Major Drilling Group International Inc. climbed 15 cents to $11.11 after an August-October profit of $29.3 million, up from $22.6 million a year ago, as revenue rose 22 per cent. However, the global provider of mine-drilling services warned of a slowdown next year, especially in base metals.

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Monday, December 8, 2008

Roger Biduk - Bay Street Soars Over 400 Points

Roger Biduk writes:

The Toronto stock market posted a gain of more than 400 points on Monday, led by solid advances in energy and financial stocks.
Toronto's S&P/TSX composite index surged 450.09 points or 5.55 per cent to 8,567.12, while New York's Dow Jones industrial average moved up 298.76 points to 8,934.18.
TSX Venture Exchange moved up 13.61 points to 697.92.

The Canadian dollar climbed 1.06 cents to 79.74 cents U.S. as traders looked ahead to an expected interest-rate cut of at least a half percentage point by the Bank of Canada on Tuesday.

The TSX energy sector moved up 7.5 per cent as oil prices bounced off multi-year lows after the president of the Organization of Petroleum Exporting Countries hinted at a "severe" production cut at OPEC's meeting Dec. 17. Light sweet crude rose $2.90 to US$43.71 a barrel on the New York Mercantile Exchange.
EnCana Corp. (TSX:ECA) shot up $4.75 to $55.61 on the TSX while Canadian Natural Resources (TSX:CNQ) gained $2.87 to $42.20.

Financials climbed 4.25 per cent as Royal Bank (TSX:RY) rose $1.10 to $37.50 and CIBC (TSX:CM) advanced $3.52 to $53.27.

The base-metals sector climbed 11 per cent while copper surged 12.45 cents to US$1.498 a pound, sending Teck Cominco Ltd. (TSX:TCK.B) up 32 cents to $4.25. FNX Mining Co. (TSX:FNX) added 37 cents or 17 per cent to $2.54.

Gold stocks ran up as bullion rose $17.10 to US$769.30 an ounce. Goldcorp Inc. (TSX:G) gained $2.45 to $30.30.

Other prominent stocks taking the TSX higher Potash Corp., up $9.49 or 14 per cent, to $76.99 while shares in BCE Inc. (TSX:BCE) gained $1.80 or 7.9 per cent to $24.65 on a report the telecom has a new auditor's opinion that the company would be solvent after a leveraged buyout by a group led by the Ontario Teachers' Pension Plan.
The deal had appeared dead last week after KPMG ruled BCE would not meet a key solvency test after taking on more than $30 billion in debt, as contemplated in the takeover. That solvency test is a condition of the deal.

JLL Partners Inc. of New York has made a bid for the 71 per cent of Patheon Inc. (TSX:PTI) it does not already own, offering US$2 per share for the international drug manufacturer. Patheon shares rocketed $1.12 or 104.6 per cent to C$2.19.

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Sunday, December 7, 2008

Roger Biduk - Late Day Recovery on Bay Street

Roger Biduk writes;

The Toronto stock market staged a late day recovery to close higher as financials largely turned positive amid pessimism about the economy and lower commodity prices.
Toronto's S&P/TSX composite index rose 59.21 points to 8,117.03 with losses led by energy stocks, as investors also took in grim Canadian data.
The TSX Venture Exchange was 13.55 points lower to 684.31.
The Canadian dollar closed up 0.44 cents at 78.68 cents U.S.

Despite the late day rally, it was still a brutal week on the TSX, which tumbled 12.4 per cent thanks to big declines in all the major sectors of the market.

In Canada, Statistics Canada reported the economy shed 70,600 jobs last month, the biggest one-month drop since 1982, and the unemployment rate rose to 6.3 per cent. And analysts warned investors to expect more awful data.

The TSX energy sector was down 0.55 per cent as the January crude contract in New York slid $2.86 to US$40.81 a barrel, plunging 25 per cent this week on growing worries about demand in the face of worsening economic conditions.
EnCana Corp. (TSX:ECA) rose $1.04 to $50.86, while Canadian Natural Resources (TSX:CNQ) fell $1.67 to $39.33.

The Toronto financial sector also got a boost from the news, ending the day up 2.6 per cent after Royal Bank (TSX:RY) reported a 15 per cent decline in quarterly profit to $1.12 billion, as revenue sagged 10 per cent to $5.07 billion. Its shares moved down 77 cents to $36.40.
Laurentian Bank's (TSX:LB) fourth-quarter profit edged down to $27.3 million from $30.2 million a year ago. Its shares were down $2.63 to $32.90.
Canadian insurers also enjoyed a bounce with Manulife Financial (TSX:MFC) up $1.33 to $20.80 and Sun Life Financial (TSX:SLF) ahead $1.84 to $26.20.

BCE Inc. (TSX:BCE) was down 10 cents to $22.85 after the telecom company denied rumours that the investment group led by the Ontario Teachers' Pension Plan is proposing to take a minority holding. BCE stock had risen four per cent Thursday on the speculation.

The base metals sector moved down 1.9 per cent as March copper prices moved down 9.6 cents to US$1.3735 a pound. Teck Cominco Ltd. (TSX:TCK.B) lost 12 cents to $3.93 and Sherritt International (TSX:S) moved down 15 cents to $2.92.

The gold sector faded 0.4 per cent as the February bullion contract declined $13.30 to US$752.20 an ounce. Goldcorp Inc. (TSX:G) was $1 lower to $27.85.

The tech sector turned supportive as Research In Motion Ltd. (TSX:RIM) advanced $2.46 to $50.36.

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Friday, December 5, 2008

Roger Biduk - Lower Day on Bay Street

Roger Biduk writes:

Blue chips in Toronto traded lower Friday afternoon -- after data showed a massive drop in employment in the United States and Canada last month while Royal Bank reported a 15 percent decline in profit.

The S&P/TSX composite index was down 167.55 points to 7,890.27.

Canada's largest bank reported a 15 percent decline in quarterly profit. The Royal Bank of Canada earned $1.12 billion in the fourth quarter of the banking year, down from $1.32 billion a year earlier. Revenue sagged 10 percent to $5.07 billion.

Laurentian Bank (LB.TO) reported Friday a fourth-quarter profit of $27.3 million, down slightly from a year-ago $30.2 million and said its full-year earnings came in at a record $102.5 million. The Montreal-based bank said its earnings for the quarter ended Oct. 31 amounted to $1.02 per share, versus $1.14 per share in the year-ago period.

West 49 Inc. (WWX.TO) scored a profit or $2.1 million in the back-to-school quarter, down from $2.6 million a year earlier. But the action-sports retailer said Friday its sales grew to $61.7 million in its third quarter ended Oct. 25, up 4.4 percent from a year earlier, as same-store sales advanced 2.1 percent.

On the data front -- Statistics Canada reported the economy shed 70,600 jobs last month, against the 20,000 expectation, and the unemployment rate rose to 6.3 percent from 6.2 percent. The job losses included 66,000 in Ontario.

Down south -- The Labor Department said U.S. nonfarm payrolls plunged by an astonishing 533,000 last month, the worst such tally in 34 years, with the unemployment rate climbing to 6.7 percent, the highest since October 1993.

Also -- a record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97 percent, the Mortgage Bankers Association said Friday. That's a 76 percent increase from a year ago, according to the group's National Delinquency Survey.

The Canadian dollar, meanwhile, was trading 1.24 cents lower at 77.18 cents US.

Two of the TSX sub-groups traded higher this afternoon -- tech stocks were up 1.04 percent and consumer staples stocks gained 0.21 percent.

On the downside -- gold stocks fell 5.46 percent. COMEX gold for February delivery lost $14.50 to $751 US an ounce.

Oil was shedding 90 cents to $42.77 US a barrel. Energy issues shed 4.84 percent and mining stocks dipped 3.67 percent.

Meanwhile, the TSX Venture Exchange shed 17.17 points to 680.69 and the NASDAQ Canada was off 0.52 points at 378.41.

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Thursday, December 4, 2008

Roger Biduk - Commodities Hammer Bay Street

Roger Biduk writes:

The Toronto stock market shed more than 200 points Thursday as commodity stocks were hammered by lower metal and oil prices.
The S&P/TSX composite index surrendered 239.14 points to finish the session at 8,057.82.
The TSX Venture Exchange was down 14.22 points to 697.86 .

Analysts downplayed the impact of the power struggle in Ottawa on the financial markets.

The CDN$ closed down 1.54 cents to 78.24 cents U.S., after the governor general agreed to Prime Minister Stephen Harper's request to shut down Parliament until he can present a budget next month.

BCE Inc. (TSX:BCE) was a rare bright spot, up $1.05 to $22.95 after Bloomberg reported that private equity firms are proposing to buy a minority stake in the telecom, rather than all of it.
The report comes a week before a Dec. 11 deadline to complete a deal with a group led by the Ontario Teachers Pension Plan that appears all but officially dead.

Crude oil tumbled $3.12 to US$43.67 a barrel on the New York Mercantile Exchange - its lowest close since January 2005 on demand worries
The TSX energy sector fell seven per cent. EnCana Corp. (TSX:ECA) fell $3.06 to $49.82 and Canadian Natural Resources (TSX:CNQ) faltered $6.37 to $41.

Base metals stocks gave back ground as copper sagged 8.5 cents to US$1.4695 a pound.
The base metals sector tumbled 7.25 per cent with Teck Cominco Ltd. (TSX:TCK.B) down 30 cents to $4.05.

The TSX financial sector closed down after TD Bank (TSX:TD), CIBC (TSX:CM) and National Bank (TSX:NA) reported earnings. The banks were hit by credit losses and provisions, but maintained their healthy dividends.
Among the banks, TD closed down 58 cents to $41.92 after its fourth-quarter net income came in at $1.01 billion, off from $1.09 billion a year ago.
Canadian Imperial Bank of Commerce (TSX:CM) earned $436 million, down from $884 million, but its shares gained 88 cents to $46.18. National Bank shares slipped $2.27 to $35.55 after fourth-quarter earnings of $70 million, up from a year-ago loss of $175 million.
Royal Bank (TSX:RY), which reports Friday, declined $1.08 to $37.17.

Also reporting was Bombardier Inc. (TSX:BBD.B) with a summer-quarter profit of US$245 million, up from $91 million a year ago. The global plane and train maker's revenue ran up eight per cent to $4.57 billion. Its shares rose three cents to $3.92.
Among shares trading higher on the Toronto market, George Weston Ltd. (TSX:WN) rose $2.51 to $59, as subsidiary Loblaw (TSX:L) ran ahead $1.50 to $33.50. The TSX consumer staples group overall gained per cent.
Paper producer AbitibiBowater Inc. (TSX:ABH) declined three cents to 60 cents after announcing it is cutting 1,100 jobs as it closes its newsprint mill in Grand Falls, N.L., and a plant in Tennessee.

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Roger Biduk - Bay Street Higher in Late Morning

Roger Biduk writes:

The Toronto stock market maintained a solid advance late Thursday morning in a broad-based upturn led by the financial sector as investors took in earnings reports from three of the big Canadian banks.
Toronto's S&P/TSX composite index moved up 71.62 points to 8,368.58 with the energy sector the only big decliner.
The TSX Venture Exchange was down 6.16 to 705.92.

The Canadian dollar was off 0.74 cent to 79.04 cents US as Prime Minister Stephen Harper strives to retain power for his Conservative minority against a Liberal-NDP coalition.

The TSX financial sector was up two per cent as TD Bank (TSX: TD.TO), CIBC (TSX: CM.TO) and National Bank (TSX: NA.TO) reported earnings. The banks were hit by credit losses and provisions, but maintained their healthy dividends.

Also reporting was Bombardier Inc. (TSX: BBD-B.TO) with a summer-quarter profit of US$245 million, up from $91 million a year ago. The global plane and train maker's revenue ran up eight per cent to $4.57 billion. Its shares rose 14 cents to $4.03.

Among the banks, TD shares rose 81 cents to $43.31 after its fourth-quarter net income came in at $1.01 billion, off from $1.09 billion a year ago.

Canadian Imperial Bank of Commerce (TSX: CM.TO) earned $436 million, down from $884 million, but its shares gained $2.12 to $47.42.

National Bank advanced 73 cents to $38.55 after fourth-quarter earnings of $70 million, up from a year-ago loss of $175 million.

Royal Bank (TSX: RY.TO), which reports Friday, gained $1.56 to $39.81.

TSX telecom stocks were also a major support as Telus Corp. (TSX: T.TO) gained 68 cents to $37.06 while Rogers Communications (TSX: RCI-B.TO) improved $1.07 to $35.21.

Roger Biduk writes:
The TSX energy sector was down 1.25 per cent as the January crude contract in New York lost $1.13 to US$45.66 a barrel after earlier falling as low as US$45.30, a level last seen in early 2005 as traders see demand shrinking because of worsening economic conditions.

"You could see prices testing $40 by the end of the year because the economic data is really ugly at the moment," commented Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore.

"Demand destruction is still very much the concern."

Suncor Inc. (TSX: SU.TO) gave back 45 cents to $22.82 and Canadian Natural Resources (TSX: CNQ.TO) faltered $1.22 46.15.

Investors also took in news from companies trying to cope with worsening economic conditions.

AT&T Inc. joined the recession's cavalcade of layoffs by announcing it will cut 12,000 people, four per cent of its workforce. Chemical maker DuPont says it will cut 2,500 jobs, and Credit Suisse Group is eliminating 5,300 - 11 per cent of its global total.

Meanwhile, leading mobile phone maker Nokia Corp. downgraded its fourth-quarter outlook for the second time.

In Canada, shares in paper producer AbitibiBowater Inc. (TSX: ABH.TO) were unchanged at 63 cents after it announced it is cutting 1,100 jobs as it closes its troubled newsprint mill in Grand Falls, N.L., and a plant in Tennessee to cope with falling demand in the North American market.

Shares in baked goods company George Weston Ltd. (TSX: WN.TO) rose $1.91 to $58.40 after it said Thursday its is in talks to sell its Dunedin unit's U.S. fresh bread and baked goods business to Grupo Bimbo of Mexico.

European stock markets were narrowly mixed despite big interest-rate reductions. The European Central Bank cut its policy interest rate to 2.5 per cent from 3.25 per cent, and the Bank of England slashed its rate by a full percentage point to two per cent, the lowest since 1951.

The FTSE 100 was 0.85 per cent higher in London, while Germany's DAX gained one per cent and the French CAC-40 was flat.

Tokyo's Nikkei index closed down one per cent, while the Hang Seng in Hong Kong slipped 0.6 per cent.

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Wednesday, December 3, 2008

Roger Biduk - Small Drop for Bay Street

Roger Biduk writes:

The Toronto stock market closed slightly lower Wednesday as a burst in financial stocks helped offset lower energy and base metal stocks.
Toronto's S&P/TSX composite index lost 30.85 points to 8,296.96 but well off early lows as financial stocks improved ahead of a slew of earnings coming out Thursday and Friday.
The TSX Venture Exchange moved down 19.02 points to 712.08.
Another source of strength was Research In Motion Ltd. (TSX:RIM) - its stock closed higher despite some the BlackBerry maker's announcement that its third-quarter profit will be lower than previously estimated. Following a negative start, RIM shares were up $2.44 to $48.90 even as it said it sold fewer BlackBerrys than expected and its earnings would miss its financial guidance.
Meanwhile, RIM on Wednesday announced a $66-million takeover bid for data encryption specialist Certicom Corp. (TSX:CIC). Certicom shares nearly doubled, gaining 74 cents to close at $1.59.

The CDN$ was down 0.16 cent to 79.78 cents U.S. amid ongoing economic gloom and political wrangling in Ottawa.

The TSX energy sector fell 1.63 per cent as data showed stronger demand for oil in the United States. Crude inventories for last week increased by 456,000 barrels, compared to the expected increase of one million. Gasoline inventories fell 1.5 million barrels.
The price of oil declined 17 cents to US$46.79 a barrel on the New York Mercantile Exchange.
EnCana Corp. (TSX:ECA) declined $1.06 to $52.88 and PetroCanada (TSX:PCA) was down 36 cents to $26.95. Nexen Inc. lost $2.23 or 9.35 per cent to $21.65, on a cooling of takeover speculation that had driven the stock up nine per cent Tuesday.

Roger Biduk writes:
The TSX financial sector was up 1.62 per cent as investors wait for earnings reports from TD Bank (TSX:TD), CIBC (TSX:CM) and National Bank (TSX:NA) Thursday and from Royal Bank (TSX:RY) Friday. Scotiabank (TSX:BNS) reported Tuesday that its fourth-quarter profit fell 67 per cent to $315 million. TD Bank gained $1.38 to $42.50 but National Bank (TSX:NA) gave back 57 cents to $37.82.

The base metals sector retreated 5.77 per cent after American mining giant Freeport-McMoRan Copper & Gold Inc. said Wednesday it would suspend operations and lay off the bulk of its workers at a New Mexico mine, cut production estimates through 2010 and curb other costs as it struggles to cope with plummeting copper prices.
Copper prices have fallen from about $3.61 per pound at the end of September to an average of $1.69 last month. On Wednesday, copper dropped 2.9 per cent to US$1.5545 a pound.
Teck Cominco Ltd. (TSX:TCK.B) ran down 43 cents nine per cent to $4.35 while Inmet Mining (TSX:IMN) gave back $1.54 or 10 per cent to $13.71.

The gold sector was off 3.75 per cent as February bullion contract in New York moved down $12.80 to US$770.50 an ounce. Goldcorp (TSX:G) faded $1.82 to $29.28.

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Roger Biduk - Bay Street Lower at Midday

Roger Biduk writes:

The Toronto stock market was lower but well off early levels as financial stocks moved into positive territory and investors sent Research In Motion Ltd. (TSX: RIM.TO) stock higher despite some glum news from the BlackBerry maker.
Toronto's S&P/TSX composite index fell 43.2 points to 8,284.6 after losing 78 points Tuesday.
The TSX Venture Exchange moved down 7.24 points to 723.86.

Following a negative start, RIM shares were up $1.97 to $48.43 even as it said after the market close Tuesday that it sold 300,000 fewer BlackBerrys than expected in the just-completed quarter, at 2.6 million.
It expects to report adjusted earnings of 81 to 83 cents per share for its third quarter ended Nov. 29, on revenue of US$2.75 billion to $2.78 billion. Analysts were expecting 90 cents per share on revenue of US$2.93 billion.
Meanwhile, RIM on Wednesday announced a $66-million takeover bid for data encryption specialist Certicom Corp. (TSX: CIC.TO. Certicom shares leaped 76 per cent, gaining 65 cents to $1.50indicating the market is set to accept the RIM offer.

The Canadian dollar was down 0.52 cent to 79.32 cents US amid ongoing economic gloom and political wrangling in Ottawa.

Crude inventories for last week increased by 456,000 barrels, compared to the expected increase of one million. Gasoline inventories fell 1.5 million barrels.
However, the TSX energy sector was down 2.25 per cent as the price of oil gained 48 cents to US$47.44 a barrel on the New York Mercantile Exchange. The dip followed Tuesday's slide of $2.32 in the near-month crude contract to the lowest level since May 2005.
Suncor Energy (TSX: SU.TO) advanced 48 cents to $23.61. Nexen Inc. was down $4.63 or 19 per cent to $19.25, on a cooling of takeover speculation that had driven the stock up nine per cent Tuesday.

The TSX financial sector was up one per cent as investors wait for earnings reports from TD Bank (TSX: TD.TO), CIBC (TSX: CM.TO) and National Bank (TSX: NA.TO) Thursday and from Royal Bank (TSX: RY.TO) Friday. Scotiabank (TSX: BNS.TO) reported Tuesday that its fourth-quarter profit fell 67 per cent to $315 million. Royal Bank was up 50 cents to $38.40.

The February bullion contract in New York moved down $$1.40 to US$781.90 an ounce.

Overseas, the FTSE 100 stock index added 0.15 per cent in London, while Germany's DAX gave back 0.8 per cent and Paris CAC 40 moved ahead 0.9 per cent.
Tokyo's Nikkei index closed with a gain of 1.8 per cent, and Hong Kong's Hang Seng advanced 1.4 per cent.

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Tuesday, December 2, 2008

Roger Biduk - Bay Street Lower on Financials

Roger Biduk writes:

The Toronto stock market closed lower Tuesday as rising energy and gold stocks failed to compensate for a slide in bank stocks a day after one of the worst declines on record.
The S&P/TSX composite index closed down 78.4 points to 8,327.81 - after plunging 9.3 per cent Monday.
The TSX Venture Exchange headed down 8.02 points to 731.1.

The Canadian dollar was off 0.37 cent to 79.84 cents U.S., as the Liberals and NDP say they're ready to govern in a coalition with Bloc Quebecois support and the minority Conservatives look for a way to retain power.
However, analysts note that the political uncertainty is likely not to blame for the weak performance on the TSX.

TSX financials fell four per cent with Bank of Nova Scotia (TSX:BNS) down $2.47 or seven per cent to $32.38 after the bank said its fourth-quarter profits fell 67 per cent to $315 million.
Manulife Financial Corp. (TSX:MFC) also announced it is issuing $2.125 billion in new common shares, and expects to report a $1.5-billion fourth-quarter loss because of annuity provisions. Its shares traded down 57 cents to $19.89

The TSX energy sector, pounded by a 13 per cent slide Monday, was 1.65 per cent higher. The January crude contract moved $2.32 lower to US$46.96, added to a slide of over US$5 Monday after OPEC failed to agree on a production cut last weekend.
EnCana Corp. (TSX:ECA) rose $1.62 to $53.94 while Suncor Energy Corp. (TSX:SU) was down 77 cents to $23.13 on the TSX.
However, Nexen Inc. (TSX:NXY) soared $2.03 or 9.3 per cent to $23.88 after going as high as $29.10 - its biggest one day jump in 21 years - after The Financial Times Alphaville website, citing unnamed sources, said French energy major Total SA is poised to make a bid for the Calgary-based international oil and gas firm. The report, largely paralleling previous speculation, said Total's board is meeting to discuss an offer worth up to $19.7 billion, or $38 per share.
Shares in Opti Canada (TSX:OPC), Nexen's partner in the Long Lake steam-assisted gravity drainage project in the Athabasca oilsands, were up 54 cents or 27 per cent at $2.54.

The gold sector was the biggest percentage advancer, up 7.4 per cent as bullion in New York gained $6.50 to US$788.30 an ounce. Barrick Gold Corp. (TSX:ABX) moved ahead $1.99 to $34.64.

Shares of BlackBerry maker Research In Motion (TSX:RIM) slid below their lowest level in more than a year on Tuesday, down $3.75 to $46.46, going as low as $44.60 - after J.P. Morgan analyst Paul Coster warned that sales of the smartphone with businesses and consumers will be slower due to the economic downturn.
Sierra Wireless Inc. (TSX:SW) is bidding 218 million euros - C$345 million - for Wavecom S.A., a French provider of machine-to-machine wireless technology. Sierra shares fell $2.64 or 27.27 per cent to $7.04.

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Roger Biduk - Bay Street flat at Midday

Roger Biduk writes:

The Toronto stock market struggled to find traction a day after one of its worst declines on record.

Toronto's S&P/TSX composite index lost tentative early gains and was down 11 points to 8,395.2 - after plunging 864 points or 9.3 per cent Monday. That was the Toronto market's worst one-day drop since the October 1987 crash, erasing more than half of last week's 14 per cent gain.

The Canadian dollar was ahead 0.04 cent to 80.35 cents US, against a background of political tumult in Ottawa, where the Liberals and NDP say they're ready to govern in a coalition with Bloc Quebecois support, while the minority Conservatives look for a way to retain power.

The TSX Venture Exchange headed up 1.59 points to 740.71.

Canadian investors are marking the passing of Ted Rogers, creator of the country's largest cable-TV and cellphone operator with other interests ranging from Citytv to Maclean's magazine to the Toronto Blue Jays. The founder of Rogers Communications Inc. (TSX: RCI-B.TO) died at home at age 75, leaving open the question of succession, though his family controls the company through multiple-voting shares. Rogers shares were off 31 cents to $34.21.

Investors are looking to Washington where top executives of the Detroit Three automakers are set to submit to Congress their plans for revving the companies up with government money. General Motors, Ford and are hoping for a US$25-billion taxpayer top-up, while they report November sales figures that are expected to be grim.

GM shares rose 33 cents to US$4.92 while Ford added 30 cents to US$2.85.

The TSX energy sector, pounded by a 13 per cent slide Monday as crude oil tumbled US$5.15 a barrel, was up 1.6 per cent Tuesday morning. The January crude contract edged up 30 cents to US$49.58 a barrel after going as low as $47.36 overnight. EnCana Corp. (TSX: ECA.TO) was up $1.76 to C$54.08 on the TSX.

The gold sector was up by more than five per cent as bullion in New York gained $5.06to US$781.86 an ounce. Barrick Gold Corp. (TSX: ABX.TO) moved ahead $1.47 to $34.12.

Financials were down 1.8 per cent as Manulife Financial Corp. (TSX: MFC.TO) announced it is issuing $2.125 billion in new common shares, and expects to report a $1.5-billion fourth-quarter loss because of annuity provisions. The new stock is priced at $19.40 per share, and Manulife traded down $1.05 to $19.41with a 52-week range between $42.14 and $16.28.

Bank of Nova Scotia (TSX: BNS.TO) was down 58 cents to $34.27 ahead of its quarterly earnings report later in the session.

Techs were also a major drag with Research In Motion Ltd. (TSX: RIM.TO) down $4.14 to $46.07.
Sierra Wireless Inc. (TSX: SW.TO) is bidding 218 million euros - C$345 million - for Wavecom S.A., a French provider of machine-to-machine wireless technology. Sierra shares fell 87 cents to $8.81.

Asian markets carried through on Wall Street's slide, with Tokyo's Nikkei index closing down 6.4 per cent and the Hong Kong Hang Seng losing five per cent.

London's FTSE 100 index inched 0.36 per cent lower, while the German DAX is up 0.8 per cent and the French CAC-40 advanced 1.3 per cent.

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Roger Biduk - Energy & Financials Sink Bay Street

Roger Biduk writes:

A broad selloff on the Toronto stock market led by the energy and financial sectors on Monday sent the index to its worst one-day percentage loss since the crash of October 1987.
The S&P/TSX composite index plunged 864.41 points or 9.3 per cent to 8,406.21 after gaining just over 1,100 points last week. The 1987 fall erased 11.3 per cent from the Toronto market.
The TSX Venture Exchange declined 27.23 points to 739.12.

The prospect that the Conservative minority government could be ousted likely had some impact on the selloff.
But analysts noted investors have plenty of other worries, including definitive word the U.S. economy is contracting and a shaky start to the holiday shopping season.

The CDN$ closed down 0.53 cent to 80.31 cents U.S. as oil prices also retreated.
Statistics Canada, meanwhile, said the Canadian economy expanded 0.1 per cent in September, which most economists believe was Canada's last month of growth before what could be a prolonged decline. The third quarter of the year showed 0.3 per cent growth in gross domestic product.

The energy sector was a major TSX loser, down 13 per cent as the January crude oil contract fell $5.15 to US$49.28 a barrel on the New York Mercantile Exchange after OPEC did not cut production at a weekend meeting in Cairo. OPEC meets again Dec. 17.
EnCana Corp. (TSX:ECA) fell $7.68 or 12.8 per cent to $52.32 while Petro-Canada (TSX:PCA) surrendered $5.58 or 16.5 per cent to $28.15.

Financial stocks were down 8.75 per cent ahead of earnings reports from four of the six big banks later this week. Royal Bank fell $3.74 to $39.44 while TD lost $3.75 to $42.25.

The gold index pulled back 13.9 per cent as bullion fell $42.20 to US$776.80 an ounce on the Nymex. Barrick Gold Corp. (TSX:ABX) was down $5.07 to $32.65 while Goldcorp (TSX:G) faded $5.85 to $29.15.

Base metals sagged 12 per cent with Teck Cominco (TSX:TCK.B) off $1.04 to $4.96 while HudBay Minerals (TSX:HBM) declined 51 cents to $3.42.

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Monday, December 1, 2008

Roger Biduk - Bay Street Lower at Midday

The Toronto stock market was down more than 600 points late in the morning, its slide led by big losses in energy and financial stocks - the two most powerful sectors - erasing almost half of its 14 per cent gain last week.
The S&P/TSX composite index fell 640.7 points to 8,629.9.
The TSX Venture Exchange declined 19.46 points to 746.89.

Political turmoil in Ottawa and the prospects that the federal Conservative minority government could be ousted likely had some impact on the selloff, but analysts noted investors have plenty of other worries right now - including a disappointing start to the U.S. holiday season that has deepened worries about the American economy.
In Ottawa, sources said the Liberals and NDP have drafted a plan for Canada's first coalition federal government since the First World War, aiming to govern jointly until the middle of 2011. But they would need support from the Bloc Quebecois. Meanwhile, the Conservative minority government on Sunday moved the budget date ahead to Jan. 27.
The political uncertainty and another tumble in oil prices sent the Canadian dollar down 0.12 cent to 80.72 cents US.

Canadian economic data painted a bright picture of stronger economic growth.
Statistics Canada said the economy expanded 0.1 per cent in September, which most economists believe was the last month of growth before what could be a prolonged decline. The third quarter of the year showed 0.3 per cent growth in gross domestic product.

The energy sector was a major loser in early TSX action, down more than 10 per cent as the January crude oil contract fell $3.87 to US$50.56 a barrel on the New York Mercantile Exchange after OPEC did not cut production at a weekend meeting in Cairo. OPEC meets again Dec. 17.
EnCana Corp. (TSX: ECA.TO) fell $6.37 to $53.63 while Petro-Canada (TSX: PCA.TO) surrendered $4.42 to $29.32.

Roger Biduk writes;
Financial stocks were down seven per cent ahead of earnings reports from four of the six big banks later this week. Royal Bank fell $3.30 to $39.91 while TD lost $2.71 to $43.29

The gold index pulled back 10 per cent as bullion fell $44.20 to US$772 an ounce on the Nymex. Barrick Gold Corp. (TSX: ABX.TO) was down $3.55 to $34.17.
Base metals gave back almost 11 per cent with Teck Cominco Corp. (TSX: TCK-B.TO) off 78 cents to $5.22.

Overseas markets were also down sharply on deepening worries about economic conditions.
London's FTSE 100 index fell five per cent, while Frankfurt's DAX retreated 6.1 per cent and the Paris CAC 40 slid 5.1 per cent as specialist financial services company London Scottish Bank announced that it has gone into administration.
Asian markets closed lower with the Nikkei 225 stock average in Tokyo down 115.05 points, or 1.4 per cent, at 8,397.22 after advancing 7.6 per cent last week.
Markets in South Korea, Australia and Singapore also fell, while India's benchmark Sensex index reversed early gains and closed with a loss of 2.8 per cent at 8,839.87 in the wake of the Mumbai terrorist attacks.

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