Canadian Issues Little Changed in Early Trading

Canadian Issues Little Changed in Early Trading Wednesday, January 19, 2005, 10:15 AM EST (Thomson Financial Corporate Group): Bay Street is hugging the flat line this morning, as investors digest a barrage of economic and financial reports. Earnings season is well under way in the U.S., but has yet to take hold of the domestic market. Already in focus are financial releases from IBM, Motorola, Lucent Technologies and J.P. Morgan Chase. Dow members Pfizer and General Motors also released results. In economic reports, data from both sides of the border suggest easing inflation. * The S&P/Toronto Stock Exchange Composite Index is edging up 0.78 points, or 0.01%. * Yesterday, the S&P/Toronto Stock Exchange Composite Index surged 70.93 points, or 0.78%. * On the economic front, the consumer price index eased to 2.1% in December from 2.4% in November, whereas analysts expected the rate to remain unchanged last month. Also, foreign investors bought C$7.20 billion of Canadian securities in November, bolstered by a surge in bond investment. Economists expected net foreign investment of C$3 billion. Meanwhile, Canadians purchased C$4.23 billion of foreign securities in November. * South of the border, the CPI fell 0.1% in December, versus a 0.2% increase the prior month. The core index rose 0.2%, compared with a 0.2% gain in November. Economists had expected both the CPI and the core index to rise 0.2%. Also, housing starts rose to a 2.004 million annual rate in December from an upwardly revised 1.807 million rate the prior month, well above predictions. Finally, initial jobless claims dropped by 48,000 to 319,000 from an unrevised 367,000. A 22,000 decline had been predicted. * In U.S. technology headlines, International Business Machines posted stronger fourth-quarter profits, as sales jumped 6.8%. Excluding items, earnings landed well ahead of the mean Thomson First Call estimate. Elsewhere, Yahoo! and Juniper Networks' fourth-quarter profits, excluding items, beat expectations. In chip news, AMD swung to a quarterly loss, after warning last week, while issuing uninspiring first-quarter flash memory and processor sales forecasts. * Turning to communications equipment, Motorola exceeded estimates for its fourth quarter, but its first-quarter guidance disappointed. In addition, Lucent Technologies' first-quarter profit matched forecasts, but its revenue figure missed the Street expectations. * In biotech reports, the U.S. Food and Drug Administration issued Inex Pharmaceuticals with a not approvable letter under its accelerated approval regulations for its anticancer drug Marqibo. Inex expected the decision, as the FDA's advisory committee voted against recommending accelerated approval for the drug in early December based on Phase II data. * South of the border, J.P. Morgan Chase's net fourth-quarter earnings fell from a year ago, due in part to merger costs, changes to conform to accounting policies and a "mixed performance" across its segments. Excluding items, earnings missed the mean Street view. * Within the industrial group, Bombardier Transportation received an order for 20 six-car MOVIA metro trains for Romania's Metrorex. The deal is valued at about US$144 million. * Gold shares and the yellow metal are gaining ground this morning, as the greenback eases against the euro. U.S. economic reports released earlier indicated easing inflationary pressures. Meanwhile, oil prices are pulling back ahead of U.S. weekly inventory data, due out at 5:00 PM EST. -- Linda.Shea@thomson.com; Thomson Financial Corporate Group -- This is Thomson Financial Corporate Group's 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/. PRNewswire -- Jan. 19 Source: Thomson Financial Corporate Group Web site: http://www.thomsonfinancial.com/ http://www.irchannel.com/ ------- Profile: International Entertainment