Toronto Stocks Maintain Positive Momentum

Toronto Stocks Maintain Positive Momentum Tuesday, January 25, 2005, 4:15 PM EST (Thomson Financial Corporate Group): Bay Street logged impressive gains, following an expected hold on rates from the Bank of Canada, which sent the loonie tumbling. Technology issues jumped, following positive RIM research. South of the border, pleasing results from Merrill Lynch, Merck, Johnson & Johnson and DuPont, and an upbeat consumer confidence reading helped bolster the key indices. Elsewhere, gold stocks witnessed the only substantial declines on the session on greenback strength. * The S&P/Toronto Stock Exchange Composite Index leapt 46.90 points, or 0.52%. * In economic headlines, the Bank of Canada left interest rates unchanged at 2.50%, as expected, and indicated the economy's fourth-quarter performance was below prior expectations. The Bank also commented, "In large part reflecting the consequences for aggregate demand of this higher exchange rate, the Bank now expects the Canadian economy to operate a little further below its full production capacity in 2005 than was anticipated in the last MPR." * South of the border, the consumer confidence index rose to 103.4 in January from an upwardly revised 102.7 in December, beating expectations. Meanwhile, existing home sales fell 3.3% to a 6.69 million annual rate in December from a 6.92 million annual rate in November. * Technology stocks recovered some of yesterday's losses. Research In Motion rallied on the session, after UBS upgraded the firm to "outperform" from "market perform," as it sees the current sell-off as overdone. The brokerage also noted that recent concerns regarding competition are unwarranted. In deal reports, Speedware Corp. leapt on word a subsidiary of U.S.-based Activant Solutions will acquire the firm for C$3.91 a share. * Healthcare issues also surged. Biovail Corp. reported that it has officially launched Tiazac XC, a treatment for high blood pressure, in Canada. Also, RBC Capital upgraded Biovail to "outperform" from "sector perform." Separately, Transition Therapeutics said the U.S. Food and Drug Administration granted approval for it to start a clinical trial for E1-I.N.T., its lead diabetes treatment. * Industrial share rallied. U.S.-based Burlington Northern Santa Fe posted strong fourth-quarter results, which helped boost the railroad industry. Also, Canadian National Railway leapt, ahead of its quarterly release, due out after the close. Separately, CAE rose, after Research Capital started the firm at "buy" with a C$6.50 price target. * Oil prices turned higher, following early morning declines. According to the Associated Press, Nigerian oil worker unions refused to relinquish a strike threat following discussions with the labour ministry. Uncertainty over OPEC's upcoming output level decision and Iraqi elections are also shadowing the market. Flowing Energy was active, after the firm said a committee of independent directors was formed to explore strategic alternatives, including selling the firm or a merger. * Elsewhere, gold prices fell sharply, as the yellow metal declined to a two-week low on the back of a stronger U.S. dollar and rising consumer confidence. Rio Narcea Gold Mines tumbled, after Haywood downgraded the firm to "sector perform" from "sector outperform" and cut its price target to C$2.50 from C$3.60. * In corporate resource reports, steel stocks benefited from positive financial reports from U.S. Steel and AK Steel. Also, the Superior Court of Justice approved Stelco's application to extend the deadline for filing binding offers for the firm's core business and/or its non-core subsidiaries to February 14 from the end of January. Separately, Stelco shareholders Clearwater Capital Management and Equilibrium Capital Management said they will work together to help maximize the value of their holdings during the restructuring of the firm. * Elsewhere in materials, JP Morgan downgraded Potash to "underweight" from "overweight," as the brokerage no longer views the stock as undervalued. * Pharmacy chain Jean Coutu Group swung to a second-quarter loss of US$0.02 a share, compared to a profit of US$0.14 a share last year. Excluding certain items, the firm would have earned US$0.06 a share. The firm's revenue surged to US$2.7 billion from US$757,633 a year ago. -- 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. 25 Source: Thomson Financial Corporate Group Web site: http://www.thomsonfinancial.com/ http://www.irchannel.com/ ------- Profile: International Entertainment