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By Franco Pingue
Reuters
Tuesday, January 21, 2003
TORONTO, Jan 21 (Reuters)
- Toronto stocks fell to their lowest close of the year
on Tuesday after a financial report from aluminum producer
Alcan Inc. AL.TO missed most analysts' estimates and
stoked fears of more weak earnings to come.
The Toronto Stock Exchange S&P/TSX composite index
.GSPTSE closed down 49.56 points, or 0.74 percent, at
6,690.81.
"Investors need to see a consistent level of earnings,"
said Adrian Mastracci, investment
counsel and president of KCM Wealth
Management Inc. "One quarter probably isn't
going to be the catalyst that gets everybody going."
Hopes that earnings are poised for a rebound spurred
an early January rally, but worries over the threat
of a U.S.-led war in Iraq have tempered the gain.
Toronto's key index jumped 3.6 percent in the year's
first three sessions as investors got excited ahead
of release of corporate earnings that are being compared
to the depressed levels of the year before. The S&P/TSX
composite index is now up 1 percent in 2003.
Before the markets opened, Alcan said fourth-quarter
earnings rose on better metal prices and higher shipments,
and that it expected profits to rise this year. But
the financial report fell short of most analysts' expectations.
Adrian Mastracci,
president of Vancouver based ‘fee-only’
KCM Wealth Management, says, “Investors need to
see a consistent level of earnings. One quarter probably
isn't going to be the catalyst that gets everybody going.”
Shares of Alcan closed down C$1.85, or nearly 4 percent,
at C$45.90.
The heavily weighted financial index slipped 1 percent
and the utilities group shed 0.6 percent as all 10 of
the TSX's subindexes closed lower.
Shares of Royal Bank of Canada RY.TO closed down 69
Canadian cents, or 1.2 percent, at C$56.91, while Toronto-Dominion
Bank TD.TO fell 37 Canadian cents, or 1 percent, to
C$33.93.
The Bank of Canada's decision to keep its overnight
interest rate at 2.75 percent due to geopolitical and
economic uncertainties was widely expected and it played
no role in the market's direction.
Market momentum was negative as declining issues outpaced
advancers 577 to 520. Volume was healthy with 237 million
shares worth C$3.3 billion changing hands.
The blue-chip S&P/TSX 60 index .TSE60 closed down
4.04 points, or 1.06 percent, at 378.26.
The build-up of U.S. troops against Iraq, and worries
about the corporate outlook at the height of the U.S.
earnings reporting season, sent jittery investors to
the exits and U.S. markets lower.
The Dow Jones industrial average .DJI fell 143.84 points,
or 1.68 percent, to 8,442.90, while the tech-filled
Nasdaq composite index .IXIC shed 11.94 points, or 0.87
percent, to 1,364.25.
The choppy pattern among equity indexes early in the
year has some experts fearing the markets could follow
the same course as last year -- a volatile market that
is strong in the first half and weak in the second.
"Until we get visible earnings, and sustainability
of those earnings, the market is not going to pay,"
said Irwin Michael, portfolio manager.
"People are extremely quiet and investors are
quiet, they are just not sure what to do given the uncertainty."
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