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By Amran Abocar
Reuters
Monday, January 26, 2004
TORONTO, Jan 26 (Reuters) - Toronto stocks ended modestly lower on Monday, despite solid gains south of the border, as investors digested last week's gloomy economic outlook from the Bank of Canada and weighed the implications for corporate earnings.
Adrian Mastracci, investment counsel and
president of Vancouver based ‘fee-only’ KCM Wealth Management, says, “We have this ongoing drama with interest rates and the question that a lot of people are asking now is what's the Bank of Canada going to do with rates in the next couple of meetings.”
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 9.81 points, or 0.11 percent, at 8,594.92. Volume was 263.7 million shares worth C$3.37 billion.
"Let's face it, (Bank of Canada Governor David) Dodge spooked everybody last week," said Steve Gold, research analyst at Leeward Hedge Funds. "His comments are not in line with what a lot of the market had priced in over the last few months."
Last week, the central bank slashed its growth forecasts and said the rapid rise in the Canadian dollar, hovering near 10-year peaks against the greenback, was taking a toll on growth.
That sent the Canadian dollar tumbling and solidified expectations the central bank, which had cut interest rates earlier in the week, would lower them again in March.
The market was also inclined to take a pause ahead of an onslaught of corporate results this week, beginning with heavyweights Imperial Oil (IMO.TO) and Canadian Pacific Railway Ltd. (CP.TO) on Tuesday.
Analysts said the focus was still on earnings -- especially with investors' maintaining high expectations and ready to punish any firm that fails to meet lofty standards -- but that concerns about the macro-economic outlook have crept into the picture.
"We have this ongoing drama with interest rates and the question that a lot of people are asking now is what's the Bank of Canada going to do with rates in the next couple of meetings," said Adrian Mastracci, president of KCM Wealth Management in Vancouver.
Six of the TSX index's 10 groups ended lower on Monday, with a 1.12 percent decline in the materials sector, which was weighed down by weak gold-mining and base metals stocks. The energy group fell 0.31 percent, while telecoms lost 1.23 percent.
Golds slipped 1.64 percent, drooping along with bullion prices as the U.S. dollar firmed against key currencies.
Barrick Gold Corp. (ABX.TO) , Canada's biggest gold miner, fell 35 Canadian cents, or 1.32 percent, to C$26.20, while junior gold miner Iamgold Corp. (IMG.TO) sagged 23 Canadian cents, or 2.58 percent, to C$8.68.
Elsewhere in the materials group, Falconbridge Ltd. (FL.TO) dropped C$1.12, or 3.14 percent, to C$34.58.
The information technology sector jumped 2.23 percent and helped cushion the index's fall, while the heavily weighted financial group ended up 0.23 percent.
Among techs, Research In Motion (RIM.TO) popped up C$7.66, or 6.85 percent, to C$119.50, while software maker Open Text Corp. (OTC.TO) gained C$1.55, or 4.71 percent, to C$34.45.
Rounding out the gainers were the heavyweight financials group, utilities and consumer discretionary groups.
Overall market momentum was negative with 682 issues declining and 621 advancing
The blue-chip S&P/TSX 60 index (.TSE60) was off 0.69 of a point, or 0.14 percent, at 481.94.
In New York, the Dow Jones industrial average (.DJI) rose 134.22 points, or 1.27 percent, to 10,702.51, its highest close since June 21, 2001. The tech-heavy Nasdaq Composite Index (.IXIC ) was up 29.96 points, or 1.41 percent, at 2,153.83.
($1=$1.31 Canadian)
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