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By Amran Abocar
Reuters
Wednesday, February 4, 2004
TORONTO, Feb 4, 2004 (Reuters) - Toronto stocks closed more than 1 percent lower on Wednesday in a broad-based decline led by profit-taking in technology stocks after a disappointing outlook from U.S. tech bellwether Cisco Systems.
Adrian Mastracci, investment counsel and president of Vancouver based ‘fee-only’ KCM Wealth Management, says, “I do think that investors perhaps have forgotten the lesson they should have learned in 2000, 2001.”
The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) finished 122.58 points, or 1.42 percent, lower at 8,538.12. Volume was 299 million shares worth C$3.99 billion.
Tech stocks plunged after Cisco Systems Inc.'s (CSCO.O) chief executive made cautious remarks about the outlook for technology spending.
That was enough to prompt some market players to take cash off the table, especially after the Toronto tech sector's 34 percent runup this year.
"I think that whole sector has somewhat gotten ahead of itself," said Adrian Mastracci, president of KCM Wealth Management Inc. "I do think that investors perhaps have forgotten the lesson they should have learned in 2000, 2001."
But despite the session's decline, Mastracci said the market still retained its positive trend and should see more gains in days ahead.
Despite mostly decent corporate results so far, investors -- armed with lofty expectations for company profits after the market's months-long rally and signs of economic recovery -- have proved unwilling to countenance any disappointments.
"The other notion is that the market has already pretty much paid for these (good) numbers and we have to see what we're going to get from here on forward," Rick Hutcheon, president of RHK Investments, said of market sentiment.
Overall, nine of the TSX's 10 subgroups ended lower, led by a 3.18 percent slide in techs, while the energy, industrials, telecoms, health-care and materials groups all endured more than 1 percent declines.
Nortel Networks Corp. (NT.TO) fell 60 Canadian cents, or 5.66 percent, to C$10.00 while Sierra Wireless (SW.TO) lost C$1.91, or 5.3 percent, at C$34.11.
The energy group shed 1.88 percent partly on a drop in oil prices, which fell after the U.S. government reported a large rise in crude supplies in the world's biggest energy consumer.
News that Nexen Inc. (NXY.TO) lowered its proved reserves by 8 percent also weighed on the sector and the fourth-largest oil explorer and producer led the sector lower. The move has fanned investor worries that other energy companies may follow suit with cuts to the most commercially certain oil and gas inventories.
Nexen shares were off C$2.26, or 4.38 percent, at C$49.35, while Canadian Natural Resources Ltd. (CNQ.TO) was down C$2.66, or 3.89 percent, at C$65.75, and EnCana Corp. (ECA.TO) lost C$1.35, or 2.49 percent, to C$52.83.
The consumer staples sector was alone in positive territory.
Overall market momentum was negative with 809 issues declining and 480 advancing.
The blue-chip S&P/TSX 60 index (.TSE60) fell 7.31 points, or 1.51 percent, at 477.65.
In New York, the Dow Jones industrial average (.DJI) closed off 34.44 points, or 0.33 percent, at 10,470.74 while the tech-laden Nasdaq composite index (.IXIC) fell 52.07 points, or 2.52 percent, to 2,014.14.
($1=$1.33 Canadian)
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