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By Gregory Thomas
Special to The Vancouver Sun
Tuesday, December 12, 2006
Canadian markets moved slightly lower for a second day as oil prices softened and traders took profits in financial stocks ahead of today's interest rate decision from the U.S. Federal Reserve.
Adrian Mastracci, fee-only portfolio manager at KCM Wealth Management in Vancouver, says, "We are facing a bit of a cooling economy. It's not going to be as robust as it was six or 12 months ago."
Twenty of 26 names in the S&P/TSX financial group ended the day lower.
Brookfield Properties dropped $1.35, or three per cent, to $44.60, announcing plans to raise $825 million US by issuing 30 million new shares. The stock has gained 30 per cent this year and seven per cent in the past month. Sun Life Financial fell $1.06, or two per cent, to $50.23. CIBC, up 26 per cent this year, gave back 63 cents, or 0.7 per cent, to $96.25.
"Nobody ever went bankrupt taking a few profits," said fee-only portfolio manager Adrian Mastracci of Vancouver-based KCM Wealth Management. "A lot of people would have a higher weighting of equities than they're probably comfortable with right now.
"We are facing a bit of a cooling economy. It's not going to be as robust as it was six or 12 months ago. The bull run is getting a little long in the tooth. Could we expect a correction? Sure, it's entirely possible."
The S&P/TSX Composite Index fell 21.40 points, or 0.2 per cent to 12,878.18, The S&P/TSX Venture composite lost 14.65, or 0.5 per cent, to 2,805.52.
On Wall Street, airline merger talk kept the rally alive. The Amex Airline Index climbed 1.9 per cent on speculation of consolidation in the industry. Delta and Northwest Airlines, currently in bankruptcy protection, led the gainers, along with Continental, No.-4 U.S. carrier.
The Dow Jones Industrial average advanced 20.99 points, or 0.2 per cent, to 12,328.48. The S&P 500 rose 3.20, or 0.2 per cent, to 1,413.04. The Nasdaq composite added 5.50 points, or 0.2 per cent, to 2,442.86.
Energy prices dropped to their lowest levels in six weeks on forecasts of warm weather across the United States through the Christmas season. In New York, January crude slid 81 cents, or 1.3 per cent, to $61.22 US a barrel. January natural gas fell 13.4 cents, or 1.8 per cent, to $7.427 US per million Btu.
In New York, February gold added $3.80, or 0.6 per cent, to $634.80 US an ounce. The Canadian dollar climbed 0.05 cents Monday to 87.10 cents US in quiet trading ahead of today's U.S. interest rate announcement.
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