By Derek Abma
Canwest News Service
Edmonton Journal
Saturday, May 31, 2008

Also published in:

Commodity stocks, which have been an albatross around the neck of the Toronto Stock Exchange on a few occasions this past week, redeemed themselves on Friday, leading the exchange's main benchmark to a triple-digit point gain.

Adrian Mastracci, “fee-only” portfolio manager at
KCM Wealth Management in Vancouver, says, "Investors should be careful even when the market seems so full of potential as it did Friday."

The S&P/TSX composite index was up 137.56 points, or 0.9 per cent, to 14,714.73. It peaked almost 100 points more than that late in the afternoon before moderating sharply in the last half-hour or so of trading.

The TSX Venture composite index was up 28.4 points, or 1.1 per cent, to 2,657.00.

U.S. markets on Friday were mixed. The Dow Jones industrial average was down 7.9 points, or 0.1 per cent, to 12,638.32. The Nasdaq composite index gained 14.34 points, 0.6 or per cent, to 2,522.66. The S&P 500 was up 2.12 points, or 0.2 per cent, to 1,400.38.

The surge of Canada's stock indexes came in contrast to a report on Friday that showed the economy contracted in this year's first quarter, the first shrinkage in almost five years.

Adrian Mastracci, portfolio manager for KCM Wealth Management in Vancouver, said with such economic troubles in Canada as well as the U.S., investors should be careful even when the market seems so full of potential as it did Friday.

"We are slowing overall," he said. "The commodities and the materials will save our bacon for a while, but even they can't save our bacon all the time."

Looking at some of the New York Mercantile Exchange-traded commodities that drove the TSX, crude oil was up 73 cents to $127.35 US a barrel, gold gained $9.80 to $891.50 US an ounce, and copper rose 4.75 cents to $3.06 US a pound.

Some of the top gainers by dollar volume on the TSX were the major fertilizer producers, supported by rising wheat, corn and soybean prices. Agrium Inc. was up $3.21, or 3.8 per cent, to $86.76. Potash Corp. of Saskatchewan Inc. was up $2.75, or 1.4 per cent, to $197.33. This helped make the materials index the top industry sub-index on the exchange, rising 2.4 per cent.

The metals-and-mining index was up 2.3 per cent. Teck Cominco Ltd. was up $1.76, or 3.7 per cent, to $49.17. FNX Mining Co. Inc. saw a gain of 85 cents, or 3.8 per cent, to $23.35.

Looking at the energy sector, its TSX index rose 1.4 per cent. Suncor Energy Inc. was right on pace with gain of 92 cents, or 1.4 per cent, to $67.81. Canadian Natural Resources Ltd. was up $1.99, or 2.1 per cent, to $97.24.

Aside from commodities, the financials index was up 0.5 per cent despite coming off a week in which all the major banks reported first-quarter results that trailed year-earlier periods.

"The banks' earnings weren't up to par compared with the last quarter, but they still had very good earnings," said Mastracci. "A lot of companies out ... I think they'd give their right arm to have some of those earnings, even if they dropped a little bit."

A sector that didn't do so well was technology. The TSX information-technology index was down 1.2 per cent. Research In Motion Ltd. was almost flat, rising one cent to $137.41. Celestica Inc. was down 58 cents, or 6.2 per cent, to $8.78.

The Canadian dollar was down 40 basis points to $1.007 US.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.