By James Langton
(August 29 – 13:10 ET) – Profit takers are ruling the market today, pushing the TSE 300 down 28 points to 11,196 at midday. Heavy volume of 185.4 million shares is being led by trading in Repap, but is strong nonetheless.
Advancing issues edge declines by about 12 to 11 but it’s the bigger stocks that are sliding, led by a 1% retreat in the industrials. Food stocks, publishers and transports are down too. Cable stocks, biotechs and insurers are leading the upside.
A takeover bid for papermaker Repap by Finnish forestry firm UPM-Kymmene has vaulted the stock to the top of the leader board with an incredible 90.8 million shares changing hands. The stock is up 52% – to 19¢ from 12.5¢ – a penny below the proposed takeout price. National Bank of Canada has been the big trader on the stock, with all the big brokers feasting as well.
Even without Repap’s huge volume the TSE is active. Heritage Concepts continues to attract volume, up 12% on 9 million shares. Digital Gem has dropped 16% on 5.3 million shares, while Plaintree is off 17% on 3.5 million shares.
It’s not all penny stock players on the TSE today though. Husky Energy is up 3.5% in active trading. Takeover target Rio Algom is up 15¢, and Domtar is gaining on Repap’s takeover.
Nortel Networks is still the king of the indexes, losing just over 1% on 2.6 million shares as investors take profits. They are also cashing out of important tech names such as JDS Uniphase, Celestica, Certicom, Pivotal, Mosaid and Ballard Power.
Not all the techs are weak. 724 Solutions is up 17% as it launches wireless banking and brokerage services with Bank of America. Microcell, Alcatel, Research in Motion and QLT are all up too.
BCE Emergis is up more than 2% on news of its takeover of InvoiceLink for US$88.3 million, a deal to get it into Internet-based payment and invoicing systems for the financial services industry. With 724 Solutions taking off today the timing could not have been better. However, the firm said the deal will hurt its margins and cash flow this year and next.
Bank of Nova Scotia is up 1% in very active trading, after blowing away Street estimates with its third quarter results. The bank reported record earnings thanks to its wealth management and other domestic banking divisions. Earnings came in at $548 million, or $1.05 a share, up from 75¢ last year and well ahead of analyst estimates of 85¢.
Laurentian Bank of Canada also trounced analyst estimates, reporting 78¢ a share profit for the quarter, up from 46¢ in the same period last year and ahead of calls for 74¢. Both banks raised their dividends.
In New York, the action is not nearly as hot and heavy as Toronto. The Dow Jones industrial average is down 37 points to 11216. NASDAQ is up 11 to 4081, and the S&P 500 has dropped three to 1511. Profit-taking appears to be to blame for the slide.
Financials and drugs are slumping among the blue chips, with Johnson &
Johnson leading the way down. AT&T issued a profit warning. Micron is suing rival Rambus, alleging antitrust violations in the semiconductor sector.
And there’s weakness out among the small caps. The CDNX is off six points to 3420 on volume of 17.7 million shares. Energy stocks and miners are leading the slide, but techs are up. Totem Mining is the top trade, surging 133% to 7¢ on 1.245 million shares.