Golds still shine in generally weak market

The TSE 300 is down about 25
points at midday. Volume has been
incredible, with the exchange
trading more than 107 million
shares before noon ET, packing an
average day’s trading into a mere
half day of action. Decliners are
outweighing advancers about 5:4 so
far, but the phenomenal volume is
strongly in favour of buyers,
almost 4:1.

Once again the volume is
concentrated around the hot, hot,
hot gold stocks. Gold continued its
rapid price gains in New York this
morning, and the stocks were hit
with another round of wholesale
upgrades from Wall Street, notably
Merrill Lynch, which raised
its ratings on a number of major
gold miners. Gold has busted the
US$300 barrier, up another US$21,
above US$305.

Some of the cheaper stocks, such
as Vengold and Dayton Mining,
are doing huge volume of more than
8 million shares apiece, and have
climbed more than 70% and 15%,
respectively. And some of the
senior producers – Placer,
Barrick and Kinross –
are also heavy to the upside
again.

Apart from the golds, there are
few spots of strength. Blue chip
tech firms such as Nortel and
BCE are doing well, pulling
up the utilities.

On the other side of the market
the oil and gas, consumer products,
media, and paper stocks are all
down strongly at midday, a reversal
of yesterday’s euphoric gains.
Biotechs are the leading group on
the downside, off about 3%, led by
Biovail, which is down almost
5%, and QLT Phototherapeutics.
Seagram is leading the media
stocks down, Fairfax is the
top loser among the financials,
while Bowater is giving up
yesterday’s gains, leading the
paper stocks lower. The energy
stocks are charging down behind
Suncor, which is off almost
4%.

In Montreal, the same broader
weakness has left the index down
about 15 points, though the small
caps are resisting the slide.
Alberta is up more than five
points, while Vancouver has added
about three.

In New York the story is much
the same, although the golds have
much less positive impact. The Dow
is off about 105 points, Nasdaq
has dropped 40 points, and the
S&P is off 13.