By James Langton
(May 9 – 17:30 ET) – Markets continued to slide lower today in a sluggish day of trading. Valuation and rate worries seem to be keeping traders on the sidelines. The TSE 300 closed the day down 43 points to 9294. Volume was light at 150.8 million shares, about 4:3 in favour of buyers. Decliners are edging advancers 12:11.
The highly-valued tech stocks continued to lead the way down, evidenced by weakness in the industrials. Software lost 5%, and biotechs closed down too. The utilities finished down, although its slide was less than 1%.
It was the big names leading the slide in techs. Nortel Networks dropped more than 4% on 11.6 million shares. But large, influential losses also came in stocks such as JDS Uniphase, Certicom, Sierra Wireless and 724 Solutions.
Trimark Financial finished the day up 35¢ to $24.60 in very heavy trading after its merger deal with AMEVESCAP plc was finally announced. AMEVESCAP will pay $27 per share for Trimark through assorted combinations of cash, stock and convertible debentures. The cash component of the deal is limited to $750 million of the overall $2.5 billion price tag, or $7.50 per share.
Investor nervousness took over in these high-priced stocks today after San Francisco Federal Bank President Robert Parry observed that investors appear to be anticipating a 50 basis point move on May 16. He did nothing to dissuade investors from that opinion. “It’s risky to just sit back and wait for an upward trend in inflation to show up before we do something.”
That speech helped slug the techs, but some of the old economy stocks seemed to like the apparent vigilance at the Fed and they posted gains today, although not enough to stem the tech slide. Miners led the way, up 5.5%. Energy stocks, paper, golds and financials were all strong today. Alcan led the miners, up 7.3% It was joined by strong gains in Alberta Energy, Seagram, Bombardier, Renaissance Energy, Placer Dome and the banks.
In New York trading was dull and stocks ground their way lower through the day. The Dow finished the day off 67 points to 10536 in very light trading. Nasdaq dropped 84 points to 3585. The S&P slipped 12 points to close at 1412.
The Euro was a big target of market speculation today, with assorted European politicians hinting that they may defend the currency even if the European Central Bank won’t. In the meantime, there are also rumours that the U.S. Treasury will join with the ECB in an intervention to defend the flagging currency. Nothing has been confirmed though, making for active trading.
On the small cap front, techs took another beating today too. The CDNX finished the day down 60 points to 3449 on volume of 39.4 million shares. The techs dropped 3.4%. Miners were down 1.6% and energy stocks wer flat. JNR Resources Inc. was the hottest trade, finishing up 46% to 22¢ on 3.9 million shares.