It will likely be another sluggish stock trading session Monday with many U.S. traders taking the week off while the Republican National Convention in New York, but Canadian investors can take heart from a growing economy.

The Canadian economy picked up steam in the second quarter as real gross domestic product rose a solid 1.1%, boosted by a surge in exports that spurred manufacturing, wholesaling, and rail and truck transportation.

After a slow start in April, the economy picked up steam in May and June, up 0.3% in both months, Statistics Canada reported today.

Overall, the Canadian economy grew at an annualized 4.3% in the second quarter of 2004, StatsCan said. That compares with an annualized 2.8% for the U.S. economy.

Exports of goods and services advanced 5% in the second quarter, the strongest gain in over seven years.

Later today, the Conference Board is due to release its U.S. consumer-confidence index for August at 10:00 ET. With high oil prices damping the mood earlier this month, economists expect sentiment to have fallen off to a reading of 104.0 from July’s reading of 106.1. At the same time, the Chicago National Association of Purchasing Management is due to release its August manufacturing survey. Economists look for the index to slip to a reading of 60.0 from 64.7 in July.

In earnings news, both Bank of Nova Scotia and Hudson’s Bay Co. are scheduled to release quarterly results later today.

Most European shares were lower at midday Tuesday. London’s FTSE 100 index fell 0.4% at 4471.7, after the market was closed Monday for a holiday.

In Paris, the CAC 40 index was 0.5% lower at 3620.Frankfurt’s Xetra Dax index was down 0.9% at 3,806.34.

Overnight in Asia, markets closed lower. Tokyo’s Nikkei ended down 102.74 points, or 0.9%, at 11l081.79 following a 25.06-point fall Monday.

In Hong Kong, shares closed slightly lower, hurt by the declines on Wall Street and profit-taking. The benchmark Hang Seng index fell 27.50 points, or 0.2%, to 12,850.28.


Bay Street failed to hold on to early afternoon gains Monday, falling sharply before the closing bell, while Wall Street drifted lower throughout the day in listless trading.

At the close, Toronto’s S&P/TSX composite was down 25.25 points, or 0.3%, to 8,309.04, while the TSX Venture Exchange was the only market to finish the day in the black; it closed up 3.15 points, or 0.21%, to 1,524.30.

Financials stocks slipped 0.08% with Royal Bank (off 97¢ to $59.43), Bank of Nova Scotia (down 15¢ to $36.56) and CIBC (down 17¢ to $66.30) among notable losers.

The big mover on the day was Bombardier Inc., which announced that its transportation unit has been selected by the Chinese government to negotiate a rail equipment contract worth a reported $4.5 billion. Bombardier stock closed up 27¢ to $2.99 on volume of more than 8.2 million shares.

On Wall Street, trading was extremely light as many traders seem to have opted to stay away during the U.S. Republican convention in New York.

The Dow Joes industrial average lost 72.49 points, or 0.71%, to 10,122.52. The tech-heavy Nasdaq composite index slipped 25.60 points, or 1.37%, to 1,836.49 and the S&P 500 slid 8.62 points, or 0.78%, to 1,099.15.