By James Langton
(June 6 – 13:00 ET) – Profit takers continue to chip away at last week’s rally, while the bulls wait for more data to convince them that rate hikes are over. Markets are seeing another lazy day, at midday the TSE 300 has shed 34 points to 9645. Volume is light again at 71.5 million shares. Decliners are edging advancers.
By sector the TSE is split evenly, with industrials and financials leading the downside. Nortel Networks is off $1.10 on 3.6 million shares. Other techs are following Nortel’s lead, as the bulls cool their heels. Ballard Power, Certicom, Alcatel and Cognos are all down.
Financial stocks are sliding, too, led by the banks, as investors decide that the interest rate picture isn’t as clear as they had hoped. CIBC is leading the banks down, and Manulife Financial is doing the same for the insurers.
Biotechs, utilities, transports and golds are up strongly. BCE is leading utilities higher, joined by Teleglobe and Clearnet. Some of the other tech stocks are also enjoying strength, including ATI Technologies, Research in Motion. JDS Uniphase is benefiting from the ongoing consolidation in the optical equipment sector.
Biotechs are being led up by QLT Phototherapeutics, Biomira and NPS Allelix. Gold is up US$2.60 this morning, helping producers such as Placer Dome and Kinross. Oils are bouncing too after Merrill Lynch upped its outlook for oil prices and the stocks that love them.
In other business news Alberta Energy Co. has announced a $200 million debt issue to help fund recent acquisitions. Troubled retailer Dylex is said to be in buyout talks, after the company unofficially put itself up for sale.
In New York markets are mixed in light and directionless trading. The Dow is down 44 points to 10771. NASDAQ has gained 37 points to 3857. The S&P 500 is essentially unchanged at 1467.
The big news in the U.S. is that Unilever NV has finally agreed to buy Bestfoods in a US$24.3 billion deal for cash and assumed debt. The deal creates the world’s biggest food firm. Merrill Lynch & Co. has also confirmed its deal for market-maker Herzog Heine Geduld Inc. for US$914 million in stock.
Belgian brewer Interbrew NV is said to be close to a deal for Bass PLC’s brewing unit, a possible US$3.3 billion deal.
The small caps are similarly sleepy today. The CDNX is down a single point at midday to 3405 on light volume of 19.2 million shares. Mines are leading the way, with some minor buying in technology. Oils are sliding. Trimark Oil & Gas is the hot trader up 9% to 89¢on 1.1 million shares.