By James Langton
(February 21 – 17:00 ET) – Canadian traders simply continued Friday’s sell-off today. U.S. markets were observing President’s Day. The TSE 300 closed down 64 points to 9,231. Volume was comparatively light although heavy penny stock trading pushed across 229 million shares on the TSE.
Volume was about 6:1 in favour of buyers with superficial penny stocks accounting for much of the buying. Market breadth also favoured the bulls, with advancers outpacing decliners 13:10.
Despite the positive internals, weakness in big cap tech stocks pushed the market lower throughout the day. The utilities, industrials and miners were the only down groups, but they were enough to overwhelm all the buying. Strength was concentrated in real estate, golds, conglomerates and financials.
Nortel Networks Corp. dropped more than 4 percent on 1.1 million shares. BCE Inc. was down 3.5 percent This sparked drops in Sierra Wireless, BCE Emergis and others. Infowave Software dropped 10 percent. The prospect of interest rate rises knocking back tech stock valuations seemed to be the source of trouble. Internet gossips expressed some skepticism about the current strategies at firms such as Nortel too.
Cinar remained the big loser on the day as talk of fraud in the Canadian film business resurfaced. The stock dropped about 26 percent.
The volume was thoroughly dominated by penny stocks. Miners, former miners, and anthing with a whiff of the Internet around it traded like crazy today. William Resources moved 28.7 million shares, up 30 percent. Vengold added 22 percent on 20.7 million shares. And so the story goes through the TSE volume leaders.
The upside was led by individual tech stocks that are deemed to have plenty of potential regardless of interest rates. 724 Solutions finished up 7.4 percent at $204. Ballard Power closed up sharply, as did Cognicase, Descartes Systems and MGI Software. Bowater and Potash Corp. posted nice gains for the resource groups.
Corus Entertainment finished up 17 percent after Liberty Media announced its intention to take a 19% stake in the firm.
In other news Loblaw Cos. Ltd. is reporting better-than-expected fourth quarter results, 53¢ per share compared with 38¢ in the period last year. Analysts were expecting something in the 48¢ range. Onex Corp. is reporting 1999 earnings of $3.34 per share, up from $1.95 last year.
The small caps continued to rise today, with CDNX closing up 32 points to 3,537. Volume was heavy at 128 million shares. Miners and technology were both up more than 2% on the day, while energy stocks climbed modestly. Everest Mines & Minerals was the hottest trade, up 28% on 8.1 million shares.