Canadian shares are falling, as traders book profits. Yesterday, the market rallied on news the government was planning to cut taxes on dividends. Activity on Wall Street was muted, a day after the Thanksgiving holiday, with the major U.S. averages staging a mixed-to-positive performance.
* The S&P/Toronto Stock Exchange Composite Index is losing 25.59 points,
* In resources, material shares are gaining ground, taking their cue from
higher gold prices. Also, in research, ScotiaBank upped its price target
on Placer Dome to US$25 from US$19.50.
* In the paper sector, however, Domtar is slipping on news it has closed
its Lebel-sur-Quevillion pulp mill due to unfavourable economic
conditions. The plant employed 425 workers
* In other resources news of note, Northgate Minerals is adding gains on a
positive exploration report, while in the energy group, Petrolifera
Petroleum reported a significant crude oil discovery. Also, Westwind
started Exall Resources at “buy,” while Globex Mining and Queenston
Mining purchased the Central Cadillac Gold Mine property and reported an
additional high-grade gold intersection.
* In other sector movements, tech shares are mixed to higher, with
Research in Motion rebounding from news on Wednesday that it had lowered
its subscriber additions forecast.
* Meanwhile, bank shares are slumping on profit-taking, after the
dividend-paying stocks surged yesterday on news of lower taxes.
Desjardins Securities was upbeat on the group, saying the proposed tax
cut would level the playing field with income trust and “result in a
corresponding 17% increase in after-tax income for taxable individual
investors in Canada receiving dividends from corporations.” The broker
was particularly bullish on TD-Bank and Bank of Montreal.
* Turning to consumer-related stocks, analysts are keeping an eye on
anecdotal evidence and trends in retail stores in the U.S., as the day
after Thanksgiving is traditionally the biggest shopping day of the
year. Closer to home, UBS raised its 2006 price targets on lodging
stocks, citing strong fundamentals and risk. Fairmont Hotels saw its
target increased to US$39 from US$34.
* On the M&A front, the board of Hudson’s Bay made a unanimous
recommendation against an unsolicited C$14.75 a share bid by Maple Leaf
Heritage Investments Acquisition Corp.
* Finally, in the healthcare sector, Hemosol is losing ground after
announcing late yesterday that the company had become insolvent.