Bargain hunting helps move stocks up despite Iraqi uncertainty; Dow up 158.93

www.therecord.com Saturday February 14, 2003 - 18:42:42 EST MALCOLM MORRISON

TORONTO (CP) - Stocks finished higher Friday as investors swooped to buy beaten-down shares in what's perceived to be an oversold market amid uncertainty as to what will happen next with the Iraqi crisis.

The Canadian dollar closed at 65.66 cents US, down 0.23 after a half-cent gain Thursday, and gold fell $5.70 to $351.30 US an ounce in New York. Stock markets took heart from a relatively positive assessment of Iraqi compliance from chief United Nations chief weapons inspector Hans Blix, who said Friday that UN inspectors haven't found any weapons of mass destruction.

On the other hand, Blix said, many banned military materials remain unaccounted for and U.S. State Secretary Colin Powell asserted "the threat of force must remain" - causing markets to initially give up their early gains.

Still, the Dow industrial average was up 158.93 points to 7,908.8 late in the day. The blue-chip barometer edged up 44 points on the week.

The Nasdaq was ahead 32.73 at 1,310.17 for a gain of 27.7 points this week and the S&P 500 index rose 17.52 to 834.89.

Gains in the information technology sector helped balance weakness in the gold sector to give the S&P/TSX index a gain of 34 points to 6,487.13, adding 9.39 points this week. The junior TSX Venture Exchange was up 8.36 at 1,095.49.

On the Toronto Stock Exchange, Nortel Networks advanced 11 cents to $3.53. The financial sector was also stronger as Royal Bank rose $1.30 to $56. The gold sector fell 2.6 per cent. Barrick Gold lost 87 cents to $24.

Crude oil futures edged up 44 cents to a 29-month high of $36.80 US a barrel on the New York Mercantile Exchange. Crude prices have been pushed up by the Iraqi crisis and a general strike in Venezuela, another major petroleum producer.

Analysts were doubtful the gains of the session would stick since the Blix report didn't convince markets that war would be averted.

"The running assumption in the markets right now is that there will be a war, it will happen - happen very quickly - and the second half of the year will be very strong," said Mark Chandler, financial markets economist at Scotiabank.

The U.S. market was supported by a solid earnings report Thursday from Dell Computer. The No. 2 maker of personal computers reported record fourth-quarter sales and a profit of $603 million US, up 32 per cent. Its shares rose $2.54 to $25.77 US.

In economic data, American industrial production rose 0.7 per cent in January after a 0.4 per cent drop in December. But the University of Michigan consumer confidence index fell to 79.2 for February, its lowest level since September 1993. A reading of 82.5 had been expected.

Analysts said the confidence number had little effect on the markets, perhaps because previous swings in the index have not been reflected in consumer spending.

"What they tell the polls is very different from what they do at the shopping mall," said Patricia Croft, managing partner at Sceptre Investment. "So I pay more attention to what they do than what they say."

On the Toronto market, advances beat declines 545 to 496 with 225 unchanged.

The bottom line of Telus, Canada's second-largest phone company was hit by restructuring and workforce-reduction charges. Losses for the fourth quarter totalled $139.2 million, triple the $46.7-million loss a year ago. Telus shares rose 52 cents to $16.90.

Rogers Communications, which controls major cable TV, wireless phone, broadcasting, publishing and sports businesses, reported a sharp turnaround from a $173.7-million loss a year ago.

But the $698.2-million profit at Rogers Communications came from a $904.3-million gain on the sale of its shares in AT&T Canada. Excluding non-recurring items, Rogers lost $88.3 million. Rogers B shares rose 78 cents to $13.63.

Shares in the Brascan conglomerate were ahead 20 cents at $29.90 after it reported that it lost $174 million in the fourth quarter after a charge at its Noranda mining subsidiary. However, Brascan reported solid results from its financial, property and energy-generation operations, with cash flow from operations up 17 per cent on the year.

Another big Canadian conglomerate, Onex, lost $145 million last year as several businesses it controls - notably electronics assembler Celestica - struggled. Onex shares lost 17 cents to $14.45 while Celestica advanced 44 cents to $16.60.

Canfor was down 24 cents to $9.46 after the B.C. forestry producer said it earned $11.5 million in 2002, despite low prices for lumber and pulp and the burden of $108 million in American import tariffs. The year's profit was down from $26.4 million in 2001. Canfor stock fell 24 cents to $9.46.

Other active Toronto stocks included ATI Technologies, ahead 27 cents at $6.43, Bombardier, up 15 cents to $5, and Inco, down 47 cents to $31.43.

Toronto volume was 143.8 million shares worth $1.61 billion.

The Nasdaq Canada index was up 2.31 points to 222.25.