World stock markets move higher

www.thestar.com Mar. 19, 2003. 11:22 AM JAMES DALZIEL CANADIAN PRESS

North American stock markets were narrowly mixed early today as investors took a cautious approach in the high likelihood of an imminent U.S.-led war against Iraq. The countdown to an attack continued as long columns of U.S. troops, armoured vehicles and trucks advanced toward the Iraqi border, positioning themselves to invade if Saddam Hussein misses the Wednesday night deadline to surrender power.

Toronto's S&P/TSX composite index moved 24.01 points higher to 6,462.62 after closing up 31.98 points. The junior TSX Venture Exchange was flat at 1,061.

Hopes for a short war also fired up the American dollar, in turn driving the Canadian currency lower by 0.31 of a cent to 67.51 cents US.

The euro was quoted at $1.0598 US, down from $1.0621.

The loonie had climbed 0.26 of a cent Tuesday after Bank of Canada governor David Dodge reiterated in a speech in Rome that more interest rate hikes will be needed to get Canada's inflation back down to the central bank's targets.

New York's Dow industrial average rose 12.98 points to 8,207.21 after advancing 52.31 points Tuesday, moving up a total of 669 points in the past five sessions. The Nasdaq lost 9.27 points to 1,391.28 after edging 8.28 points higher Tuesday while the S&P 500 was up 1.51 at 867.96.

In corporate news, DuPont Canada's U.S. parent is offering $1.4 billion to take the firm private. The two companies announced today that DuPont will offer $21 a share to buy the 24 per cent of DuPont Canada Inc. stock it doesn't already own. DuPont Canada shares were unchanged at $17.24.

Softness on the Nasdaq came after software maker Oracle Corp. reported a cautious outlook for a recovery in technology spending late Tuesday.

The company posted a 12 per cent rise in fiscal third-quarter profit and said revenue grew modestly, helped by growth in sales of software upgrades to existing customers.

But the company said revenue from new software licences and sales of its flagship database product line each fell four per cent. Its shares were down 78 cents to $11.47 US.

Generally, stock markets have been driven higher since the middle of last week as investors look to the rally that followed the start of the 1991 Persian Gulf War and hope that history repeats itself.

"There's a hope that a swift victory will create a perverse twist in Wall Street theory: Sell on the rumour and buy on the fact," said market commentator Bryan Piskorowski of Prudential Securities Inc. in New York.

But there's plenty of reasons for caution, including the possibility of torched oil fields, use of biological weapons and terrorist attacks.

Crude oil prices added to Tuesday's drop in prices, down 57 cents in New York to $31.10 US a barrel. The Toronto energy sector was flat, but Suncor Energy rose 25 cents to $24.88.

On Tuesday, prices in New York plunged $3.25 US a barrel in the biggest one-day drop in almost a year.

While U.S. crude inventories remain uncomfortably low, OPEC producers other than Iraq and strife-torn Venezuela have been increasing production for weeks.

Much of that oil is now in storage or in tankers on the high seas, say oil analysts. Saudi Arabia is believed to have as much as 50 million barrels in storage in the country and more en route to other storage facilities. That's enough to replace Iraq's 1.5 million to two million barrels a day for about a month.

Gold moved lower with the price of the metal slipping $1.50 to $335.70 US an ounce. Kinross Gold retreated 14 cents to $8.85.

On the Toronto market, financials provided most of the lift as Scotiabank gained 60 cents to $52.30.

Active stocks included Celestica, down 25 cents to $19.60. CAE tumbled 42 cents to $3.75 after the firm announced a debenture issue and Coolbrands International surged 45 cents to $6.90.

Shares in Quebecor World lost 72 cents to $23.90, on top of Tuesday's 24.5 per cent plunge, after chief executive Michel Desbiens suddenly resigned only a few weeks after he took the job. The huge printing company also issued a profit warning.

In other corporate news, shares in Transat A.T. Inc., a major travel company and operator of Air Transat, were unchanged at $5.63 after it slashed first-quarter losses and revenue jumped 20 per cent from a year earlier. Losses came in at $7 million, down from a $17-million loss a year earlier.

Air Canada shares were off four cents after the firm drafted a plan to cut $200 million in labour costs by closing two call centres, cutting 30 per cent of the jobs in the remaining centres and slashing some employee wages by 27 per cent.

Overseas, Tokyo's 225-issue Nikkei Stock Average rose 96.58 points, or 1.21 per cent, to close at 8,051.04, led by key exporters including automaker Honda and technology issues Nikon and Sony.

Hong Kong shares enjoyed a second consecutive day of gains, with some traders placing bets ahead of several key earnings announcements. The Hang Seng Index climbed 117.08 points, or 1.29 per cent, to 9,158.59.

London's FTSE 100 index rose 45 points or 1.2 per cent to 3,792.3 in late-afternoon trading, and Frankfurt's DAX and Paris's CAC 40 indexes each rose about two per cent.