Market News May 18, 2007

Market closes for Friday, May 18, 2007:

Dow Jones 13,556.53 +79.81 pts or +0.59% YTD: +8.77%
S&P 500 1,522.75 +10.00 pts or +0.66% YTD: +7.36%
NASDAQ 2,558.45 +19.07 pts or +0.75% YTD:+5.93%
TSX COMP 14,105.34 +4.63 pts or 0.03% YTD: +9.27%
TSX VENT 3279.60 +43.05
Canadian dollar $Cdn. $U.S.
BoC Closing rate 1.0895 0.9178
Previous BoC closing rate 1.0987 0.9102

Cdn. Dollar/Euro Spot Rate 1.4721 0.6793 Euro

Gold AM PM
London Gold Fix (US) $660.75 $657.00

Spot Crude Oil Future(US) $64.94 +0.08 or +0.12

NEWS
The Canadian dollar had its highest close since the height of the disco era on Friday, while the Toronto stock market drifted to a slightly higher record close after establishing a firm foothold above the 14,000 mark this past week.

U.S. stocks were much more active, closing sharply higher after a reading on consumer sentiment proved stronger than expected and investors got another dose of merger and acquisition activity.

Toronto’s S&P/TSX composite index added 4.63 points to 14,105.34,. Energy, mining and telecom stocks gained while financials dragged ahead of quarterly earnings reports from the big banks coming down over the next couple of weeks.

The Canadian dollar jumped 0.77 of a cent to its 91.79 cents US, its highest close since October, 1977 – down slightly from the session high of 91 cents US – after Statistics Canada said retail sales surged 1.9% in March to $34 billion, much more than the 0.7% rise economists had expected.

The currency’s gain came atop Thursday’s 0.43-cent rise prompted by a hotter than expected inflation report for April.
Both days’ data were seen as putting the Bank of Canada under pressure to raise interest rates, after holding its policy rate unchanged at 4.25% since last May.

“Our view right now is that it probably won’t happen until the fourth quarter,” said George Davis, chief technical analyst at RBC Capital Markets.

“But certainly if we continue to get a string of strong numbers . . . the risk is going to be that potentially that tightening horizon is brought forward.”

The loonie is up almost seven per cent year-to-date on strong economic data , higher commodity prices and a wave of merger and acquisition activity that has boosted demand for the currency.

However, the stock market isn’t that happy with the latest spike in the currency as a higher dollar makes it tough for exporters such as manufacturers and forestry companies.

Despite the lacklustre showing, the TSX managed to exploit a small breakthrough past the 14,000 mark this past week, gaining 101.52 points.

“I think what we have from a big picture is we are still very clearly in an upward trend,” said Julie Brough, assistant vice president at Morgan, Meighen and Associates.

“But I think that given the seasonality that we tend to get over the summer when you get a little bit of weakness, that it’s going to be harder moving the index. So I think we continue to trend up but I think it’s choppier.”

On Wall Street, the Dow Jones industrial average rose 79.81 points to 13,556.53 after the University of Michigan index of consumer sentiment for May came in at 88.7, higher than expected.

Another indication of firm U.S. consumer spending came as retailers J.C. Penney, Kohl’s and Nordstrom posted earnings that surpassed Wall Street projections.

Microsoft Corp. said Friday it will purchase online advertising firm aQuantive Inc. for US$6 billion in cash, while General Electric Co. was reported to be near an agreement with a Saudi industrial giant to buy GE’s plastics division for US$11 billion.

On the TSX, the financial sector was down 0.6% with TD Bank off 46 cents to $70.39 and Bank of Montreal losing 31 cents to $69.09.

The energy sector was up 0.8%. The June crude oil contract on the New York Mercantile Exchange was up eight cents to US$64.94 a barrel. Petro-Canada advanced 66 cents to $54.30.

Precision Drilling Trust sagged $1.32 to $28.80 after cutting its distribution again, this time to 13 cents per unit monthly from 19 cents. Canada’s largest oilfield services provider cited “low equipment utilization levels . . . and an increasingly competitive pricing environment.”

Shares in Imperial Oil, a major player in the proposed Mackenzie Valley gas pipeline, jumped $1.28 to $49.99 after the head of an aboriginal consortium involved in the project said the federal government is considering at least a partial buyout of the energy companies involved.

On the TSX, advances beat declines 932 to 689 with 203 unchanged as 338.3 million shares traded worth $5.7 billion. (Canadian Press)

TSX
Most Active By Trading Volume*

Symbol Price $ Change % Change Volume
EQN 2.770 +0.110 +4.14 15,537,697
BCE 38.720 +0.840 +2.22 7,285,152
SXR 16.580 +1.180 +7.66 6,118,494
IQ 0.165 -0.005 -2.94 5,140,900
SAG 0.050 +0.010 +25.00 5,133,700
KHD 6.280 -0.120 -1.88 5,090,197
G 25.900 +0.430 +1.69 4,556,859
SRU 1.020 +0.030 +3.03 4,138,549
LIM 27.640 -0.050 -0.18 3,886,192
BWR 2.410 +0.090 +3.88 3,861,028
CZQ 3.150 +0.400 +14.55 3,633,091
AER.UN 21.910 +0.730 +3.45 3,489,421
TLM 21.870 +0.030 +0.14 3,196,858
ELD 6.340 +0.230 +3.76 3,118,061
NXY 33.640 -0.200 -0.59 3,055,986

TSX VENTURE
Most Active By Trading Volume*

Symbol Price $ Change % Change Volume
GCR 1.730 +0.350 +25.36 6,642,840
BLV 1.250 +0.080 +6.84 5,133,209
FO 3.590 +0.130 +3.76 3,640,497
PFM 1.470 -0.250 -14.53 3,582,105
BVT 0.540 +0.075 +16.13 2,950,833
SGG 0.110 +0.015 +15.79 2,670,600
RGT 2.680 +0.530 +24.65 2,337,255
SFR 0.330 -0.130 -28.26 2,193,300
AFA 0.380 +0.035 +10.14 2,173,750
DIB 1.290 -0.090 -6.52 2,170,900
RGD 1.420 -0.090 -5.96 1,918,000
PBR 0.600 -0.050 -7.69 1,770,500
GML 0.580 +0.060 +11.54 1,647,957
AGX 0.190 +0.030 +18.75 1,485,800
DEV 1.390 +0.180 +14.88 1,474,462

TRADING HALTS/RESUMPTIONS
Trading Halt – Energy Metals Corporation – EMC , Pending News
Trading Halt/ Trade Resumption – Thunderbird Resorts Inc. – BIRD.U
Trading Halt – United Reef Ltd. – URP, URPL ,Pending News
Trading Halt – Evergreen Gaming Corp. – TNA , Pending News
Trade Resumption – Excelsior Energy Limited – EXEL
NEW LISTINGS
Eagle Hill Exploration Corporation To Trade On TSX Venture Exchange ,EAG.P, CPC, 10,000,000 common shares at $0.10 per share, At the opening May 18, 2007

Sources include Advisors.ca, TSX.com, Canadian Press, Yahoo Finance,
Stockhouse.com
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