Market News June 7, 2007

Market closes for Thursday, June 7, 2007:

Dow Jones 13,266.73 -198.94 or -1.48% YTD: +6.45%
S&P 500 1,490.72 -26.66 or -1.76% YTD: +5.11%
NASDAQ 2,541.38 -45.80 or -1.77% YTD: +5.22%
TSX COMP 13,703.88 -237.71 or -1.71% YTD: +6.16%
TSX VENT 3193.77 -55.43

Canadian dollar $Cdn. $U.S.
BoC Closing rate 1.0636 0.9402
Previous BoC closing rate 1.0580 0.9452

Cdn. Dollar/Euro Spot Rate 1.4283 0.7001

Gold AM PM
London Gold Fix (US) $670.85 $668.75

Spot Crude Oil Future(US) $66.93 +$0.97 or +1.47

NEWS
Investor worries about higher interest rates and their impact on the global economy took their toll on North American stock markets for a second straight session Thursday, with indexes in Toronto and New York falling sharply.

Toronto’s S&P/TSX composite index tumbled 237.71 points to 13,703.88, on top of a 200-point drop Wednesday for a drop of 3.1% in two sessions.

The latest market drop on the TSX, which came after the main index hit a fresh record high Tuesday, has also raised concerns that the bull market in stocks may soon be over after record highs and double digit annual gains in recent years.

However, some market watchers say the latest drop was not unexpected, given the huge runup in prices in the last few years, including a 9.6% gain this year until the latest drop.

On most markets, interest rates have taken centre stage as investors worry that inflationary pressures around the world will lead central banks to boost interest rates and squeeze economic growth to fight inflation.

That would slow down economies in the United States, Europe and Asia and likely cut demand for Canadian exports of everything from metals and coal to lumber, chemicals and grain. Lower demand would squeeze corporate profits, the underlying driver of stock prices, analysts say.

Market watchers have also come to believe that, contrary to earlier expectations, the U.S. Federal Reserve won’t lower rates this year, and in fact may raise them.

Contributing to that view is the rise of the yield of the 10-year U.S. Treasury bond past the psychologically important 5% level for the first time since last August because of worries about rising inflation and the prospect of higher central bank interest rates. The bond has surged about half a point in the last month.

On Thursday, the yield was up to 5.12%.
Beyond the concerns about rising interest rates on corporate borrowing and consumer spending, higher bond yields are bad news for stock markets because investors feel they can net a safer return in fixed income instruments such as bonds.

Bond prices also fell on markets abroad, sending rates in other countries higher as well.
The Canadian 10-year rate is lower, with central bank key rates a percentage point higher in the U.S., and was yielding 4.6% Thursday, which in turn put upward pressure on mortgage rates.

Meanwhile, the Canadian dollar stepped back from Wednesday’s new three-decade high, trading down 0.5 cent at 94.02 cents US

On the TSX, the interest-rate-sensitive financial sector moved lower, as it has all week, losing 1.3%.
The energy sector moved down almost 2% even as oil prices headed higher. The July crude contract on the New York Mercantile Exchange was up 97 cents to $66.93 a barrel.

The industrial sector fell 2%. Canadian National Railways declined $1.41 to $55.75.
On the TSX, declines again overwhelmed advancers 1,289 to 355 with 228 unchanged as 420.3 million shares traded worth $7.8 billion.

Overseas, London’s FTSE 100 index closed flat as the Bank of England held the line on rates. Frankfurt’s DAX 30 and the Paris CAC 40 both fell about 1.5%.

Tokyo and Hong King markets also put in a flat showing. (Canadian Press)
TSX
Most Active By Trading Volume*

Symbol Price $ Change % Change Volume
A 2.780 -0.060 -2.11 20,139,549
DY 4.740 -0.260 -5.20 14,032,616
BBD.B 5.870 -0.110 -1.84 11,310,440
SXR 14.460 -0.830 -5.43 7,790,409
FNI 1.300 -0.170 -11.56 5,709,849
LIM 27.310 +0.020 +0.07 5,631,695
K 13.680 -0.520 -3.66 5,120,563
YRI 13.940 -0.680 -4.65 5,111,596
CHD 0.960 -0.040 -4.00 4,889,411
EQN 3.160 -0.130 -3.95 4,304,626
RY 55.890 -0.460 -0.82 4,202,198
TLM 21.120 -0.450 -2.09 4,064,478
XIU 78.700 -1.310 -1.64 3,945,068
BCE 39.400 -0.180 -0.45 3,907,133
G 25.300 -0.870 -3.32 3,794,248

TSX VENTURE
Most Active By Trading Volume*

Symbol Price $ Change % Change Volume
GQC 1.410 -0.090 -6.00 7,284,835
AFA 0.285 -0.065 -18.57 6,691,400
GCR 2.450 -0.680 -21.73 6,661,185
FO 2.740 -0.290 -9.57 6,512,664
DIB 1.280 +0.000 +0.00 5,983,400
GCL 0.850 +0.030 +3.66 4,680,622
IMR 0.440 -0.560 -56.00 3,622,106
AGX 0.320 -0.085 -20.99 3,512,675
TWD 0.375 +0.035 +10.29 3,430,587
PIK 0.690 -0.090 -11.54 3,362,820
SUL 0.415 -0.065 -13.54 3,011,966
KLA 0.130 -0.010 -7.14 2,809,100
CLM 5.650 -0.200 -3.42 2,610,275
FVR 0.450 +0.050 +12.50 2,466,250
SDN 0.240 -0.080 -25.00 2,055,800

TRADING HALTS/RESUMPTIONS
Trade Resumption – Strickwell Energy Corp. – SKK
Trading Halt/ Trade Resumption – IMA Exploration Inc. – IMR
Trading Halt/ Trade Resumption – Aquiline Resources Inc. – AQI
Trading Halt /Trade Resumption – Geoinformatics Exploration Inc. – GXL
Trading Halt – Beta Minerals Inc. – BMI ,Pending News
Trading Halt – Monster Copper Corporation – MNS , Pending News
Trade Resumption – Golden Chalice Resources Inc. – GCR
Trade Resumption – Ripper Oil and Gas Inc. – RIP
Trade Resumption – Outlook Resources Inc. – OLR
Trade Resumption – Wallbridge Mining Company Limited – WM
NEW LISTINGS
Espial Group Inc. To Trade On Toronto Stock Exchange , ESP , 8,756,482 Common Shares will be issued and outstanding and 1,587,176 Common Shares will be reserved for issuance upon completion of a public offering (the “Offering”)4,106,650 Common Shares are being offered to the public at a price of $7.00 per Common Share ., will be posted for trading at the opening on Friday, June 8, 2007 upon confirmation of the closing of the Offering.

Cobalt Energy Ltd. To Trade On TSX Venture Exchange, CB.B , (5,288 units at $1,000 per unit). Each unit consists of 480 flow-through Class A shares at a price of $0.25 per share and 88 flow-through Class B shares at a price of $10.00 per share.At the opening Friday, June 8, 2007, the Class A shares and Class B shares will commence trading on TSX Venture Exchange.

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