Wednesday Market Report

Canada's Standard & Poor's/TSX Composite Index advanced to the highest in almost three months, led by energy producers including Canadian Natural Resources Ltd. as oil prices held above $76 and natural gas climbed. The S&P/TSX increased 9.97 points, or 0.1 percent, to 12,008.15, the highest since May 12.

The S&P/TSX capped gold index added 4.39 points, or 1.40%, to 318.05. The S&P/TSX capped energy index rose 3.89 points, or 1.08%, to 364.76.

U.S. stocks fell for a fourth day as concern that the Federal Reserve's two years of interest-rate increases may slow economic growth outweighed earnings that exceeded analysts' estimates. Indexes gave up early gains triggered by a sales forecast at Cisco Systems Inc., the world's largest maker of computer-networking equipment, that lifted technology stocks. Higher-than-forecast earnings at Walt Disney Co. and Federated Department Stores Inc. aided the initial advance. The Standard & Poor's 500 Index lost 5.53 points or 0.4 percent, to 1,265.95, after earlier rising as much as 1 percent. The Dow Jones Industrial Average fell 97.41 points, or 0.9 percent, to 11,076.18.

TOP STORY

The Canadian government hopes to introduce new softwood legislation when Parliament reconvenes around Sept. 18, and it needs industry backing for the agreement to be implemented. "I'm very optimistic that we will achieve a significant, substantial, amount of support by Aug. 21," International Trade Minister David Emerson said Wednesday after meeting with industry executives. That "is the date I have given them, by which I need to know, with some precision, which companies are supporting this agreement so I can make a recommendation to cabinet and to the prime minister on whether we proceed with the softwood lumber agreement."
Many in the export sector have said they won't back the deal without several changes, including changes to the agreement's termination clause, so-called running rules and the tax treatment of re-manufactured wood products from B.C. private woodlots. Emerson reiterated that no changes will be made to the deal, adding the discussions were instead focused on clarifying the procedural and administrative details.

The ministry now plans to talk with provincial governments and U.S. representatives to follow-up on the clarifications requested. If this deal were not to proceed, it said, there would be "no further negotiation for the foreseeable future."

IN THE NEWS
The October price for bullion in New York moved up $4.60 to $655.50 US an ounce, sending the TSX gold sector ahead 1.4 per cent.

Crude oil for September delivery rose as much as 1.4 percent to $77.40 a barrel in New York, before ending little changed at $76.35. An Energy Department report showed that U.S. gasoline and oil inventories declined more than forecast.

European stocks rose as better-than- expected earnings from Adidas AG and Hagemeyer NV as well as Cisco Systems Inc. of the U.S. bolstered investors' optimism that companies may withstand higher interest rates. Benchmarks rallied in afternoon trading. The Dow Jones Stoxx 600 Index gained 0.7 percent to 326.61 after earlier losing as much as 0.6 percent. The Stoxx 50 rose 1 percent, while the Euro Stoxx 50, a measure for the 12 nations sharing the euro, added 1.1 percent.

Nikkei 225 Stock Average futures expiring in September last traded in Chicago at 15,555, down from 15,660 in Osaka and 15,655 in Singapore. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, advanced 0.9 percent. The Nikkei jumped 1.2 percent yesterday to 15,656.59 and the broader Topix index advanced 1 percent to 1,578.43. Stocks may slide tomorrow over concerns the Federal Reserve may continue interest-rate increases and slow economic growth in the US.

Latin America is in the midst of its most significant trade boom in a quarter of a century. Indeed, the total trade of goods expanded by a staggering 43% over the past two years, a performance not seen in the region since the early 1980s. The current trade boom, however, has not been limited to Latin America and its main trading partners. Few economies in the world have been more important to this powerful trade dynamic than China.

The Canadian dollar climbed 0.11 of a cent to 89.26 cents US as Canada Mortgage and Housing Corp. reported seasonally adjusted annual rate of starts came in at 236,500 units, up marginally from June by 100 units.