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Toronto stock index ends at record high, Nortel up

TORONTO: Toronto's main stock index ended trade at a record closing high on Tuesday following big gains by heavyweight Nortel Networks Corp and cautiously optimistic words by US Federal Reserve chairman Alan Greenspan.

Investors bid Nortel Networks up C$3.30 to C$120.75 ahead of its earnings release and after speculation on Monday that the telecommunications equipment giant may sell its fiber optic parts business to Corning Inc. After the market closed, Nortel reported second-quarter earnings that topped market expectations by 28.5 percent.

"The breadth wasn't terribly impressive, but certainly the headline is eye-catching," said Doug Porter, senior economist at Nesbitt Burns in Toronto. "The fact that the (Toronto Stock Exchange 300 Composite Index) had yet another strong day and hit a record high."

The TSE 300 ended up 83.59 points, or 0.78 percent, at a record close of 10,867.07 on volume of 131.6 million shares worth C$3.33 billion. The last record close was 10,844.52, set July 17.

But the overall market was mixed as declining issues outpaced advancers 566 to 461 with another 312 unchanged.

The blue-chip S&P/TSE 60 closed up 8.21 points, or 1.24 percent, to 669.71.

In the second half his two-part semi-annual address to the US Congress on Tuesday, Greenspan said the surging US economy was shifting to a safer speed, but he made clear he had not yet decided whether US interest rates had risen enough.

"To me one of the most telling statements, and it was quite blunt, was that the data over the next couple weeks will determine whether the Fed moves in August or not. Well there's certainly nothing earth-shattering in that statement, I think it keeps it on the front burner that the issue is not over and done with," Porter said.

In New York, the Dow Jones industrial average advanced 14.85 points, or 0.14 percent, to 10,699.97.

The blue-chip index's financial services and technology components were mixed. Among the highlights, telephone and cable television giant AT&T Corp was up 5/8 to 33-15/16 after its second-quarter profits beat year-ago results.

The technology-heavy Nasdaq composite gained 48.00 points, or 1.21 percent, to 4029.57, recouping less than half of Monday's 113-point loss.

In Toronto, half of the TSE 300 subindexes finished in positive territory, led by industrial products, home to Nortel and other technology issues.

But apart from Nortel, which accounts for one-third of the TSE/300 index, most of the tech stocks finished down.

JDS Uniphase Corp, which is expected to report its earnings on Wednesday, lost C$1.90 to close at C$191.10.

Ballard Power Systems fell C$8.10 to C$142.00, BCE Emergis dropped C$5.00 to C$96.00 and Celestica Inc slipped C$4.65 to C$93.75.

Among other losers, metals and minerals slid 0.97 percent, oil and gas slipped 0.93 percent and transportation dipped 0.67 percent.

Banking stocks gained 0.67 percent, with Bank of Montreal up 30 Canadian cents to C$64.50, Bank of Nova Scotia up 45 Canadian cents to C$37.40, and Royal Bank of Canada gaining C$1.05 to C$79.60.-Reuters