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Market News: At Noon
 
Stocks trade mixed (RTGAM)
TERRY WEBER
 
  Stocks traded mixed Wednesday as oil climbed to a record highs after the U.S. Department of Energy said crude inventories rose less than expected last week and household heating oil costs will rise 28 per cent over last year's levels.

Shares of Open Text Corp. plunged as much as 20 per cent in Toronto after the software maker warned for the second time in five weeks. Sirius Satellite Radio Inc. rallied 13 per cent after the company said it has signed Howard Stern to a five-year agreement.

Delphi Corp. also weighed on the U.S. market after the world's biggest car parts maker said its third-quarter loss will be wider than expected. Energy stocks rose on both sides of the border.

The S&P/TSX composite index gained 20.75 points or 0.24 per cent to 8,817.80 with gains by financials such as Bank of Nova Scotia and Royal Bank of Canada and energy stocks outweighing Open Text's decline. Some 105 stocks rose while 106 declined on the benchmark index.

The Dow Jones industrial average rose less than a point to 10,178.35 and the S&P 500 index added 1.39 points to 1,135.87. The Nasdaq composite index fell 3.87 points to 1,951.63.

In New York, crude prices were up 58 cents to $51.67 (U.S.) after earlier rising to a record high $51.80 and yesterday closing above $51 for the first time ever. The Department of Energy said crude stockpiles rose 1.1 million barrels for the week ended Sept. 24, short of the 2.75 million-barrel gain expected by analysts surveyed by Bloomberg News.

“It seems that any news that gives even a hint of there being a risk to future supply adds a few more pennies to the price,” BMO Nesbitt Burns senior economist David Watt said. “The most recent hot spot remains Nigeria, where a strike is planned for this Sunday at midnight.”

Distillate stocks, which include heating oil, fell 2.1 million barrels, more than the 900,000-barrel decline expected.

“Average residential natural gas prices are expected to be 11 per cent higher than they were last winter, and household expenditures are expected to be 15 per cent higher,” the Department of Energy's Energy Information Agency said. “Heating oil prices are expected to average 29 per cent higher compared with last winter and household expenditures are expected to be 28 per cent higher.”

Supply fears have gripped the market in the wake of Hurricane Ivan, which damaged U.S. oil holdings in the Gulf of Mexico, prompting a temporary shutdown in production.

Petro-Canada climbed 2.6 per cent, Imperial Oil rose 1.74 per cent and Suncor Energy advanced 1.4 per cent. The S&P/TSX energy index rose 2 points to a record 194.92.

Open Text shares tumbled $5.05 or 20 per cent to $20.35 in Toronto, while its U.S.-traded shares fell $4 (U.S.) to $16.05 on Nasdaq. Prior to the warning, the stock was up 3 per cent so far this year.

After the close of trading Tuesday, Waterloo, Ont.-based company said it expects a first-quarter loss between 1 and 4 cents a share. On an adjusted basis, earnings will come in between 3 and 6 cents a share while sales will range from $84-million and $86-million. Analysts polled by Thomson First Call were expecting earnings of 11 cents on sales of $89-million.

On August 31, Open Text forecast an adjusted profit of 7 to 12 cents a share on revenue of $87-million to $93-million for the quarter ended September 30. Those forecasts were below analysts' average expectations. At the time, Open Text attributed the weaker outlook to seasonality at its Ixos unit.

Delphi shares dropped 38 cents or 4 per cent to $8.93 (U.S.) after the company announced after the bell Tuesday that it now expects to report a pro forma net loss of $65-million to $72-million in the third quarter, compared to prior guidance for a loss of $20-million to a gain of $10-million. Revenue for the quarter is expected to come in at $6.65-billion, topping the consensus estimate for $6.59-billion.

Sirius shares rose 52 cents to $3.87 after radio host Howard Stern said he will begin broadcasting on Sirius Satellite Radio on Jan. 1.Sirius, which delivers commercial-free music and sports programming, negotiated the five-year, “multi-million dollar” agreement with Don Buchwald, who represents Mr. Stern.

Elsewhere, economists on both sides of the border continue tapping their toes waiting for the release Friday of September employment figures on both sides of the border.

Ahead of those key numbers, Canadian markets will get a look at August building permit figures, which are expected to have risen 2.5 per cent after July's 11.4-per-cent decline. The report is due ahead of the opening bell.

The Canadian dollar, meanwhile, was holding back above 79 cents (U.S.), trading at 79.12 cents, down slightly from Tuesday's closing price of 79.27 cents.

 


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