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Americas' modest gains
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November 6, 2000: 7:00 p.m. ET
Telecoms boost Brazil; Telmex helps Mexico; Cisco scares Toronto
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NEW YORK (CNNfn) - Modest gains in internationally attractive telecom and tech stocks helped temper early losses in the Americas Monday, stabilizing some markets and moving others into positive territory.
Gains in liquid telecom shares, such as Telemar, helped boost the Brazilian Bovespa stock index by 1.8 percent.
The Mexican IPC index posted moderate gains, rising 0.64 percent by the close. Buying in heavy weight Telmex helped temper losses in conglomerates and homebuilders.
The Toronto Stock Exchange's 300 composite index lost a minor 0.06 percent by the close. Pre-announcement nervousness over Cisco's earnings created a small tech scare. Oil and gas issues were also hurt.
Brazilian stocks rise
Brazilian shares bobbed higher on Monday, buoyed by hearty gains in heavyweight telephone company Telemar as investors jostled for a stake ahead of the company's third-quarter earnings report, traders said.
The Sao Paulo benchmark stock exchange index ended 1.8 percent higher at 14,798, with Telemar and oil company Petrobras among the leaders of the pack.
The outlook for quarterly reports "is very positive," said Roberto Dotta Filho, head of equities at Tudor Asset Management in Sao Paulo. "Results reported so far have been very good and we are seeing a lot of last-minute buying in the telecoms sector."
 Telemar's preferred shares gained 3.3 percent to 43.40 reals although the company's common stock stole the show, jumping 6.2 percent to 32.50 reals. Telemar is the second most-heavily weighted share on the index.
Traders said investors bought into Telemar on expectations of a solid third-quarter earnings report, scheduled to be released Friday. Investors sought out the lower-priced common stock more than the preferred share, said one trader.
Oil company Petrobras added 2.2 percent to 51.19 reals. Petrobras is scheduled to report its earnings Nov 16. Investors turned a blind eye to a Petrobras oil spill at the weekend that coated popular Brazilian beaches with crude oil.
Investors also enjoyed a brief respite on Monday from jitters over neighboring Argentina's economic woes, with financial markets there closed for a public holiday, traders said.
Former Argentina President Raul Alfonsin mused on a talk show Friday about the potential benefits of postponing $20 billion in debt obligations over the next two years. He insisted he was "daydreaming" aloud and not really suggesting such a plan, but his comments helped topple the Bovespa and Brazil's currency on Friday.
Still, traders warned that neither Argentina nor Brazil is out of the woods yet, with Argentina set to auction debt on Tuesday.
"The debt sale is going to test the market, to test confidence," said Dotta Filho.
Brazil's real currency found room to strengthen on Monday, gaining to 1.938 reals per dollar from a 12-month-low close on Friday.
 Among other sterling performers on Monday was electricity company Cesp, which gained 6.4 percent to 19.15 reals. Cesp is expected to report earnings in coming days.
Despite the jump in some shares, trading volume was slim. Turnover was 348 million reals or $178 million. That compares with September's daily average of $296 million.
Elsewhere in South America, only the Chilean IGPA index saw similar gains, rising 1.14 percent to close at 4,885.46.
Other markets ended nearly flat: The Colombian IBB index closed down 0.16 percent at 710.39; the Peruvian IGRA index was down 0.44 percent to close at 1,245.05; and in Venezuela, the IBC index was down 0.64 percent to close at 6,457.93.
The Argentine MerVal index was closed for the "Bank Worker's Day" holiday.
Mexico stocks post gains
Mexican stocks managed a positive finish Monday, mainly on the back of late afternoon buying of Telmex shares.
"The market managed to move higher in the afternoon as we saw some buying in Telmex," said a local trader. "Otherwise it was a slow day as most foreign investors stayed out of the market ahead of the U.S. elections tomorrow."
Mexico's IPC index of 35 leading stocks finished up 40.330 points, or 0.64 percent, at 6,359.910 points as it see-sawed through out the session within a range of 80 points.
Volume was light at 72.5 million shares. Of 80 active shares, 31 rose, 33 fell and 16 were unchanged
In local market action, shares of bellwether stock Telefonos de Mexico (Telmex) led the list of most active shares, closing up 0.45 peso, or 1.80 percent, at 25.40 pesos per L share on volume of 24.5 million shares. Telmex's New York-listed American depositary receipts, or ADRs, were up 1.58 percent at $52.38.
Telmex is expected this week to kick off a road show for its recently spun-off America Movil unit, which groups its cellular and international holdings.
 The shares of Mexican industrial conglomerate Alfa were among the top losers for a second straight trading session, shedding 1.08 pesos, or 5.54 percent, to close at 18.42 pesos per A share on profit taking.
"Alfa's shares are up by 20 percent since early October so some investors decided to cash in some of their profits in the stock today," said a local trader.
"Alfa's shares ran up ahead of the company's annual meeting with analysts in Monterrey last Thursday on expectations that Alfa might be making an announcement regarding the divestiture of its Hylsamex unit," said Deutsche Bank analyst Jorge M. Beristain.
At its annual meeting with analysts last Thursday, Alfa said it would divest of none-core assets, focus on its most promising businesses like its auto parts division and is currently considering various strategic options for its Hylsamex unit.
"The recent sell-off in the stock may possibly be due to concerns among some investors over Alfa's foray into international markets like Canada and the Czech Republic," said the Deutsche Bank analyst.
Alfa said Monday its car parts unit Nemak will acquire two Canadian plants owned by U.S. carmaker Ford Motor Co. in exchange for Ford increasing its stake in Nemak to 25 percent from 20 percent.
Alfa recently announced its plans to build an auto parts plant in the Czech Republic.
"There might be a misunderstanding in the market regarding Alfa's international activities particularly the deal announced with Ford, which is in fact a pooling of assets and which in our view is going to be accretive to earnings," said Deutsche's Beristain.
Leading the losers were shares of Mexican homebuilder Consorcio Ara, which fell 7.46 percent, or 1.00 pesos, to close at 12.40 mostly due to large block trading in the stock said a local trader. Volume in ARA shares totaled 6.38 million shares.
Meanwhile, the 48-hour peso benchmark contract ended with a marginal loss of 0.0035 centavos against the dollar at 9.6425/9.6475 in a quiet session. Overnight rates on Cetes, or T-bills, ended 65 basis points firmer at 16.90 percent.
Toronto posts minor losses
Toronto stocks closed lightly lower Monday due to anxiety over U.S. company Cisco Systems' earnings and falling oil and gas shares.
The TSE 300 composite index closed down 6.22 points, at 9,714.18, with decliners beating advancers 550 to 515. Nearly 120.2 million shares worth C$3.04 billion (US$1.99 billion) changed hands during the day.
 Toronto technology stocks -- which have been on an up-and-down ride since both Lucent Technologies Inc. and Nortel Networks Corp. disappointed investors with earnings -- fell as investors decided to sell tech holdings to escape any adverse effects Cisco's earnings may have. Cisco reported its first-quarter financial results after the market close.
"There is a lot of concern about Cisco's earnings. Rather than risk major disappointment, people are saying it might be better to stay out of the market. And because it is a bellwether stock, Cisco will have an impact on other tech stocks," said Jeff Cheah, a strategist at Standard & Poor's MMS in Toronto.
Oil and gas shares ended lower despite crude oil prices closing modestly higher after news of export disruptions in Nigeria. Earlier during the day, crude oil prices were lower.
Heavyweight Suncor Energy was down 65 Canadian cents to C$30.50. Alberta Energy was down 75 Canadian cents to C$56.25.
Overall, nine of the 14 subindexes of the TSE 300 ended lower, with the industrial products sector, which includes Nortel and represents more than 40 percent of the index, down more 0.5 percent.
Nortel ended 30 Canadian cents lower at C$68.25. Other high-flying tech stocks, such as JDS Uniphase Corp. and Sierra Wireless also ended lower.
The bank-heavy financial services sector ended up 0.94 percent as it made broad gains after news that C. I. Fund Management Inc. had made a bid for all the outstanding shares of Mackenzie Financial Corp. for C$3.9 billion.
 Shares of Mackenzie ended up C$6.30 at C$28.25. C.I. Fund shares were down 90 Canadian cents to C$15.70.
Telecommunications holding company BCE Inc., which has risen more than 20 percent in the past two weeks, was up 60 Canadian cents to C$42.95 at close.
The metals and mining sector was up nearly 0.7 percent, as Alcan Aluminium gained 70 Canadian cents to close at C$48.60.
-- from staff and wire reports 
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