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Reuters Canada Business Summary

31/10/07

Fed cuts rates by quarter point

WASHINGTON (Reuters) - The Federal Reserve cut interest rates on Wednesday, but said the risk of inflation was roughly equal to downside risks to growth, suggesting further rate reductions are far from a sure bet. The decision by the central bank's Federal Open Market Committee to lower the overnight federal funds rate by a quarter-percentage point to 4.5 percent was widely expected in financial markets.

Toronto stocks soar 200 pts on tax cuts, Fed

TORONTO (Reuters) - The Toronto Stock Exchange's main index jumped 200 points on Wednesday in a broad-based surge, buoyed by Ottawa's promise on Tuesday to slash corporate and personal taxes and Wednesday's interest rate cut by the U.S. Federal Reserve. The S&P/TSX composite index <.GSPTSE> was up 201.10 points, or 1.4 percent, at 14,513.18.

Oil jumps more than 4 percent to record past $94

NEW YORK (Reuters) - Oil surged more than 4 percent to a record over $94 a barrel on Wednesday after a steep drop in U.S. inventories fueled winter supply concerns and the U.S. Federal Reserve cut interest rates. U.S. oil settled up $4.15 to $94.53 a barrel after striking a record $94.74 earlier, countering a $4 drop on Tuesday. London Brent gained $3.19 to $90.63 a barrel.

Penn West adds heft with Canetic deal

CALGARY, Alberta (Reuters) - Penn West Energy Trust agreed on Wednesday to buy Canetic Resources Trust in a deal worth C$3.6 billion ($3.8 billion), solidifying its position as Canada's No. 2 trust and adding heft for yet more acquisitions Exactly one year after Ottawa shocked the trust sector by scrapping the tax advantages the investment vehicles had enjoyed, Penn West said it will offer 0.515 of its units for each Canetic unit.

TSX Group profit jumps 29 percent

TORONTO (Reuters) - Third-quarter profit jumped 29 percent at TSX Group Inc , the Canadian stock market operator, said on Wednesday as revenue rose in its issuer services, trading and market data businesses. The company, which runs the Toronto Stock Exchange and the TSX Venture Exchange, said net income was C$42.7 million ($44.9 million), or 62 Canadian cents a share, in the three months ended September 30. That was up from C$33.2 million, or 48 Canadian cents a share, in the same 2006 period.

Ford and UAW resume talks on contract

DETROIT (Reuters) - Ford Motor Co and the United Auto Workers resumed high-level contract talks on Wednesday, as the embattled automaker held out the prospect that it might close fewer U.S. plants in exchange for a cost-saving agreement with its major union. Ford, which has said it will close 16 North American factories as part of its restructuring, has so far identified only 10 of those facilities. Ford has 33 UAW-represented factories in the United States.

Canada dollar little changed after Fed rate cut

TORONTO (Reuters) - The Canadian dollar was little changed against the U.S. dollar on Wednesday afternoon after initially dropping when the U.S. Federal Reserve cut its key fed funds rate by 25 basis points. At 2:23 p.m., the Canadian dollar was at US$1.0512, making a U.S. dollar worth 95.13 Canadian cents. Earlier in the day, the Canadian dollar hit its highest level versus the greenback in 47 years.

Canada economy grew 0.2 percent in August

OTTAWA (Reuters) - Canada's economy grew by a stronger-than-expected 0.2 percent in August, led by strong growth in retail trade and crude oil production while utilities declined and manufacturing stagnated, Statistics Canada said on Wednesday. The result topped analysts' median forecast of a 0.1 percent expansion in gross domestic product for August but was in line with the average pace of growth so far in 2007. Both goods and services industries expanded by 0.2 percent.

Kraft profit hit by dairy prices

CHICAGO (Reuters) - Kraft Foods Inc posted a 20 percent drop in quarterly profit on Wednesday, hit by soaring dairy costs, though sales and earnings still beat analysts' estimates as increased spending on marketing and new products started to pay off. The company said profit was $596 million, or 38 cents a share, in the third quarter, compared with $748 million, or 45 cents a share, a year earlier.

Horizon oil sands project said over budget

TORONTO (Reuters) - Canadian Natural Resources Ltd expects the cost of its Horizon oil sands project to jump as high as C$7.75 billion ($8.2 billion), nearly C$1 billion over budget, as some work gets pushed out into winter, the country's No. 2 independent producer said on Wednesday. Canadian Natural said costs could be 8 percent to 14 percent above the C$6.8 billion it had estimated for the first phase of the northern Alberta mining and synthetic crude processing development, the country's fourth such project.

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