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Reuters Canada Business Summary

02/07/08

Auto sales hit 15-year low

DETROIT (Reuters) - U.S. auto sales plunged in June to a 15-year low, but a month-end clearance sale helped General Motors Corp retain its No. 1 spot and steer clear of the wipeout many had feared, sending its shares higher. Record gas prices and declining trade-in values for big trucks and SUVs hit truck sales hard while major automakers, including Toyota Motor Corp <7203.T>, struggled to keep up with demand for some popular smaller cars and hybrids.

Flaherty cautious on economy: report

TORONTO (Reuters) - Canadian Finance Minister Jim Flaherty said he was concerned that economic weakness in the United States, his country's top trading partner, could hold back the domestic economy in the coming months, a news service reported on Tuesday. Flaherty said he welcomed Monday's stronger-than-expected report on April gross domestic product, which showed Canada's economy had expanded for the first time in three months.

Nikkei hits longest losing streak in 43 years

TOKYO (Reuters) - The Nikkei average fell 1.3 percent on Wednesday to hit its longest losing streak in more than 40 years, as worries about the global economy hit exporters such as Canon Inc <7751.T>. Shipping firms extended losses after freight charges on the Baltic Dry Index dropped over 2 percent and on worries that high oil prices would hurt demand from emerging markets.

U.S. wins court order for UBS Swiss bank records

WASHINGTON (Reuters) - A federal judge in Miami has authorized U.S. officials to seek information from UBS AG about U.S. taxpayers suspected of using Swiss bank accounts to evade income taxes, part of a probe that could crack open Switzerland's tradition of bank secrecy. The order issued on Tuesday gives the Internal Revenue Service permission to serve a summons on Zurich-based UBS to obtain information about possible fraud by people whose identities are unknown.

Oil firmer on supply concerns, weak dollar

LONDON (Reuters) - Oil rose towards $142 a barrel on Wednesday, within sight of a record high, boosted by forecasts that global supply will lag demand and further weakness in the dollar. The International Energy Agency on Tuesday cut its global oil supply forecast for the next five years, giving a further lift to prices already supported by tension between Iran and Israel.

Soaring prices push economies to tipping point: IMF

WASHINGTON (Reuters) - Surging food and fuel prices have pushed some countries to a "tipping point," the head of the International Monetary Fund warned on Tuesday, threatening hard-won efforts in many African countries to stabilize their economies. "If food prices rise further and oil prices just stay the same, then some governments will be unable to feed people and at the same time maintain stability in their economy," said Dominique Strauss-Kahn, managing director of the IMF.

CIT to shed $10 billion mortgage assets

NEW YORK (Reuters) - CIT Group Inc said on Tuesday it agreed to sell nearly $10 billion of mortgage assets, in a deal that removes problem loans from the commercial lender's balance sheet, lifting its shares 18 percent. However, broader questions remain about how the company will finance its operations as borrowing in the bond markets becomes increasingly difficult, analysts said.

Babcock to maintain Canada's submarine fleet

LONDON (Reuters) - British engineering support services company Babcock International Group Plc won a five-year contract to maintain four Victoria class submarines for Canada, which has an option to extend the deal to 15 years. Babcock said in a statement on Tuesday the initial contract was worth C$250 million ($245 million) to the company, and up to C$1.5 billion if the deal ran for 15 years.

Real, not speculative reasons for record oil: IEA

LONDON (Reuters) - It is easy to blame speculation for the doubling of oil prices over the past 12 months, but the real reasons are strong demand growth, coupled with shortages of supply and refining capacity, the IEA said on Tuesday. In its Medium-Term Oil Market Report, the International Energy Agency (IEA) said there was little evidence speculation had distorted prices over both the longer and shorter term, although it noted a lack of data on inventory levels, as well as on financial market participants.

Chrysler St. Louis cut seen good for Canada plant

TORONTO (Reuters) - Chrysler LLC's decision to shut down its St. Louis minivan plant is good news for the company's van plant in Windsor, Ontario, although it underscores the long-term uncertainty of the van segment, an analyst said on Monday. "I think for now the production there is safe," said Aaron Bragman, an automotive analyst at Global Insight, of the Windsor plant, which currently runs three shifts producing the industry-leading Town & Country and Dodge Grand Caravan minivan models.

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