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Reuters Canada Business Summary

29/08/08

Canada skirts recession in second quarter

OTTAWA (Reuters) - Canada's economy narrowly avoided a recession in the second quarter but the tepid 0.3 percent annual growth rate raised doubts about whether the Bank of Canada would leave interest rates on hold next week. Gross domestic product shrank 0.8 percent in the first quarter, revised from the original estimate of a decline of 0.3 percent, as global demand waned for exports such as autos, forest products and machinery, Statistics Canada said on Friday.

BCE and Telus to announce wireless pact: report

OTTAWA (Reuters) - BCE Inc , Canada's biggest telecom company, and Telus Corp , the country's No. 2 phone company, will share the cost of a next-generation wireless network upgrade, the Financial Post newspaper said on Friday. The paper said that BCE and Telus are expected to announce next week an upgrade to high speed packet access networks, estimated to cost as much as C$1 billion ($1.05 billion).

Retreating financials lead TSX lower

TORONTO (Reuters) - The Toronto Stock Exchange's main index fell on Friday morning, tugged lower by technology and financial issues amid thin trading ahead of the Labour Day long weekend. The heavily weighted financial sector slipped 0.6 percent after logging big gains this week -- 4.2 percent on Thursday and 2.5 percent on Wednesday -- on the back of quarterly results from some of Canada's Big Six banks.

Wal-Mart Canada cuts staple food prices in Ontario

OTTAWA (Reuters) - Wal-Mart Stores Inc said on Friday it is cutting prices on bread, milk, butter and eggs in its Ontario stores as part of a wider campaign of reductions to help shoppers in a tough economy. Wal-Mart Canada cut hundreds of prices on goods in August and plans to reduce hundreds more in September.

Markets no longer unanimous on steady Canada rates

OTTAWA (Reuters) - At least one major Canadian player departed from the previously unanimous view that the Bank of Canada would keep interest rates on hold, in light of weak gross domestic product numbers. Scotia Capital Inc. said on Friday it was pure semantics to look at the fact that Canada had avoided a technical recession because the fact was it had lost its resilience and needed policy stimulus. The economy grew at an annualized 0.3 percent in the second quarter after shrinking by 0.8 percent in the first.

GM recalls 857,735 vehicles for electrical problems

DETROIT (Reuters) - General Motors Corp is recalling 857,735 vehicles equipped with a heated windshield wiper fluid system for a potential short-circuit problem, according to federal safety regulators. A short-circuit in the system may cause other electrical features to malfunction, create an odor or cause smoke, increasing the risk of a fire, the National Highway Traffic Safety Administration said on its website.

Oil rises to $117 on storm threat to U.S. output

LONDON (Reuters) - Oil rose by more than $1 to above $117 a barrel on Friday, as Tropical Storm Gustav was poised to enter the Gulf of Mexico, raising concerns about its impact on U.S. offshore oil and gas output. Energy companies braced for Gustav, shutting down production and evacuating personnel from offshore rigs. The U.S. Gulf of Mexico is home to a quarter of U.S. crude oil production and 15 percent of its natural gas output.

Google to go ahead with Yahoo deal: report

(Reuters) - Google Inc. , facing a U.S. Justice Department probe of its search-advertising partnership with Yahoo Inc. , will proceed with the agreement by early October, Bloomberg said. "We are going to move forward," Google Chief Executive Eric Schmidt said in an interview with Bloomberg Television on Thursday in Denver.

Loonie eases on sluggish GDP growth

TORONTO (Reuters) - The Canadian dollar slipped 0.3 percent versus the U.S. dollar on Friday, as Canada's economy showed razor-thin growth in the second quarter, thus avoiding a technical recession but suggesting an economy in stagnation. Domestic bond prices weakened, as the slower growth was not enough to convince the market that the Bank of Canada will cut interest rates next week.

Microsoft to buy ciao.com price comparison firm

LONDON (Reuters) - Microsoft has agreed to buy Greenfield Online , owner of European price comparison website ciao.com, for about $486 million to boost its Internet search and e-commerce business in Europe. Microsoft, whose $47.5 billion bid to buy Yahoo earlier this year failed after a protracted battle, said on Friday the acquisition should benefit its Live Search platform.

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