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CA-BUSINESS Summary

06/10/08

Toronto stocks mark biggest drop since October '87

TORONTO (Reuters) - The Toronto Stock Exchange's main index tumbled more than 1,100 points and more than 10 percent on Monday morning, its biggest percentage drop since October 1987. Energy stocks led the retreat as oil prices tumbled on concerns about fallout from the global credit crisis.

Economy to stall out by next summer: Scotiabank

TORONTO (Reuters) - There will be little, if any growth in the Canadian economy until the end of next summer and that will pave the way for lower interest rates, a leading Canadian economist said on Monday. Scotiabank Chief Economist Warren Jestin, speaking at an event along with other economists from Canadian banks, said financial problems will continue to radiate out of the United States and add stress to other economies.

Oil falls to 8-month low below $90 a barrel

LONDON (Reuters) - Oil was near $90 a barrel on Monday after falling to its lowest in eight months earlier in the session, pressured by expectations the global credit crisis will bring a sharp drop in oil demand. U.S. light crude for November delivery fell by $3.84 a barrel to $90.04 by 10:24 a.m. EDT, its fourth day of losses.

Construction industry retreats in August

OTTAWA (Reuters) - The Canadian construction industry pulled in its horns by more than expected in August, as the value of building permits fell by 13.5 percent from July, according to Statistics Canada date released on Monday. The nonresidential sector fell 19.3 percent after double-digit increases in April and May, while the residential sector dropped by 9.3 percent, after a 4.0 percent rise in July.

Purchasing activity quickens in September

TORONTO (Reuters) - Purchasing activity in the Canadian economy expanded in September, and at a faster pace than the previous month, according to the Ivey Purchasing Managers Index released on Monday. The index, the joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business, rose to 61.0 in September from 51.5 in August.

Scotia buys C$2.3 billion CI stake from Sun Life

TORONTO (Reuters) - Bank of Nova Scotia said on Monday it will buy Sun Life Financial's stake in fund manager CI Financial for C$2.3 billion, giving the bank a coveted boost in the wealth management area and providing Sun Life with funds to go after acquisitions. The cash deal for 104.6 million CI units at C$22 per unit will make Scotiabank the biggest shareholder in the country's third-largest mutual fund company, with a 37.6 percent ownership stake. It will immediately increase Scotiabank's profit, executives said.

Dollar at weakest vs greenback in 1-1/2 years

TORONTO (Reuters) - The Canadian dollar fell to its weakest since May 2007 against a rallying U.S. dollar on Monday, as concerns about the global financial crisis put a bid to the greenback and undercut commodity prices. Bond prices rose as investors looked for a safe place to park their cash as equity markets tumbled.

Connacher shelves Montana refinery expansion

CALGARY, Alberta (Reuters) - Connacher Oil & Gas Ltd said on Monday it is shelving a planned expansion of its Montana refinery in order to concentrate on boosting output from its Canadian oil sands holdings. Connacher, one of the smallest oil sands producers, has abandoned a scheme to raise capacity at its Great Falls, Montana, refinery to 35,000 barrels per day from 9,500.

TransAlta says Mexico asset sale still on track

CALGARY, Alberta (Reuters) - TransAlta Corp said on Monday it still expects to sell its Mexican power operations for $303.5 million and direct most of the cash to repurchasing its shares. Steve Snyder, chief executive of Canada's biggest investor-owned power producer, said in a presentation that he remains confident the sale of the two plants will be completed on the terms first disclosed in February.

EU pledges crisis action as U.S. urges coordination

LONDON/WASHINGTON (Reuters) - The European Union pledged on Monday to protect people's savings and maintain financial stability while Washington urged a more coordinated approach to the worst banking crisis in nearly 80 years. Amid criticism of a fragmented EU response, French President Nicolas Sarkozy issued a statement from the 27 member states saying individual countries would do all they could to safeguard the financial system.

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