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CA-BUSINESS Summary

07/10/08

Toronto stock index drops below 10,000, oil leads

TORONTO (Reuters) - The Toronto Stock Exchange's main index dropped nearly 4 percent on Tuesday to end below the key 10,000 level for the first time in three years as fears that the credit crisis could balloon to a global recession prompted broad selling. Energy stocks gave up early gains to lead the way downward, despite oil prices that eked higher on the day, a move that some saw as a sign that equity investors believe a global recession that will sap demand for commodities is all but inevitable.

Fed steps in but stocks dive; UK to rescue banks

NEW YORK/WASHINGTON (Reuters) - The U.S. Federal Reserve stepped forward as a commercial lender of last resort and signaled a readiness to cut interest rates as stocks spun lower for a fifth straight day and pressure mounted for a coordinated, international response to the most dangerous financial shock since the Great Depression. Financial shares tumbled, led by Bank of America Corp , a day after the largest U.S. bank said it would sell $10 billion in new stock and stoked fears that other banks may also need to raise capital.

Alcoa third-quarter net down; cutting back spending

NEW YORK (Reuters) - Aluminum producer Alcoa Inc said it was halting major capital projects in the face of uncertain markets, after it posted a lower-than-expected quarterly profit on softer demand in key sectors like the aerospace and auto industries. Alcoa, among the first major U.S. companies to post third-quarter results as the credit crisis spreads, said the sharp decline in metal prices and falling demand are forcing it to stop "all non-critical capital projects" and make targeted reductions to match market conditions.

Bernanke signals readiness to cut rates

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday signaled a readiness to lower U.S. interest rates in a dramatic shift to support an economy battered by a financial crisis of "historic dimension." Recent economic data and financial developments show the outlook for growth has worsened, Bernanke told the National Association for Business Economics. The outlook for inflation, while still uncertain, has improved somewhat as oil and other commodity prices have eased, he added.

Asia stocks drop for 5th day on unending crisis

HONG KONG (Reuters) - Asian stocks fell about 4 percent, down for a fifth consecutive day, and government bond prices rose on Wednesday as fears of a looming global recession grew with no sign of a coordinated response or an end to the worsening financial meltdown. The yen climbed as investors clung to anything resembling stability after Federal Reserve Chairman Ben Bernanke warned turmoil in markets could cause U.S. economic activity to be subdued into 2009 and signaled a readiness to cut interest rates.

Wells could win 75-80 percent of Wachovia deposits: source

NEW YORK (Reuters) - Wells Fargo & Co is likely to get about 75 to 80 percent of Wachovia Corp's deposits, while Citigroup Inc would get the remainder, a person briefed on the matter said on Tuesday. The situation is in flux and the outcome is still unclear, the person cautioned, adding Wells Fargo may end up with 100 percent of Wachovia's deposits, and Citigroup with none.

Enbridge says unworried by bitumen plan, credit

CALGARY/TORONTO (Reuters) - The head of Enbridge Inc said on Tuesday that a campaign pledge by Canada's Conservative government to halt exports of tar-like bitumen to countries with lax emission rules is no threat to its planned C$4.2 billion ($3.8 billion) pipeline to the Pacific Coast. Chief Executive Pat Daniel, in Toronto for a meeting with investors, said the campaign pledge, announced by Prime Minister Stephen Harper last month, had blindsided the company, which is the biggest shipper of bitumen, a tar-like form of oil, from the Alberta oil sands.

Oil back below $90 on demand worries

SINGAPORE (Reuters) - Oil prices retreated below $90 a barrel on Wednesday as concerns the global financial crisis will crimp demand for fuels overshadowed signs that producer group OPEC was considering a supply cut. The worst financial crisis since the Great Depression has heightened gloom about the global economy and weakened the outlook for oil demand, sending prices spiraling down nearly $60 since July.

UK poised to unveil bank rescue plan: report

LONDON (Reuters) - Britain's government is poised to announce a "comprehensive" rescue package for the banking system, the BBC reported on Tuesday, including the possibility of injecting capital into banks. "It will be big, it is the government's attempt to stabilize the banking system," BBC economics correspondent Robert Peston reported. "The Treasury has been working on the plan for weeks."

Bank of Canada opts out of coordinated U.S. dollar actions

TORONTO (Reuters) - The Bank of Canada said on Tuesday it will not participate in coordinated central bank actions aimed at increasing U.S. dollar liquidity. The central bank said it welcomes central bank initiatives to provide U.S. dollar liquidity but felt it was not necessary for it to participate in the auctions at this time.

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