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CA-BUSINESS Summary

13/10/08

Global bank rescue aims to halt crisis; markets up

NEW YORK (Reuters) - The world bet solidly on recapitalizing ailing banks as the fastest way out of the financial crisis, sending stock markets higher after their worst week in history. Britain, Germany, France and other European countries announced multibillion-dollar plans to guarantee banks and take equity stakes, while U.S. officials said they were finalizing a similar plan.

Manulife expects C$250 million charge on credit losses

TORONTO (Reuters) - Manulife Financial Corp, Canada's largest insurer, said on Monday it expects credit losses related to the global financial crisis to reduce earnings by about C$250 million in the third quarter. Manulife's shares, trading in New York on a market holiday in Canada, jumped about 10 percent, as government efforts to pump funds into banks triggered a rally on Wall Street after the global stock markets suffered their biggest weekly decline ever.

Global stocks in record surge after Europe action

NEW YORK (Reuters) - Global stocks soared in their biggest one-day advance in at least 20 years on Monday while oil prices jumped after European governments took bold steps to restore market confidence and avert a worldwide recession. U.S. stocks were headed for their biggest percentage gain in a single day since two days after the Black Monday crash of October 1987, and the FTSEurofirst 300 <.FTEU3> index of top European shares surged by a record 10 percent.

Morgan Stanley closes MUFG deal, Morgan shares soar

NEW YORK (Reuters) - Mitsubishi UFJ Financial Group Inc (MUFG) <8306.T> completed its $9 billion investment in Morgan Stanley on Monday as U.S. government support helped nail down a critical deal many investors had feared could fall apart. Morgan Stanley shares soared more than 75 percent after Japan's largest bank bought a 21 percent stake one day earlier than expected. Last week the New York bank's stock plunged by more than half amid fears that Morgan, forced to wait five days before completing the deal, might not survive the crisis.

GM shares jump, Chrysler in talks with others

DETROIT (Reuters) - General Motors Corp shares surged as much as 64 percent on Monday on signs that the No. 1 U.S. automaker had explored options ranging from a merger with Ford Motor Co or Chrysler to federal funding in order to ride out a brutal downturn in sales. Chrysler LLC Chief Executive Bob Nardelli said the automaker was talking with third parties to explore tie-ups amid a global credit crunch that he said presented a more serious challenge than high gasoline prices.

Oil jumps 4 percent, bank plan spurs global rally

NEW YORK (Reuters) - Oil prices rose more than 4 percent on Monday as global markets rallied after governments launched bailout schemes to shore up banks. Britain, Germany, France, Italy and other European governments all announced rescue packages to stave off the global financial crisis, while U.S. Treasury Secretary Henry Paulson said Washington was developing plans to buy equity in financial institutions.

European nations unveil crucial bank rescues

BERLIN/PARIS (Reuters) - Germany, France and Britain announced massive financial rescues on Monday as governments across Europe stepped in to shield banks and restore confidence in the face of the worst financial crisis in nearly 80 years. German Chancellor Angela Merkel presented a rescue package that will provide 400 billion euros ($543.4 billion) in bank guarantees and a further 100 billion euros in state funds to recapitalize banks.

Election? What election?

TORONTO (Reuters) - (Reuters) - Bay Street, riveted by the sight of plunging markets and economies teetering on the edge of recession, has been paying precious little attention to the campaign leading to Canada's general election on Tuesday. "I don't think investors are really at all focused on the fact there is a Canadian election and what any potential policy change that may bring," said George Vasic, equity strategist at UBS Securities Canada. "Concerns are far greater than that in terms of the global financial crisis."

Exploring the worst-case scenario

WASHINGTON (Reuters) - The global economy is drawing closer to a dangerous downward spiral and time may be running out for world leaders to find a way to stop it before it inflicts lasting damage. Economists are beginning to warn of a depression-like cycle where an inability to obtain credit stalls growth, triggering more defaults and still tighter lending terms. Governments have unveiled one unprecedented move after another in the past three weeks to boost confidence and get banks back in business, yet so far nothing has been able to arrest the fall.

Sarkozy, Merkel prepare European crisis plan

COLOMBEY-LES-DEUX-EGLISES, France (Reuters) - French President Nicolas Sarkozy and German Chancellor Angela Merkel paved the way on Saturday for European measures to tackle the global financial crisis but revealed little about their plans. Sarkozy, whose country holds the rotating six-month presidency of the European Union, has called an emergency meeting on Sunday of the 15 countries that have the euro as their currency, with a view to taking steps to stop the rot.

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