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CA-BUSINESS Summary

19/11/08

TSX drops sharply as banks feel heat

TORONTO (Reuters) - Toronto Stock Exchange's main index sank 4 percent on Wednesday in a broad selloff led by key resource and financials issues on gloomy news from the banking sector. The S&P/TSX composite index <.GSPTSE> unofficially closed down 367.75 points, or 4.16 percent, at 8,467.98.

Ottawa promises to support auto sector

OTTAWA (Reuters) - Canada's Conservative government pledged on Wednesday to provide new support to the ailing automotive sector, in its most explicit promise of emergency aid yet. "The Canadian manufacturing sector, particularly the automotive and aerospace industries, has been under increasing strain. Our government will provide further support for these industries," the government said in a major policy speech to mark the start of a new session of Parliament.

MDS break-up has "tremendous upside": analyst

TORONTO (Reuters) - Shareholders are stepping up the pressure for Canadian healthcare company MDS Inc to split into three separate companies, a CIBC World Markets analyst said on Wednesday. Maxime Paris said the break-up of MDS into its three main divisions makes sense, noting the sum of its parts would be worth more than if the company remained together.

Scotiabank's fourth-quarter warning puts heat on banks

TORONTO (Reuters) - Shares of Bank of Montreal , Bank of Nova Scotia and Canadian Imperial Bank of Commerce led Canadian banking stocks lower on Wednesday morning as analysts said big securities-related writedowns loom in their upcoming quarterly reports. After markets closed on Tuesday, Bank of Nova Scotia said it would take a hit of C$890 million ($718 million) before tax in its fourth quarter on trading losses tied to bankrupt Lehman Brothers Holdings , as well as lower securities and derivatives valuations. The charges are expected to be C$595 million after tax, or 60 Canadian cents a share.

Loonie dives below 80 U.S. cents

TORONTO (Reuters) - The Canadian dollar closed below 80 U.S. cents for the first time since October 28 on Wednesday as stock markets tumbled, prompting nervous U.S. investors to bring funds home, benefiting the U.S. dollar. Canadian bond prices rallied as a variety of factors pointed to a weaker economy, fueling a safe-haven bid for relatively secure government debt.

Canada says budget stimulus not to come next week

OTTAWA (Reuters) - Finance Minister Jim Flaherty said on Wednesday he would not put stimulus measures in the fall economic and fiscal update he will unveil next week. He said he would look at more stimulus "as we go up to budget time." The budget is normally put out in February or March.

Microsoft rules out buying Yahoo but likes search deal

NEW YORK (Reuters) - Microsoft Corp Chief Executive Steve Ballmer ruled out an acquisition of Yahoo Inc on Wednesday but said his company was interested in resuming talks on a Web search partnership. Yahoo shares fell 19 percent on the remarks, after gaining this week on renewed investor hopes that Microsoft may refresh its bid for the Internet company after Yahoo Chief Executive Jerry Yang announced that he would step down.

Oil falls to 22-month low on demand, stock build

NEW YORK (Reuters) - Oil prices dropped to 22-month lows on Wednesday as U.S. inventories rose and demand weakened due to the global economic slowdown. U.S. crude settled down 77 cents at $53.62 a barrel, the lowest settle since January 22, 2007. Earlier, prices had risen slightly on forecasts for colder weather in the United States.

Bank of Canada chief sees recession risk growing

LONDON (Reuters) - The Bank of Canada sees a greater risk of recession in Canada than it did just one month ago as the global financial crisis rips through the economy, Governor Mark Carney said on Wednesday. In a speech in London, Carney repeated that the central bank would likely have to cut its benchmark interest rate further to keep the export-reliant economy afloat in the face of a global recession and what he called a "consumer recession" in the United States, Canada's top trading partner.

Auto execs testify as legislators try for deal

WASHINGTON (Reuters) - U.S. auto executives went to Capitol Hill for a second day on Wednesday to argue their case for $25 billion in aid as legislators proposed changes to help a bailout pass Congressional and White House muster. The day's hearings, before the House Financial Services Committee, got off to a rousing start when panel Chairman Barney Frank asked how the government could justify a bailout for banks and insurers, but not the automakers.

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