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CA-BUSINESS Summary

09/01/09

Canada economy sheds more jobs in December

OTTAWA (Reuters) - Canadian employers cut more jobs than expected in December for the second straight month and the unemployment rate jumped to its highest since January 2006 in a sign that the economy has likely slipped into a recession. Statistics Canada said 70,700 full-time workers were taken off payrolls in the month, partially offset by a gain of 36,200 part-time workers for a net employment loss of 34,400.

TSX gets modest boost at open after U.S. jobs data

TORONTO (Reuters) - Toronto's main stock index rose slightly at the open on Friday as investors snapped up riskier assets following key jobs data in the United States that showed employers cut payrolls in December by less than expected. The S&P/TSX composite index <.GSPTSE> was up 17.21 points, or 0.19 percent, at 9,238.79 at the open. Nine of the index's 10 subindexes were higher with the materials group the only group in negative territory.

Flaherty sees "substantial" deficit

WHITBY, Ontario (Reuters) - Canada will run a "substantial" budget deficit in the next fiscal year as it enacts stimulus measures to help shelter the economy from the effects of the global economic downturn, Finance Minister Jim Flaherty said on Thursday. Flaherty said it was going to be a difficult year globally and that Canada would not escape unharmed as its biggest trading partner, the United States, was in a "serious recession."

Canada November building permits fall to 21-month low

OTTAWA (Reuters) - The value of Canadian building permits tumbled 11.8 percent in November from October to a 21-month low, Statistics Canada said on Friday, adding to evidence that the economy began contracting in late 2008. Analysts in a Reuters survey had expected a 5 percent decline in building permits, which are an early indication of construction activity. Earlier on Friday, Statscan reported the construction sector lost 44,300 jobs in December.

Oil slips below $41 after U.S. unemployment data

LONDON (Reuters) - Oil prices slipped below $41 a barrel on Friday as data showing a big rise in U.S. unemployment deepened gloom over the outlook for the world's biggest oil consumer. U.S. employers slashed payrolls by 524,000 in December, driving the national unemployment rate to its highest level in almost 16 years, a government report showed on Friday, suggesting the year-long recession was deepening.

Bank of Canada hints at more rate cuts to come

TORONTO (Reuters) - The Bank of Canada hinted on Thursday that it would continue to lower interest rates this year but gave no indication of how deep the cuts would be as the global recession hits the Canadian economy. Deputy Governor Pierre Duguay said the bank continued to monitor developments in world markets to decide its next moves, amid market expectations of a rate cut on January 20.

Palm's new phone and operating system ignite shares

LAS VEGAS (Reuters) - Palm Inc overhauled its mobile operating system and introduced a new touch-screen phone, sending its shares soaring 35 percent as investors hoped the moves can help win back customers from rivals such as Apple Inc . The new products, which impressed analysts at the Consumer Electronics Show in Las Vegas on Thursday, were developed under the watch of former Apple executive Jon Rubenstein, who helped create the iPod and who was brought to Palm by its private equity shareholder, Elevation Partners.

Manulife knocks down report of accounting probe

TORONTO (Reuters) - Canadian insurance giant Manulife Financial forcefully rejected on Thursday a recent news report that U.S. state regulators were investigating its accounting practices. The company said in a press release that it has not been advised by any regulators -- and has no reason to believe -- that any of its accounting practices are being investigated.

Lehman deal on private equity close: source

NEW YORK (Reuters) - Lehman Brothers Holdings Inc has reached an agreement in principle to sell its merchant banking business, made up of two private equity funds, to management of the funds, a source familiar with the situation said on Thursday. The business to be spun out would also take in new investment from South African billionaire Johann Rupert, the source said. Lehman's bankruptcy estate will retain a substantial interest in the funds, the source said.

South Korean auto makers take credit crisis action

TOKYO/SEOUL (Reuters) - Two South Korean auto makers on Friday joined the industry line up of companies suffering in the global financial crisis, with Hyundai Motor Co <005380.KS> slashing output and Ssangyong <003620.KS> filing for bankruptcy protection. Auto makers worldwide are suffering as consumer demand for vehicles plunges in the worst economic downturn since the Great Depression, which is expected to last well into 2009.

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