THE CANADIAN PRESS
Overseas stock markets are mixed but Wall Street index futures point to a modestly optimistic open amid indications Congress will approve a US$15-billion bailout of the Detroit-based automakers.
Prices for crude oil and other commodities are higher, but a gloomy day dawns over Bay Street with more bad news from the mining sector and health-sciences company MDS Inc.
Rio Tinto Group is cutting 14,000 jobs worldwide and reducing capital spending, with Canada taking an as-yet unspecified proportion of the cutback. The London-based global miner, afflicted by weak metal prices and weighed down by debt from last year's US$38-billion acquisition of Alcan, says the scale of its cuts looks dramatic but it expects similar moves across the industry.
MDS disclosed its revenue and operating profit are below previous guidance, and it is taking a US$260-million tax writeoff of the MAPLE medical-isotope reactor, along with a goodwill writedown of as much as $370 million at its MDS Pharma Services division.
The Canadian dollar opened at 79.53 cents US, up 0.45 cent after losing 0.66 cent yesterday as the Bank of Canada cut its policy interest rate by three-quarters of a percentage point while declaring the country is "entering a recession."
Crude oil is up $2.25 at US$44.32 a barrel on the New York Mercantile Exchange, as traders look ahead to an expected production-quota cut next week by the Organization of Petroleum Exporting Countries. Gold gained $16.90 to US$791.10 an ounce and copper was up two cents to US$1.4635 a pound.
U.S. stock futures moved higher as lawmakers agreed in principle to speed loans to the struggling carmakers, in an effort to preserve jobs and prop up the economy. However, resistance to the bailout remains, especially from laissez-faire Republicans.
In Canada, Prime Minister Stephen Harper said there will be no blank cheque for automakers and he wants to see the U.S. aid package before acting on the Detroit Three's plea for billions of dollars in help from Ottawa.
New York's Dow Jones industrial average lost 243 points yesterday after a 298-point gain on Monday. Toronto's S&P/TSX fell 170 points yesterday after starting the week with a 450-point rise.
Overseas, Hong Kong's Hang Seng index closed up 5.6 per cent while Japan's Nikkei 225 added 3.2 per cent.
European bourses were shaky as traders cashed in on two days of solid gains. The FTSE-100 was down 0.1 per cent early in the afternoon in London, while Germany's DAX was down 0.5 per cent and the French CAC-40 was flat.
French stocks were hurt by a 2.7 per cent one-month drop in industrial output in October, pulled down by the car industry.
