The S&P/TSX composite index ended lower today -- down 97.19 points to 11,803.35 -- as investors took in a dismal US employment report and brushed off positive news from the banking sector and a vote by the House of Representatives to approve the Treasury Department's $700 billion bailout package.
Canadian Imperial Bank of Commerce is reducing its exposure to the U.S. residential mortgage market by selling part of its structured credit portfolio to Cerberus Capital Management LP in a US$1.05-billion deal.
The deal announced Friday after ''a competitive bidding process'' covers residential mortgage-backed securities and related collateralized debt obligations valued at US$1.19 billion at June 30 and $1.075 billion a month later.
The Bank of Nova Scotia has completed a domestic offering of $950 million of 10-year debentures paying 6 percent interest. The debt issue is ''part of Scotiabank's ongoing and proactive management of its capital structure,'' the bank said Friday.
In other news -- a subsidiary of Montreal-based SNC-Lavalin Inc. has launched a $21-million lawsuit against Altius Minerals Corp., alleging it hasn't been paid for work on a proposed $4.6-billion oil refinery in Newfoundland.
As for economic data -- the Department of Labor reported that the September unemployment rate remained at 6.1 percent, the same rate as in August and nonfarm payrolls decreased by 159,000, the largest drop since March 2003 and twice the decline feared by economists. The average work week declined to 33.6 hours from 33.7 in August.
The dismal employment numbers were spurring speculation that the Fed would soon cut its target interest rate. Futures markets were pricing in 100 percent odds of a rate cut before the Fed's next meeting on Oct. 29.
In other economic news -- the Institute for Supply Management's reading on the services sector of the economy fell to 50.2 in September from 50.6 in August, topping forecasts for a drop to 50.0.
The Canadian dollar, meanwhile, lost 0.20 cent to 92.46 cents US, down more than four cents this week.
BAYSTREET
Three of the TSX sub-groups traded higher today -- gold stocks were up 4.13 percent followed by a 1.94 percent rise in material issues and a 0.44 percent gain in telecdom stocks.
Gold futures swung between gains and losses, but the contract for December delivery ended down $11.1, or 1.3 percent, at $833.2 US an ounce.
On the downside -- real-estate stocks were off 2.55 percent; energy issues shed 1.78 percent and utility stocks fell 1.67 percent.
Meanwhile, the TSX Venture Exchange was off 11.73 points to 1,300.23 while NASDAQ Canada stocks were down 12.48 points at 627.06.
ON WALLSTREET
U.S. stock indexes on Friday declined for a third consecutive day, with the Dow Jones Industrial Average obliterating a more than 300-point gain, as fears intensified that the $700 billion bank rescue plan won't unfreeze credit markets.
The Dow Jones Industrial Average, previously up as much as much as 313 points, ended down 157.15 points, or 1.5 percent, at 10,325.70, and the S&P 500 gave back 15.04 points, or 1.4 percent, at 1099.24. The Nasdaq lost 29.33 points, or 1.5 percent, to 1947.37.
Friday's performance marked a discouraging end to an ugly week. In five days of trading, the Dow lost 7.3 percent, the S&P 500 stumbled 9.4 percent, and the Nasdaq plummeted 14 percent.
The $700 billion financial rescue plan found approval on its second trip before the House of Representatives, with members voting to purchase illiquid assets from the financial system in addition to several amendments made by the Senate.
The House voted 263 to 171 in favor of the legislation, which is expected to ease strains in the credit markets and help kick-start the economy.
Struggling bank Wachovia made the surprise announcement Friday that it accepted a $15.1 billion buyout bid from Wells Fargo. Wachovia shares jumped 75 percent at the open, while Wells Fargo added 8 percent.
The deal trumps Citigroup's $2.2 billion offer announced Tuesday that didn't include Wachovia's brokerage and asset management businesses. Furthermore, the deal with Wells Fargo will not require assistance from the federal government like Citigroup's deal would.
The Wall Street Journal reported that Washington Mutual CEO Alan Fishman won't stay on at JPMorgan Chase, which acquired WaMu after it failed on Sept. 25.
In other board shakeups, mortgage packager Fannie Mae announced that former CEO Daniel Mudd will not be keeping his seat on Fannie's board.
Longer-dated U.S. Treasury securities were falling in price. The 10-year was losing 32/32 to yield 3.75 percent, and the 30-year was down 1-10/32, yielding 4.23 percent. The US dollar was higher vs. the yen but weakening against the euro and pound.
Oil prices were lower, with U.S. light crude oil for November delivery settling down 9 cents to $93.88 US a barrel on the New York Mercantile Exchange.
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