Stocks on Bay Street traded lower on Tuesday -- led by a drop in financial stocks -- after Manulife Financial warned that it expects to report a quarterly loss and said it will issue more than $2 billion in new stock.
The S&P/TSX composite index was down 78.40 points to 8,327.81.
Manulife Financial Corp. announced it is issuing $2.125 billion in new common shares, and expects to report a $1.5-billion fourth-quarter loss because of annuity provisions. The new stock is priced at $19.40 per share, and Manulife traded down $1.06 to $19.40, with a 52-week range between $42.14 and $16.28.
In other news -- Bank of Nova Scotia was down $2.47 to $32.38 ahead of its quarterly earnings report later in the session.
Sierra Wireless Inc. is bidding 218 million euros -- $345 million -- for Wavecom S.A., a French provider of machine-to-machine wireless communication technology.
Benchmark Energy Corp. announced that it has executed an arm's-length binding letter of intent to acquire 100 percent of Delavaco Energy Inc. for consideration equivalent to $27 million.
The Canadian dollar, meanwhile, was down 0.03 cent to 79.96 cents US.
BAYSTREET
Nine of the TSX sub-groups traded lower today -- financial stocks fell 4.33 percent followed by a 2.31 percent dip in telecom issues and a 1.41 percent drop in real-estate stocks.
On the upside -- gold stocks rose 7.49 percent; energy issues gained 1.73 percent and health-care stocks climbed 1.16 percent.
COMEX gold for February delivery rose $6.50 to $783.30 US an ounce.
Meanwhile, the TSX Venture Exchange inched off 8.02 points to 731.10 and the NASDAQ Canada was off 19.30 points at 384.05.
ON WALLSTREET
U.S. stocks ended firmly higher on Tuesday, gaining back some ground after a 680-point slide in the Dow industrials on Monday, as automakers hopeful for public money presented plans to return to profitability.
The major indices carried gains the entire session, and the Dow Jones Industrial Average ended the day up 270 points, or 3.3 percent, at 8419.09. The S&P 500 gained 32.60 points, or 4 percent, to 848.81, and the Nasdaq added 51.73 points, or 3.7 percent, to 1449.80.
The automakers were in focus throughout the session, releasing monthly sales results and also submitting their bailout plans to Congress. After having been rebuffed last month, the automakers are again seeking access to billions in taxpayer money.
GM, Ford and Chrysler all reported a big plunge in November sales. But some of the auto news was more positive. Ford's CEO said that his company can survive through 2009 without government help. However, GM said it needs $18 billion.
The automakers were also releasing their November sales results throughout the session. GM said sales plunged 41 percent versus analysts' forecasts for a drop of 33 percent. Chrysler said sales fell 47 percent. Ford, Toyota and Honda all reported that sales dropped at least 30 percent.
Ford was the first to unveil its turnaround plan, saying that its CEO will take a salary of $1 for next year and that it will sell its corporate jets. GM's CEO will also take a $1 salary next year.
The Senate Banking Committee is scheduled to host a hearing Thursday, while the House Financial Services Committee is holding its hearing Friday.
Goldman Sachs could post a quarterly loss of as much as $2 billion, according to a Wall Street Journal article. The $5-per-share loss would be five times what analysts are currently forecasting. Shares fell 4 percent.
General Electric said fourth-quarter earnings will come in at the low end of its previous forecast, due to the impact of the financial crisis. However, the company also said it will hang on to its dividend and work to maintain its Triple-A credit rating. That rating keeps its borrowing costs lower than most U.S. companies. Shares gained 13 percent.
Several big technology names were also making headlines. The Wall Street Journal reported that ex-AOL CEO Jonathan Miller is trying to gather money to buy part or all of Yahoo!. The stock rocketed 7.1 percent to $11.50.
Treasury prices gained, lowering the yield on the benchmark 10-year note to 2.70 percent from 2.75 percent Monday. Treasury prices and yields move in opposite directions.
The yield on the 3-month Treasury bill improved to 0.045 percent from 0.025 percent Monday, but still not far from 68-year lows of zero hit last month. The 3-month is seen as the safest place to put money in the short term. A low yield means wary investors would rather preserve cash despite earning little or no interest on it than risk the stock market.
U.S. light crude oil for January delivery eased $2.32 to settle at $46.96 US a barrel on the New York Mercantile Exchange, a 3-1/2 year low.
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