Roger Biduk - Bay Street flat at Midday

Roger Biduk writes:

The Toronto stock market struggled to find traction a day after one of its worst declines on record.

Toronto's S&P/TSX composite index lost tentative early gains and was down 11 points to 8,395.2 - after plunging 864 points or 9.3 per cent Monday. That was the Toronto market's worst one-day drop since the October 1987 crash, erasing more than half of last week's 14 per cent gain.

The Canadian dollar was ahead 0.04 cent to 80.35 cents US, against a background of political tumult in Ottawa, where the Liberals and NDP say they're ready to govern in a coalition with Bloc Quebecois support, while the minority Conservatives look for a way to retain power.

The TSX Venture Exchange headed up 1.59 points to 740.71.

Canadian investors are marking the passing of Ted Rogers, creator of the country's largest cable-TV and cellphone operator with other interests ranging from Citytv to Maclean's magazine to the Toronto Blue Jays. The founder of Rogers Communications Inc. (TSX: RCI-B.TO) died at home at age 75, leaving open the question of succession, though his family controls the company through multiple-voting shares. Rogers shares were off 31 cents to $34.21.

Investors are looking to Washington where top executives of the Detroit Three automakers are set to submit to Congress their plans for revving the companies up with government money. General Motors, Ford and are hoping for a US$25-billion taxpayer top-up, while they report November sales figures that are expected to be grim.

GM shares rose 33 cents to US$4.92 while Ford added 30 cents to US$2.85.

The TSX energy sector, pounded by a 13 per cent slide Monday as crude oil tumbled US$5.15 a barrel, was up 1.6 per cent Tuesday morning. The January crude contract edged up 30 cents to US$49.58 a barrel after going as low as $47.36 overnight. EnCana Corp. (TSX: ECA.TO) was up $1.76 to C$54.08 on the TSX.

The gold sector was up by more than five per cent as bullion in New York gained $5.06to US$781.86 an ounce. Barrick Gold Corp. (TSX: ABX.TO) moved ahead $1.47 to $34.12.

Financials were down 1.8 per cent as Manulife Financial Corp. (TSX: MFC.TO) 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 $1.05 to $19.41with a 52-week range between $42.14 and $16.28.

Bank of Nova Scotia (TSX: BNS.TO) was down 58 cents to $34.27 ahead of its quarterly earnings report later in the session.

Techs were also a major drag with Research In Motion Ltd. (TSX: RIM.TO) down $4.14 to $46.07.
Sierra Wireless Inc. (TSX: SW.TO) is bidding 218 million euros - C$345 million - for Wavecom S.A., a French provider of machine-to-machine wireless technology. Sierra shares fell 87 cents to $8.81.

Asian markets carried through on Wall Street's slide, with Tokyo's Nikkei index closing down 6.4 per cent and the Hong Kong Hang Seng losing five per cent.

London's FTSE 100 index inched 0.36 per cent lower, while the German DAX is up 0.8 per cent and the French CAC-40 advanced 1.3 per cent.

www.rogerbiduk.ca
www.rogerbiduk.wordpress.com