Business News

Stock markets down sharply on dismal economic, corporate news
TORONTO - The New Year's rally on the Toronto stock market has come to an abrupt halt after six strong sessions, with the main index falling more than 200 points on a litany of distressing economic and corporate news. New York indexes were also lower as a private sector employment report raised fears that Friday's non-farm jobs report for December will come in much worse than expected and chip maker Intel said fourth-quarter revenue missed expectations.
      

Oil prices tumble below $45 on oil reserve report
SIOUX FALLS, S.D. - Energy prices tumbled across the board Wednesday as a government report showed U.S. oil reserves were much bigger than expected, suggesting demand continues to fall. Sweet crude for February delivery tumbled more than seven per cent, or $3.51 to US$45.07 a barrel on the New York Mercantile Exchange after the report was released.
      

Economists predict more financial troubles for Canada in 2009, slow recovery
TORONTO - Canadians should brace themselves for another year of trouble in the domestic economy, and it could even be worse than last year. That's according to some of the country's leading bank economists who are projecting that the global economic struggle will gain momentum in Canada during early 2009.
      

Enterra Energy Trust says it may reduce capital spending as commodity prices slump
CALGARY - Enterra Energy Trust (TSX:ENT.UN) says it may limit capital spending in 2009 due to falling commodity prices, and is looking for alternative investment opportunities to complement its conventional oil and gas drilling program. The Calgary-based trust, which had in November announced plans to double its capital spending in 2009 to $60 million, said Wednesday that "in light of current commodity prices" it may not be able to spend that much to increase its asset base.
      

Capitol Hill aide: Congressional Budget Office to project US$1.2T deficit in ’09
WASHINGTON - Congressional estimators are projecting an unparalleled American budget deficit of US$1.2 trillion for the 2009 budget year. A top congressional aide briefed on the estimate says the Congressional Budget Office also sees a $703 billion deficit for 2010. The dismal figures come a day after President-elect Barack Obama warned of trillion-dollar deficits for years to come.
      

Reitmans same-store sales decrease by 5.4 per cent in December
MONTREAL - Womenswear specialist Reitmans (Canada) Ltd. (TSX:RET.A) says sales at its established stores decreased by 5.4 per cent last month amid weaker holiday spending in December. Reitmans is the first major Canadian retailer to release its December numbers, but its sales shrinkage was not company-specific, president Jeremy Reitman said Wednesday.
      

British clothing retailer Marks & Spencer to cut 1,230 jobs
LONDON - British retail industry stalwart Marks & Spencer Group PLC said Wednesday it will cut 1,230 jobs and close 27 stores in a drive to reduce costs as the retail sector continues to struggle. Chairman Stuart Rose said in a statement the company - Britain's largest clothing retailer - had its biggest trading day ever Dec. 23, selling more than 50 million pounds - or US$74 million - of goods.
      

Ernst & Young appointed as administrators of Oilexco's U.K. subsidiary
CALGARY - Oilexco Inc. (TSX:OIL) says a U.K. court has appointed four administrators from Ernst & Young to take over the function of the board of directors its insolvent subsidiary Oilexco North Sea Ltd. The Calgary-based company, which had previously announced that the U.K. subsidiary would be put under administration this week, said Oilexco North Sea Ltd.'s will continue operations under the process.
      

Total bankruptcies drop in November
OTTAWA - There were 8,669 bankruptcies in Canada in November, about 800 - or 8.4 per cent - fewer than in October. The superintendent of bankruptcy reports there were 8,163 personal bankruptcies during the month, almost 800 - or nine per cent - fewer than in October. There were 506 business bankruptcies, or 10 more than in the month previous.
      

Constellation Brands third-quarter adjusted profit tops view
ROCHESTER, N.Y. - Constellation Brands Inc., which sells Mondavi wine, Corona beer and Svedka vodka, said Wednesday its fiscal third-quarter profit fell 30 per cent because of restructuring costs and weaker sales, and it trimmed the top end of its 2009 forecast amid the slowing global economy. The world's biggest winemaker by volume said it earned US$83.5 million, or 38 cents a share, in the quarter ended Nov. 30, down from $119.6 million, or 55 cents a share, a year earlier. Excluding one-time charges, the company earned $132 million, or 60 cents a share, in the latest period.
      

Russia stops all gas supply to Europe via Ukraine
KYIV, Ukraine - Russia shut off all gas supplies to Europe through Ukraine on Wednesday - leaving more than a dozen countries scrambling to cope during a winter cold snap. Prime Minister Vladimir Putin publicly endorsed the move and urged that international observers be brought into the energy dispute. The effects of the gas cutoff reverberated across the continent, where some countries have substantial reserves and others do not. The EU accused both nations of using consumers as pawns in their quarrel, and tens of thousands of people, mostly in Bulgaria, were without central heating.
      

ATS Automation closes sale of precision components group to management group
CAMBRIDGE, Ont. - ATS Automation Tooling Systems Inc. (TSX:ATA), a maker of factory equipment, says it has finalized the sale of its precision components business to a group led by current management of the money-losing division. The deal, first announced last fall, involved cash and promissory notes but the pricetag was not revealed.
      

WestJet, Air Canada fill more seats in December despite economic uncertainty
CALGARY - Major air carriers WestJet (TSX:WJA) and Air Canada (TSX:AC.A) had fewer empty seats in December despite economic hurdles and one of the "toughest Christmas travel seasons in Canadian history." Calgary-based WestJet reported a load factor of 80.9 per cent for the month, up 1.6 percentage points from 79.3 in December 2007 as the airline increased capacity 10.6 per cent.
      

European stocks down ahead of expected US sell-off
LONDON - European stock markets fell Wednesday ahead of an expected sell-off at the U.S. open, with worries about the economy resurfacing after a surprisingly upbeat start to the New Year. The FTSE 100 index of leading British shares was down 83.18 points, or 1.8 per cent, at 4,555.74, while Germany's DAX fell 50.05 points, or 1 per cent, to 4,976.26. France's CAC-40 was 3.79 points, or 0.1 per cent, lower at 3,392.43.
      

Crosshair, Target agree to combine businesses to create uranium asset base
VANCOUVER, B.C. - Crosshair Exploration and Mining Corp. (TSX:CXX) and Target Exploration and Mining Corp. (TSXV:TEM) have agreed to combine their businesses to create a uranium exploration and development company. The deal is still subject to regulatory approval for both companies.
      

Euro recovers from three-week low against American dollar in early trading
BERLIN - The euro recovered some of its strength against the U.S. dollar Wednesday, rebounding from a three-week low and crossing $1.36 in early afternoon European trading. The 16-nation currency rose as high as $1.3629 before settling back slightly to $1.3616, above the $1.3523 it bought late Tuesday in New York trading.
      

Flaherty says government, banks working to ensure people get loans
MONTREAL - The federal government and the country's banks have agreed to form a group to work on ensuring adequate availability of credit and financing in Canada, Finance Minister Jim Flaherty said Tuesday. "We all have responsibilities to ensure that the financial system functions properly in support of the Canadian economy," he said after a pre-budget meeting with various groups in Montreal. "I encourage the heads of the banks, the CEOs, to work with the government."
      

Flaherty promises tax cuts, but economists question their merits as stimulus
OTTAWA - The federal government is certain to offer a multibillion-dollar economic stimulus plan in its upcoming budget, but an intense debate is developing over whether tax cuts should constitute a key part of the package. Finance Minister Jim Flaherty made clearer Tuesday that the Jan. 27 stimulus budget would contain some form of tax cuts for Canadians to spur retail and other spending and get the economy moving again.
      

British clothing retailer Marks & Spencer to cut 1,230 jobs
LONDON - British retail stalwart Marks & Spencer Group PLC said Wednesday it will cut 1,230 jobs and close 27 of its stores in a drive to reduce costs. Chairman Stuart Rose said Britain's largest clothing retailer had its best day ever on Dec. 23, selling more than US$74 million of goods. But that didn't prevent the company from experiencing its worst quarterly revenue drop in a decade, with sales falling by 7.1 per cent in the quarter ending Dec. 27.
      

Hyundai shortens work week at Czech plant due to falling European demand
PRAGUE - South Korean automaker Hyundai Motor Co. said Wednesday it is cutting work hours at its Czech Republic plant because of falling demand in Europe. The company said it is shortening its normal five-day work week by one day at its first production facility in Europe. The measure will take effect this week and continue at least until the end of January. Workers will receive just under 70 per cent of their salaries during the scaled-back hours.