Mixed start to week

Feb. 9, 2009 (Baystreet.ca) --

11:18 am EST Markets in North America were mixed Monday morning, amid reports more layoffs could be distributed throughout the economy.

New York stocks came around by mid-morning Monday, after slipping a bit as investors considered the ongoing U.S. economic stimulus debate and a delay in the announcement of the bank bailout plan.

The S&P TSX Composite Index surged 118.73 points mid-morning to 9,126.75

More Canadian companies are expected to dole out pink slips this week as earnings season heats up and weaker results could cause corporate Canada to pare costs to deal with a worsening recession.

Dismal earnings reports often run hand-in-hand with job cuts, and economists say times will be rough for some domestic companies, as their partners and customers in the United States suffer.

South of the border, the layoffs have been drastic and deep in recent weeks, when U.S. giants such as heavy equipment maker Caterpillar Inc., software firm Microsoft Corp., aluminum company Alcoa Inc. and chip maker Intel used their first-quarter reports to reveal tens of thousands of job cuts.

The prediction is that many Canadian companies will either post significant profit drops or widen their losses for the final months of 2008 - and workers will be on the chopping block because of it.

On the earnings schedule this week are key companies like Calgary-based fertilizer producer Agrium Inc. and Caterpillar dealer Toromont Industries Ltd. Both could become victims of downturns across their own industries.

Other companies reporting include energy giants EnCana, Enbridge and Precision Drilling, beer maker Molson Coors, pilot trainer CAE Inc. and discount airline WestJet.

Agrium has already laid off 380 workers, but has also said it will write down the value of its operations by $115 million U.S. in its fourth-quarter report and shut down production at its Fort Saskatchewan nitrogen facility.

Toromont Industries Ltd. could also take a hit from a downturn at Caterpillar, which is cutting 20,000 jobs, or about 18% of its workforce on weaker sales.

Finning International Inc. has already laid off 700 people, about 5% of its workforce, but so far Toromont hasn't announced any staff reductions,

The Canadian dollar jumped 0.33 cents to $81.95 cents U.S.

BAYSTREET Of the 13 TSX sub-groups, 11 were moving ahead, led by energy stocks, up 4%, metals and mining stocks were next, ahead 3.0%, and financials, advancing 1.3%.

Gold stocks were down 3.0% and materials slipped 0.6%.

The TSX Venture Exchange was off 2.25 points to 907.09, while the NASDAQ Canada index was ahead 5.95, at 581.65

ON WALLSTREET

The Dow Jones industrials index inched ahead 10.27 points by mid-morning to 8,290.86. The Standard & Poor's 500 index stepped up 3.55 points to 872.15. The NASDAQ composite index improved 1.04 points to 1,592.75

The Senate's compromise stimulus measure will be debated on the floor Monday, with a vote scheduled Tuesday. Should it pass, there would be a House-Senate conference to reconcile the two versions of stimulus the administration seeks.

The conference would have to move quickly if lawmakers are to achieve their goal of getting final legislation to President Obama's desk by Presidents Day, next Monday.

As for the bank bailout, the Treasury Department announced over the weekend that Treasury Secretary Tim Geithner will unveil his plan Tuesday - one day later than scheduled, in order to focus on the stimulus package in the Senate. Geithner is scheduled to reveal how the Obama administration plans to use the remaining $350 billion of the Treasury's $700-billion U.S. Troubled Asset Relief Program (TARP).

DreamWorks SKG, the movie company controlled by Steven Spielberg, severed its film distribution pact with General Electric's Universal Studios. The move put DreamWorks into advanced talks with Walt Disney for a deal that could lead to further production funding.

General Motors is in talks to buy back portions of auto parts maker Delphi, which was spun off by the automaker in the 1990s, according to a report in the Wall Street Journal. The paper said the deal would allow GM to qualify for further government bailout assistance.

Treasury prices slumped, raising the yield on the benchmark 10-year note to 2.98% from 2.89% Thursday.

U.S. light crude oil for March delivery rose $2 to $42.17 U.S. a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery fell $14.40 to $899.90 U.S. an ounce.