Bay St. could extend slump

Nov. 3, 2009 (Baystreet.ca) --

Canadian stocks will look to snap back from a two-month low on Tuesday, but early signals are pointing to another lackluster session amid concerns that the global economic recovery has yet to take hold. Minutes after the open, the S&P/TSX composite index was off 81.56 points to 10,796.79. Railroads could provide a measure of support after billionaire investor Warren Buffett's Berkshire Hathaway acquired major U.S. company Burlington Northern Santa Fe, giving a shot in the arm to the entire industry. On the commodity front, crude oil has dropped in price. Meanwhile, gold gained strength. Kinross Gold posted a net loss of $21.5 million U.S. or $0.03 U.S. per share for the third quarter, compared to net earnings of $64.7 million U.S. or $0.10 U.S. per share in the prior-year quarter. Iamgold Corp. said it secured an approval to proceed with the $9-million deep sulphide feasibility Study from the Societe D'Exploitation Des Mines D'Or De Sadiola, the owner of the Sadiola Gold Mine in Mali, West Africa. Talisman Energy reported third-quarter net income of $30 million or $0.03 per share, compared to $1.43 billion or $1.38 per share last year. MDS Inc. said the company, along with Danaher Corp., have each received a second request for information from the Federal Trade Commission regarding the sale of MDS Analytical Technologies. Ritchie Bros. Auctioneers reported third-quarter net income of $12.892 million U.S. or $0.12 U.S. per share compared to $11.934 U.S. million or $0.11 U.S. per share last year. The Canadian dollar lost 0.10 cents to 92.65 cents U.S. ON BAYSTREET All but one of the 14 TSX subgroups were lower, weighed mostly by metals and mining stocks, off 2.5%, global base metals, down 2.3% and energy stocks, trailing yesterday's close by 1.6%. Only a 0.6% surge by industrials averted unanimity. The TSX Venture Exchange skidded 1.26 points to 1,288.36, while the Nasdaq Canada index nipped upwards 3.82 points to 613.89. ON WALLSTREET In New York, stocks slid at Tuesday's open, as investors remained on edge at the start of the Federal Reserve's two-day policy meeting. The Dow Jones Industrials fell back 64.47 points to start the day at 9.724.97. The S&P 500 index faded 6.49 points to 1,036.39. The Nasdaq composite index backpedaled 13.79 points to 2,035.41. Wall Street staged a late-session rally Monday and finished the day with gains. But trading was volatile as investors remained jittery after the recent selloff. Trading is expected to continue its choppy trend as investors look for further signs that the economy is indeed recovering. Investors may take some comfort in the spate of better-than-expected corporate results being reported for the latest quarter. Roughly 70% of the S&P 500 have reported results, which are on track to have fallen 17.5% from a year ago, according to Thomson Reuters. But the current quarter is expected to be much brighter, with forecasts calling for a year-over-year growth rate of 214.9%. Investors may stay on the sidelines as central bankers get their two-day meeting underway. The Fed's policy statement is due out Wednesday. Investors will digest October auto sales later Wednesday, while a reading on factory orders was due out at 10 a.m. ET. Expectations were for a gain of 1.2%, according to Briefing.com estimates. Much of this week's attention, however, is focused on Friday's jobs report, which is expected to show another 166,000 jobs cut in October. That would be on top of the 263,000 that were slashed in the prior month. And the unemployment rate is forecast to inch up to 9.9% from its current 9.8%. Warren Buffett's Berkshire Hathaway announced plans to buy Burlington Northern Santa Fe in a deal valued at $44 billion U.S., including $10 billion U.S. in debt. The Omaha-based conglomerate said it will pay $100 U.S. per share in cash and stock to increase its stake in the railroad company to 100%. Johnson & Johnson said it plans to cut up to 7% of its global workforce as part of a cost-cutting plan aimed at saving the company up to $1.7 billion U.S. by 2011. J&J had 118,700 employees as of last year. Stanley Works has agreed to buy Black and Decker in a deal valued at $4.5 billion U.S., the companies announced late Monday. Credit card processor Mastercard reversed the third-quarter loss of a year ago, earning $452 million U.S., or $3.45 U.S. a share, in the most recent quarter. Treasury prices gained ground, lowering the yields for the benchmark 10-year note to 3.40% from Monday's 3.43%. Prices and yields move in opposite directions. The price of a barrel of oil gave back 86 cents to $77.20 U.S. Gold prices gained $5 to $1,059 U.S. an ounce.