Australian Dollar Extends Decline After Central Bank Minutes

By Candice Zachariahs

Nov. 18 (Bloomberg) -- The Australian dollar extended declines after the central bank said its recent interventions to buy the currency were not ``designed to defend any particular level,'' and it saw benefit in moving quickly to a ``neutral position'' in the minutes of its November policy meeting.

Australia's currency weakened to a low of 64.32 U.S. cents before trading at 64.43 cents as of 12:11 p.m. in Sydney, from 64.82 cents before the minutes were released and 65.24 cents late in Asian trading yesterday. The currency fell as low as 61.99 yen, before trading at 62.19 from 62.57 yen yesterday.

``We saw initial weakness on comments that the foreign- exchange intervention they've done is not designed to defend any particular level,'' said John Horner, a currency strategist at Deutsche Bank AG in Sydney. The minutes ``suggest that maybe the pace of rate cuts will slow in the coming months.''

The Australian dollar has fallen 25 percent since September when the Reserve Bank of Australia made the first of its cuts, slashing interest rates two percentage points to 5.25 percent in its steepest reduction since 1991. The dollar will weaken further over ``the next few weeks and go into the high 50s by the year-end,'' said Horner.

New Zealand's currency was 1.5 percent lower at 55.15 U.S. cents from 55.98 cents in Asia yesterday. It bought 53.24 yen from 54.07.

Stocks Slide

The Australian and New Zealand dollars fell earlier in the day as equities slid on concern the global recession will deepen. U.S. stocks tumbled, extending a two-week drop, after official figures showed a record contraction in New York manufacturing and Citigroup Inc. announced plans to cut 52,000 jobs.

Australia's S&P ASX 200 Index declined 1.1 percent and Macquarie Group Ltd., the nation's biggest securities firm, posted a 43 percent drop in first-half profit after writing down the value of assets.

``Equities are going to retain a pretty important influence over currencies,'' said Joe Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia Ltd.

New Zealand's dollar may weaken further before an announcement on Nov. 21 by Fonterra Cooperative Group Ltd., the world's biggest exporter of dairy products, on milk payments to farmers. Global dairy prices have plunged this year as the U.S. and Australia increased production and last year's record prices lowered demand.

``New Zealand is the largest exporter of dairy in the world,'' said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington. ``Our current account deteriorates quickly with our dairy payouts deteriorating. That's going to keep the currency under pressure.''

Australian government bonds were little changed, with the yield on the benchmark 10-year note at 4.973 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 fell 0.063, or A$0.63 per A$1,000 face amount, to 102.206.

New Zealand's two-year swap rate, a fixed payment made to receive floating rates, declined to 5.44 percent from 5.48 yesterday.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

Read more...

Yen Strengthens Versus the Euro as Recession Curbs Carry Trades

By Stanley White and Ron Harui

Nov. 18 (Bloomberg) -- The yen gained against the euro for a third day as the prospect of a global recession prompted investors to sell higher-yielding assets and pay back low-cost loans in Japan's currency.

Japan's currency also strengthened against the Brazilian real as Asian stocks followed Wall Street lower. The Australian and New Zealand dollars declined on concern recessions in the U.S., Europe and Japan will crimp demand for the commodities exported by the South Pacific nations.

``We're not likely to see any good economic news for some time,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``Stocks and commodities show we're in a recession. In this environment the yen is likely to gain.''

The yen was at 121.74 per euro as of 9:37 a.m. in Tokyo from 121.99 late yesterday in New York. It was quoted at 96.44 versus the dollar from 96.43. The euro slid to $1.2616 from $1.2650. The pound was quoted at $1.4946 from $1.4989.

The yen may rise to 121 per euro and 95.50 against the dollar today, Ishikawa said.

Japan's currency rose to 42.3042 per Brazilian real from 42.4243. In carry trades, investors get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's benchmark rate of 0.3 percent is the lowest among major economies.

Yen Benefit

``The yen continues to benefit from risk aversion,'' wrote currency strategists led by Zurich-based Mansoor Mohi-uddin at UBS AG, the world's second-largest foreign-exchange trader, in a research report yesterday. ``Our core view remains that the low- yielding safe haven currencies will stay supported as the central banks of higher-yielding currencies are forced to cut interest rates further.''

UBS forecasts the yen may strengthen to 90 against the dollar and 108 versus the euro in one month.

The Federal Reserve Bank of New York said yesterday its general economic index fell this month to minus 25.4, the lowest level since records began in 2001. Readings below zero signal New York State manufacturing shrank. The MSCI Asia Pacific index of regional shares fell 1 percent after U.S. stocks tumbled yesterday, extending a two-week decline.

Japan's economy entered a recession in the third quarter as corporate spending and export demand slumped, data showed yesterday. The 15 countries that share the euro are also in a recession, a report showed last week.

Weaker Pound

The pound depreciated to $1.4557 on Nov. 13, the lowest level since June 2002, and 86.63 pence per euro, the weakest since the 15-nation currency's 1999 debut, as the U.K. economy fell into a recession.

Sterling will drop early next year to $1.28 per dollar, the lowest since 1985, as U.K. banks shrink foreign borrowings and the country's policy makers favor a weaker currency, wrote Paul Meggyesi, a foreign-exchange strategist at JPMorgan & Chase Co., in a research note Nov. 14. Sterling will weaken to a record 92 pence per euro, he wrote.

The yen has advanced 14 percent versus the dollar, 33 percent against the euro and 53 percent against the Australian dollar in the past three months on slumping global economies.

Gains in the yen may erode Japanese exporters' earnings by eroding the local-currency value of their overseas sales. The yen's 16 percent appreciation against the dollar this year contributed to companies including Toyota Motor Corp. slashing profit forecasts and cutting investment.

Toyota, which makes more than three-quarters of its sales abroad, forecast profit will fall this fiscal year by almost 70 percent. The automaker will fire 3,000 workers by March, and the Nikkei newspaper reported this month that it will delay adding capacity at a domestic plant that makes Lexus sedans.

To contact the reporters on this story: Stanley White in Tokyo at swhite28@bloomberg.netRon Harui in Singapore at rharui@bloomberg.net

Read more...

Singapore May Weaken Currency in Recession, UBS Says

By Patricia Lui

Nov. 18 (Bloomberg) -- Singapore, facing a slump in exports amid a recession, may change its exchange-rate policy to favor a weakening currency in April or sooner, according to UBS AG.

The Monetary Authority of Singapore, after ending its policy of encouraging gains in the local dollar last month, may be open to depreciation to help revive the $161 billion economy, wrote Ashley Davies and Nizam Idris, currency strategists at the world's second-biggest foreign-exchange trader. The U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank have all cut interest rates to combat recessions.

``Following the aggressive policy moves elsewhere, it now seems unobjectionable for Singapore to ease monetary policy via a weaker currency,'' Davies and Nizam wrote in a research report yesterday. ``While our base case is for a change in policy at the next meeting in April, it could happen earlier should pressure on reserves mount.''

Singapore's dollar traded at S$1.5243 to the U.S. dollar as of 9:08 a.m. local time, according to data compiled by Bloomberg. It earlier touched S$1.5283, the lowest level since September 2007. The currency has declined 7.3 percent in the past three months.

It may drop to S$1.5400 in three months due to ``sustained dollar strength and persistently elevated global aversion,'' the Singapore-based strategists said.

Guiding Currency

Singapore's central bank conducts monetary policy by guiding the currency within an undisclosed band based on a weighted basket of major trading partners' currencies. Policy adjustments are made by adjusting the band.

The MAS, at its last meeting on Oct. 10, said it was shifting to a ``zero-percent appreciation'' stance as the economy slipped into a recession in the third quarter.

Overseas sales last month posted the biggest decline in more than six years as recessions in the world's biggest economies hurt demand for the electronic goods and medicines manufactured in the city. Non-oil exports slid 15 percent from a year earlier, after dropping 5.7 percent in September, the trade promotion agency said yesterday.

Singapore's recession will last about a year and it may take several years of slow growth before the economy returns to normal, the Straits Times reported yesterday, citing Prime Minister Lee Hsien Loong.

Shrinking Economy

Gross domestic product contracted an annualized 6.3 percent in the third quarter from the previous three months, after shrinking 5.7 percent between April and June, economists said in a Bloomberg survey before a government report on Nov. 21.

``One potential date being mentioned in the market for a policy change could be this Friday when the third quarter GDP numbers are finalized,'' Davies and Nizam wrote, adding ``the number could be revised lower.''

Singapore's central bank ``may be forced to move earlier than the April meeting,'' as defending the currency from a slide would drain local funds, ``which may not be desirable given falling asset prices and generally tight liquidity conditions,'' according to UBS.

To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net

Read more...

Crude Oil Rises in New York on Signs U.S. Manufacturing Climbed

By Christian Schmollinger

Nov. 18 (Bloomberg) -- Crude oil rose in New York on signs that U.S. manufacturing increased, raising expectations that fuel demand may improve in the world's largest consumer.

Crude oil for December delivery rose as much as 35 cents, or 0.6 percent, to $55.30 a barrel on the New York Mercantile Exchange. It was at $55.26 a barrel at 9:45 a.m. Singapore time. Prices have tumbled 63 percent since reaching a record $147.27 on July 11.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

Read more...

China Life, SingAir, Wan Hai: Asia Ex-Japan Stocks Preview

By Ian C. Sayson

Nov. 18 (Bloomberg) -- The following companies may have unusual price changes today in Asia trading, excluding Japan. Stock symbols are in parentheses, and share prices are from the previous close, unless noted otherwise.

China Life Insurance Co. (601628 CH): The nation's largest insurer said its 10-month premium income reached 264.8 billion yuan ($39 billion). The stock gained 0.14 yuan, or 0.7 percent, to 21.59 yuan.

City Telecom (H.K.) Ltd. (1137 HK): The second-largest provider of fixed-line phone services to Hong Kong homes said its full year profit more than quadrupled to HK$125.2 million ($16.15 million) on higher sales. The company also said it cut its final dividend by half to 2 Hong Kong cents. The stock decreased 9 cents, or 9.2 percent, to 89 Hong Kong cents.

Digital Telecommunications Philippines Inc. (DGTL PM): The fifth-largest Philippine mobile phone operator said it turned a 683 million peso ($13.73 million) loss in the third-quarter, compared with a 68.53 million peso profit a year ago due to foreign exchange losses and higher financing costs. Digital fell 2 centavos, or 2 percent, to 98 centavos.

Digitech Systems Co. Ltd. (091690 KS). The Korean manufacturer of touch-screen displays said its profit for the three months ended Sept. 30 grew 2.8 percent to 3.38 billion won. The stock gained 150 won, or 1.5 percent, to 10,350 won.

Geodynamics Ltd. (GDY AU): The Australian company seeking to produce electricity from hot underground rocks, intends to start operating the nation's first geothermal power plant by the end of March. The stock fell 1 cent, or 1.1 percent, to 87 Australian cents.

Hyundae Metal Co. (018410 KS): The South Korean manufacturer of security locks for doors and windows said its loss of the quarter ended Sept. 30 more than doubled to 854.37 million won from a year earlier. The stock fell 20 won, or 4.4 percent, to 430 won.

Juken Technology Ltd. (JUKEN SP): The Singapore-based plastics manufacturer said it agreed to buy 60 percent of Micro- Air (Tianjin) Technology Ltd. The stock rose 2.5 cents, or 26 percent, to 12 Singapore cents on Nov. 14.

Li & Fung Ltd. (494 HK): The supplier of toys and clothing to Wal-Mart Stores Inc. and other retailers says it will not fire 1,000 workers, denying a report by Hong Kong's Apple Daily. The company said it aims to cut expenses by 10 percent. The stock gained 22 cents, or 1.5 percent, to HK$14.46.

Mt. Gibson Iron Ltd. (MGX AU): Iron-ore contract prices, at a record on six years of gains, may drop by half next year as demand from China slumps, Australia & New Zealand Banking Group Ltd. said. ``China is iron ore's key market and conditions have deteriorated quickly,'' Mark Pervan, a senior commodity strategist at ANZ in Melbourne, said in an e-mailed report.

Mt. Gibson, an iron ore producer, plunged 1.5 cents, or 4.8 percent, to 29.5 cents.

Petron Corp. (PCOR PM): The nation's largest oil refiner said it may post losses in the fourth quarter on ``continued volatility in oil prices.'' The stock fell 10 centavos, or 2.1 percent, to 4.70 pesos.

Pilipino Telephone Corp. (PLTL PM): The No. 3 Philippine mobile phone services provider said it bought back 39,000 shares at 7.10 pesos each. Piltel, as the company is called, fell 10 centavos, or 1.4 percent, to 7.10 pesos.

Singapore Airlines Ltd. (SIA SP): The world's largest carrier by market value said it flew 1.6 million passengers in October, up 1.3 percent from a year ago and 6 percent more than in the previous month. The stock, also known as SingAir, climbed 14 cents, or 1.3 percent, to S$11.28.

Singapore Technologies Engineering Ltd. (STE SP): Asia's biggest aircraft maintenance company said its electronics unit will liquidate its Australian subsidiary, Ripple Systems Ltd., as part of streamlining its assets. The stock declined 5 cents, or 2.2 percent, to S$2.20.

SKC Co. (011790 KS): The South Korean maker of films and chemical products said it had a 8.65 billion won loss in the quarter ended Sept. 30, compared with a 12.66 billion won profit a year earlier. The stock fell 150 won, or 1 percent, to 14,900 won.

Tan Chong Motor Holdings Bhd. (TCM MK): The Malaysian assembler of Nissan vehicles said profit almost tripled to 95.4 million ringgit ($26.5 million) from a year earlier, boosted by new models and greater cost efficiency at its assembly plant. Sales jumped 69 percent to 1 billion ringgit, it said in a statement. Tan Chong rose 1 sen, or 0.9 percent, to 1.15 ringgit.

Wan Hai Lines (2615 TT): Standard & Poor's said it placed its credit ratings on Wan Hai Lines on review with ``negative implications'' after the company released ``weak'' third-quarter results. Wan Hai, Taiwan's third-largest shipping company, rose 10 cents, or 0.7 percent, to NT$14.35.

-With reporting by Berni Moestafa in Jakarta, Chan Tien Hin in Kuala Lumpur and Shani Raja in Sydney. Editor: Sam Waite

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net

Read more...

Japanese Stocks Fall, Halting Two-Day Gain, on U.S. Slowdown

By Masaki Kondo

Nov. 18 (Bloomberg) -- Japan's stocks fell, breaking a two- day gain, after manufacturing in New York contracted at the fastest pace on record, stoking concern a recession in the world's largest economy is deepening.

Honda Motor Co., which gets half of its sales in North America, lost 4.9 percent. Sony Financial Holdings Inc., which operates Japan's fifth-largest insurer by value, dropped 8.3 percent after first-half earnings fell by more than a quarter. Mitsubishi Estate Co., the nation's No. 2 developer, extended its decline to a sixth day on concern office vacancies are climbing.

The Nikkei 225 Stock Average declined 190.15, or 2.2 percent, to 8,332.43 as of 9:56 a.m. in Tokyo. The broader Topix index fell 11.98, or 1.4 percent, to 838.51.

``We are seeing U.S. economic numbers break one bad record after another,'' Tsuyoshi Kawata, a senior strategist at Tokyo- based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. ``The slump in the U.S. economy will surely be substantial.''

The Federal Reserve Bank of New York yesterday said its general economic index fell to minus 25.4, the lowest since tallies started in 2001. Readings below zero for the index signal manufacturing activity is shrinking. The International Monetary Fund said this month the U.S., Europe and Japan may have their first simultaneous recession in the post-World War II era.

Figures yesterday showed Japan slid into its first recession since 2001, and Economic and Fiscal Policy Minister Kaoru Yosano said today he isn't confident the nation's economy will expand next fiscal year.

Insurers, Developers

Honda, Japan's second-biggest automaker, slid 4.9 percent to 2,040 yen, while Sony Corp., which gets a quarter of its sales from the U.S., sank 3.4 percent to 2,020 yen. Canon Inc., the world's biggest camera maker, lost 3.8 percent to 2,825 yen.

Sony Financial slumped 8.3 percent to 267,200 yen, after saying net income dropped 27 percent in the six months to Sept. 30 because of losses on securities and an increase in insurance payouts. Sompo Japan Insurance Inc. dived 6.9 percent to 715 yen. Tokio Marine Holdings Inc., Japan's biggest listed insurer, dropped 5.6 percent to 2,945 yen.

Mitsubishi Estate, Japan's second-biggest developer, dived 7.7 percent to 1,289 yen, while market leader Mitsui Fudosan Co. sank 5.4 percent to 1,309 yen. Zecs Co., which offers real-estate securitization services, tumbled 10 percent to 3,360 yen. The Topix Real Estate Index fell for a sixth day and headed for the lowest close since January 2004.

Vacancy rates for offices in major cities including Osaka and Nagoya have been climbing, with Osaka's rate at a 2-year high, the Nikkei newspaper said today. Additionally, some cities are going to experience a glut of new office space in coming years that is unlikely to be filled, according the newspaper.

Nikkei futures expiring in December retreated 1.8 percent to 8,340 in Osaka and declined 1.4 percent to 8,335 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Read more...

Asian Stocks Slump as U.S. Production Drops, Commodities Fall

By Patrick Rial and Masaki Kondo

Nov. 18 (Bloomberg) -- Asian stocks retreated to a three- week low on concern the slowing global economy is stifling the outlook for profits.

Sony Corp., which gets a quarter of its sales from the U.S., declined 2.2 percent after manufacturing in New York contracted at the fastest pace on record and the yen rose against the dollar. Rio Tinto Group, the world's third-largest mining company, lost 1.8 percent as aluminum fell to a three-year low and copper dropped.

``We are seeing U.S. economic numbers break one bad record after another,'' Tsuyoshi Kawata, a senior strategist at Tokyo- based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. ``The slump in the U.S. economy will surely be substantial.''

The MSCI Asia Pacific Index lost 1.1 percent to 81.87 as of 9:56 a.m. in Tokyo, set for its lowest close since Oct. 10. More than two stocks fell for each that rose and nine of the 10 industry groups declined.

Shares on the gauge are valued at 10 times trailing earnings and fell to 8.2 times last month, the lowest level since at least 1995, Bloomberg data shows. MSCI's Asian index has lost 48 percent this year as the collapse of the U.S. mortgage market sparked $960 billion in losses and writedowns at financial companies and now threatens a global economic recession.

Japan's Nikkei 225 Stock Average slumped 2 percent to 8352.98. Samsung Electronics Co., the world's biggest computer- memory maker, led stocks lower in South Korea after a U.S. company moved to block imports of electronics containing Samsung chips, citing patent infringement.

Macquarie Jumps

Limiting losses in Australia, Macquarie Group Ltd., Australia's biggest securities firm, advanced 19 percent after profit beat analysts' estimates.

Futures on the Standard & Poor's 500 Index slipped 0.2 percent. In New York, the S&P slid 2.6 percent yesterday.

Sony, the maker of the PlayStation 3 game console, lost 2.4 percent to 2,040 yen. Canon Inc., the world's largest seller of digital cameras, declined 1.7 percent to 2,885 yen.

The Federal Reserve Bank of New York yesterday said its general economic index fell to minus 25.4, the lowest since tallies started in 2001. Readings below zero for the index signal manufacturing activity is shrinking.

Rio lost 1.9 percent to A$72.02 in Sydney. Newcrest Mining Ltd., Australia's largest gold producer, fell 4.2 percent to A$20.03.

Crude oil, which has lost two-thirds of its value from a record $147.27 a barrel in July, dropped 3.7 percent to $54.95 a barrel in New York yesterday, the lowest settlement since January 2007. A measure of six metals traded on the London Metal Exchange fell 3.3 percent.

Kansai Electric

Utilities shares advanced as the slump in oil prices boosted their profit outlook. Kansai Electric Power Co., the second- largest power producer in Japan, rose 1.9 percent to 2,480. Korea Electric Power Corp., South Korea's biggest electricity producer, rose 1.9 percent to 26,450 won.

Macquarie posted a 43 percent drop in profit to A$604 million ($392 million) for the six months to Sept. 30 as falling asset prices forced writedowns. That beat the average estimate of A$592.4 million from analysts surveyed by Bloomberg.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Read more...

U.S. Stocks Fall on Concern Recession to Deepen; Alcoa Retreats

By Eric Martin

Nov. 17 (Bloomberg) -- U.S. stocks tumbled, extending a two- week drop, as a record contraction in New York manufacturing and Citigroup Inc.’s plan to cut 52,000 jobs spurred concern the recession will deepen.

Alcoa Inc., the largest U.S. aluminum producer, lost 11 percent after UBS AG cut its recommendation on the shares and the Federal Reserve Bank of New York’s general economic index slid to the lowest level since records began in 2001. Citigroup fell 6.6 percent to its lowest price since May 1996. Hartford Financial Services Group Inc. plunged 27 percent as Barclays Plc said the insurer may face more “negative developments.”

“You’re going to continue to get barraged with bad economic data,” Bill Stone, who oversees $56 billion as chief investment strategist at PNC Wealth Management in Philadelphia, told Bloomberg Television. “Earnings have hit a wall or fallen off a cliff in a lot of cases. You’re not likely to see much help from this front for a while.”

The S&P 500 declined 2.6 percent to 850.75 after swinging between gains and losses at least 18 times as energy shares climbed earlier in the day. The Dow Jones Industrial Average decreased 223.73, or 2.6 percent, to 8,273.58. The Nasdaq Composite slid 2.3 percent to 1,482.05, a five-year low. Three stocks fell for each that rose on the New York Stock Exchange.

The tumble in U.S. equities today followed declines in Asia and Europe after Japan unexpectedly slid into a recession and Britain’s biggest business lobby said the U.K. slump may be deeper than earlier predicted.

42% Plunge

Rates on three-month Treasury bills, viewed as a haven in times of turmoil, fell 4 basis points to 0.09 percent on the day. They touched 0.02 percent Sept. 17, the lowest since at least 1940.

The S&P 500 is down 42 percent this year as credit-related losses and writedowns at financial firms worldwide topped $966 billion, threatening global economic growth. The benchmark index for U.S. equities is on course for the steepest annual decline since 1931.

Profits slumped 17 percent on average at companies in the S&P 500 that have reported third-quarter results, according to Bloomberg data. Analysts expect an 8.5 percent drop in full-year earnings, based on estimates compiled by Bloomberg.

About 1.3 billion shares changed hands on the floor of the NYSE, 12 percent fewer than the three-month daily average. All 24 industries in the S&P 500 retreated.

Alcoa slid $1.17 to $9.67, helping send the Morgan Stanley Cyclical Index, a gauge of companies most reliant on economic growth to boost earnings, down 3.4 percent to the lowest level since April 2003. The shares were lowered to “neutral” from “buy” at UBS on “uncertainty” in the aluminum market.

Bulldozers, Tractors

Caterpillar Inc., the biggest maker of bulldozers, lost 3.4 percent to $35.70, while Deere & Co., the largest tractor manufacturer, retreated 3.1 percent to $32.74.

Manufacturing in New York contracted in November as orders and sales plunged, the New York Fed’s index showed. The measure fell to minus 25.4, the lowest since records began in 2001, from minus 24.6 percent in October, the bank said. Readings below zero for the Empire State index signal manufacturing is shrinking.

Citigroup fell 63 cents to $8.89. Chief Executive Officer Vikram Pandit said the bank will eliminate 52,000 jobs over the next year, twice the target announced last month, as loan losses surge and the economy shrinks.

An index on financial stocks in the S&P 500 fell 6 percent. Bank of America Corp., the lender that’s buying Merrill Lynch & Co., dropped 8.5 percent to $15.03. Goldman Sachs Group Inc. declined 6.4 percent to $62.49.

‘Treacherous Time’

“The combination of the difficult economic times and the lack of business in that space causes firms like Goldman and the Wall Street banks to really look hard at their model,” Phil Maisano, chief investment strategist at BNY Mellon Asset Management, which manages about $880 billion, said in a Bloomberg Television interview. “This is a bit of a treacherous time.”

Hartford dropped the most in the S&P 500, losing $3.39 to $9.26 and leading insurance companies to an 8.3 percent decline, the steepest among 24 industries.

Barclays advised investors to limit holdings in Hartford, saying the company is “still going uphill” and may face more “negative developments” in the near term. Hartford also said it plans to inject $100 million of capital in Sanford, Florida-based Federal Trust Bank, the lender it’s buying to qualify for Treasury aid.

MetLife Inc., the biggest U.S. life insurer, sank 21 percent to $22.23. Prudential Financial Inc. lost 17 percent to $20.89.

12-Year Low

CIT Group Inc., the largest independent U.S. commercial lender, also plans to sell shares and buy back debt to bolster its ability to absorb losses as the company seeks as much as $2.5 billion from the U.S. government. CIT fell 16 percent to $3.49.

The KBW Bank Index’s retreat to a 12-year low may signal investors in U.S. financial stocks are “ignoring” an improvement in credit markets since October that’s unlikely to reverse, according to Morgan Stanley.

The financial sector is “fairly valued to moderately cheap,” Abhijit Chakrabortti, Morgan Stanley’s New York-based head of global equity strategy, wrote in a research note dated yesterday. He recommended shares of Wells Fargo & Co., JPMorgan Chase & Co., PNC Financial Services Group Inc., Bank of New York Mellon Corp. and State Street Corp.

Target Corp. fell 4.1 percent to $31.68. The second-largest U.S. discount chain said third-quarter profit fell as customers shunned higher-priced goods in favor of necessities and projected lower fourth-quarter earnings than some analysts had estimated. The company also suspended its share buyback program and cut planned capital spending for 2009 by $1 billion.

General Motors Corp. increased 5.7 percent to $3.18, one of three advances in the Dow average, as Congress prepared to consider aid to the auto industry and Germany’s government studied assistance for the company’s Opel unit.

Lowe’s Cos. gained 4.2 percent to $18.99. The second-largest U.S. home-improvement retailer posted third-quarter profit that fell less than analysts estimated after it reduced spending. Lowe’s also forecast full-year earnings that exceed some analysts’ estimates.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

Read more...

Alpha, Cliffs, Ctrip.com, DivX, Stericycle: U.S. Equity Preview

By Lu Wang

Nov. 17 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading tomorrow. Stock symbols are in parentheses, and share prices are as of 5:30 p.m. in New York, unless otherwise specified.

Standard & Poor's 500 Index futures expiring in December lost 3.40, or 0.4 percent, to 849.10. Dow Jones Industrial Average futures fell 112, or 1.3 percent, to 8,259. Nasdaq-100 Index futures slipped 3, or 0.3 percent, to 1,155.50.

Alpha Natural Resources Inc. (ANR US) fell $1.65, or 6.6 percent, to $23.25 in trading after the normal close of exchanges. The producer of metallurgical coal and Cliffs Natural Resources Inc. (CLF US) terminated their $2.88 billion agreement to merge because of the global credit crunch and ``uncertainty'' in the steel market, the companies said.

Cliffs gained $1.35, or 6.9 percent, to $21 in extended trading.

Ctrip.com International Ltd. American depositary receipts (CTRP US) fell $1.68, or 7.1 percent, to $21.98. The biggest online ticketing agent in China forecast sales in the fourth quarter may grow as little 5 percent from a year earlier, slowing from 15 percent in the third quarter.

DivX Inc. (DIVX US) fell 61 cents, or 11 percent, to $4.92. The maker of software to download Web videos reduced its 2008 earnings forecast and said Yahoo! Inc. (YHOO US) plans to end an advertising agreement.

Electronics Arts Inc. (ERTS US): The second-largest U.S. video-games publisher filed a statement with regulators indicating it may seek to raise capital. The stock fell 5.6 percent to $19.30 in regular trading.

Stericycle Inc. (SRCL US) added $1.52, or 2.6 percent, to $60.39. The provider of medical waste management services will replace Anheuser-Busch Companies Inc. (BUS US) in the Standard & Poor's 500 Index, S&P said in a statement.

Transmeta Corp. (TMTA US) rose 43 cents, or 2.4 percent, to $17.95. The computer-chip designer agreed to be bought by privately held Novafora Inc. for $255.6 million in cash, or $18.70 to $19 a share.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

Read more...

Immelt's GE Purchases Signal Sell as Insiders Buy

By Eric Martin and Michael Tsang

Nov. 17 (Bloomberg) -- General Electric Co. Chief Executive Officer Jeffrey Immelt and Citigroup Inc.'s Vikram Pandit are back to buying their own companies' shares. That means there may be more stock declines to come.

CEOs, directors and other senior officers at New York Stock Exchange-listed companies purchased $1.37 billion worth of equities in October, according to Bethesda, Maryland-based research firm Washington Service. They snapped them up as the Standard & Poor's 500 Index fell 17 percent, the most since 1987.

Insider buying, a bullish signal for two decades, lost its prescience this year and now may be a harbinger of a retreat in shares because it signals overconfidence, according to Ben Silverman, director of research at InsiderScore.com, a stock tracking firm in Princeton, New Jersey. The last time officers bought as much was in March 2008, preceding a drop in the S&P 500 a month later, data compiled by Bloomberg show.

``Everyone's drinking the Kool-Aid,'' said Michael Levine, a money manager at New York-based OppenheimerFunds Inc., which oversees $160 billion. ``These guys know their companies better than the market, so they think they'll be right. But the economic slowdown has happened much more quickly and has been much deeper than people expected.''

Insiders stepped up purchases in the past four months, buying $57 worth of shares for every $100 sold in October, from a low of $21 bought in June. The last time the amount of buying increased as much was in March, when executives bought $62 of shares for every $100 they sold.

False Starts

The S&P 500 retreated 2.6 percent to 850.75 today. The gauge gained 7.9 percent from the end of March to 1,426.63 on May 19, before giving up the entire advance the next month. The index dropped 44 percent through Nov. 14 from a record in October 2007 as signs of a recession increased and banks lost almost $1 trillion on mortgage-related investments.

Insiders scooped up $2.15 billion of stock in August 2007 as S&P 500 companies reported record quarterly profits. Executives at financial firms such as Wachovia Corp. Chairman Lanty Smith and Washington Mutual Inc. director Michael Murphy accounted for a third of purchases after industry profits reached an all-time high. The S&P 500 rose 6.2 percent from the end of the month until the start of the bear market in October.

``Recent history isn't on their side,'' said Silverman, whose firm tracks insider transactions for more than 325 institutional investors. ``We saw in financials last year people fooled by their own imagination. Whether it was hubris or being too close, not being able to see the forest for the trees.''

Best Buy

The S&P 500 lost 6.2 percent last week, dragged down in part by a 14 percent plunge in Best Buy Co., the largest U.S. electronics retailer. The Richfield, Minnesota-based company said last week that profit and sales will fall more than analysts forecast. Founder Richard Schulze bought 1.76 million shares three weeks before the announcement. The purchases were his first in at least five years, according to data compiled by Bloomberg.

A phone message left for Best Buy spokeswoman Susan Busch wasn't returned.

GE's Immelt purchased 50,000 shares at prices from $16.41 to $16.45 on Nov. 13, the same day the stock dipped below $15 for the first time since 1996.

Immelt, who took over on Sept. 7, 2001, bought GE stock after the terrorist attacks in New York and Washington four days later. The 52-year-old executive works without a contract and has always exceeded a requirement that he hold shares valued at least six times his salary. With his most recent purchase, Immelt now owns more than 1.62 million GE shares, based on U.S. Securities and Exchange Commission filings.

Immelt's Confidence

Immelt's purchase ``reflects his confidence in the company,'' said Gary Sheffer, a spokesman for the Fairfield, Connecticut-based company.

Pandit, 51, bought 750,000 common shares on Nov. 13, paying an average of about $9.25 apiece, New York-based Citigroup said in a filing with the SEC. He also bought 100,000 preferred shares. In all, he spent about $8.4 million. Citigroup closed last week at $9.52.

``The purchases reflect the belief in the long-term strength and growth opportunities of the company,'' said Citigroup spokesman Michael Hanretta.

Nine officers and two directors at Consolidated Edison Inc., including Chief Financial Officer Robert Hoglund, bought the stock at $42.79 on Oct. 3. One month later, the owner of New York City's biggest utility said third-quarter profit fell 42 percent, more than analysts estimated, on higher operating costs and taxes. The stock dropped 9.2 percent since their purchases.

The Consolidated Edison executives weren't available to comment, a spokesman for the New York-based company said.

Buy Signals

In the past, insider purchases were a reliable indicator for investors looking to buy. Between 1988 and 2007, executives at NYSE-listed companies were net buyers on eight occasions, monthly data compiled by Washington Service show. In every case, the S&P 500 rallied in the following 12 months, posting an average advance of 21 percent.

Penn Capital Management's Eric Green still considers buying by company executives to be bullish, especially when U.S. stocks are trading at historic lows relative to profits.

The S&P 500 fetches 9.96 times next year's estimated earnings from continuing operations, compared with the weekly average of 21.1 times historical operating profit over the past decade, according to data compiled by Bloomberg.

``It's always bullish when the insiders are buying because they believe in the fundamentals of the company and think the valuations make no sense,'' said Green, director of research at Penn Capital Management in Cherry Hill, New Jersey, which oversees $3 billion. ``This market could go up very, very quickly, and if you're not in it you'll miss it.''

Worsening Fundamentals

So far, fundamentals such as earnings have dropped along with stocks. Profits at S&P 500 companies declined for five straight quarters, the most since 2001. One-third of companies, including Burbank, California-based Walt Disney Co. and Seattle- based Starbucks Corp., missed analysts' estimates for third- quarter earnings -- the biggest shortfall since 1997, data compiled by Bloomberg show.

``If you're a company insider, you may not fully appreciate the economic wreckage going on worldwide,'' said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, who helps manage about $60 billion. ``From the inside out, the company looks a lot more solid than from the outside in.''

To contact the reporters on this story: Michael Tsang in New York at mtsang1@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net

Read more...

Paulson Says Markets to Remain Stressed for `Months'

By John Brinsley and Rich Miller

Nov. 17 (Bloomberg) -- Treasury Secretary Henry Paulson said markets may be under stress for ``months'' and two of President-elect Barack Obama's top economic advisers agreed that further steps are needed to shore up the economy.

``There will be stress in the capital markets for a number of months,'' Paulson said at a panel discussion in Washington. He was joined at the conference by Clinton administration Treasury chiefs Robert Rubin and Lawrence Summers.

``Restoring the financial system will go a long way toward helping the economy recover,'' Paulson said. ``There's still a good bit to be done, because the economy has turned down, housing prices are still declining.''

Rubin, now a senior counselor to Citigroup Inc., predicted the crisis of confidence will abate ``within a reasonable period.'' Summers, now at Harvard University, called for a ``speedy, substantial and sustained'' fiscal stimulus that seeks to boost the economy for the next two to three years.

Paulson and Federal Reserve Chairman Ben S. Bernanke met earlier with House Speaker Nancy Pelosi and other Democratic leaders to discuss how the funds are being used and a proposal to rescue the auto industry.

Pelosi said she urged Paulson today to use ``all authorities granted to him'' under the $700 billion financial rescue program to stem foreclosures on residential mortgages.

TARP Funds

At the conference, Paulson reiterated his defense of the Treasury's decision this month to abandon its plan to buy toxic assets from banks. The divergence from the original intent of the Troubled Asset Relief Program came with two months left in the Bush administration.

Paulson said last week the TARP would be used to shore up the market for securitized auto, student and credit-card loans.

The Treasury has completed about $159 billion in preferred equity purchases of large and medium-sized banks. A total of $250 billion of the $700 billion has been set aside for capital injections into financial institutions.

The Bush administration has told congressional aides it won't ask lawmakers to release the remaining $350 billion, people familiar with the matter said.

Paulson said strains on the country's budget will require his department to sell $1.5 trillion in Treasury debt this fiscal year, which began Oct. 1. The Treasury announced on Nov. 3 plans to borrow $550 billion in the current quarter and $368 billion in the January-March period.

Auto Bailout

Earlier today, Senate Democrats announced legislation that would give automakers as much as $25 billion in TARP funds to help prevent the collapse of the three main U.S. firms. The measure would impose limits on executive pay and require stock warrants to help taxpayers recoup the investment.

Paulson, who has opposed the use of TARP for the auto industry, reiterated that any rescue for the companies must take into account their ability to recover.

``I feel very strongly that anything we do has got to have a path to sustainability,'' he said. ``It would be a huge mistake to just say, `well, how do we know what viability is, so let's just give them some money.'''

Rubin said that ``we need to avoid a failure of the auto companies, but we need to marry that with a plan to getting the auto companies into an economic model that will succeed.''

General Motors Corp., Ford Motor Co. and Chrysler LLC are seeking aid as industrywide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.

Ford's Losses

The largest U.S. carmaker said it may not have enough cash to get through the year. Ford lost $2.98 billion in the third quarter as sales fell 22 percent.

The Treasury has committed $290 of the first half of the rescue plan to buy stakes in banks and insurer American International Group Inc.

Treasury and the Fed are working on a new plan to ease strains in the markets for car and student loans, as well as credit-card debt that ``would take relatively modest amounts of TARP assets,'' Paulson said. ``When you look at what this economy may need, it's pretty hard to believe we're going to get the kind of recovery we need with the credit markets in a number of areas still as clogged as they are.''

To contact the reporter on this story: John Brinsley in Washington at jbrinsley@bloomberg.netRich Miller in Washington rmiller28@bloomberg.net

Read more...

U.S. Cotton Exports Drop at Fastest Pace in Decade

By Shruti Date Singh

Nov. 17 (Bloomberg) -- Cotton users are halting orders from the U.S., the world's biggest exporter, at the fastest pace in at least a decade as the economic slowdown erodes demand from China and sends prices to a six-year low.

Delays, cancellations and order reductions of U.S. upland cotton by foreign buyers rose almost sevenfold from a year earlier to 329,600 running bales (74,752 metric tons) in the first 13 weeks of the marketing year that started in August, data from the U.S. Department of Agriculture show. The level is the highest since at least 1998. A bale weighs 500 pounds.

Cotton prices are down 55 percent from a 12-year high in March, and Barclays Capital says demand is so weak no rally is likely to last. Commodity buyers from metal recyclers and sugar processors to clothing makers are struggling to honor contracts signed when prices were higher.

``We are seeing quite a few delays,'' said Andy Weil, president of Weil Brothers Cotton Inc. in Montgomery, Alabama, and past president of the American Cotton Shippers Association. ``Demand is in a terrible state of affairs. When Chinese exports depend on American and Europeans economies, which are now in a recession, they have no demand for raw materials.''

Demand, Prices Fall

China, the world's biggest cotton importer, canceled or delayed 34,100 bales of U.S. orders in the week ended Oct. 23, or 4,100 bales more than its new orders, according to the USDA. Total reductions reached 41,300 bales that week, including buyers in Bangladesh and Indonesia. A week later, cancellations and delays were 11,500 bales from buyers in China, Turkey and Indonesia, government reports show.

The USDA said on Nov. 10 farmers will sell upland cotton, the most common variety in the U.S., for 45 cents to 55 cents a pound in the year through July 31, down from an October estimate of 51 cents to 62 cents, and below 59.3 cents in the previous year.

Cotton for March delivery fell 0.89 cent, or 2.1 percent, to 41.62 cents a pound on ICE Futures U.S. in New York, down from 92.86 cents on March 5, at the time the highest price for a most-active contract since September 1995. The 23 percent drop in October was the biggest monthly decline since at least 1986.

Global cotton use will drop 3.3 percent to 119.3 million bales in the current marketing year, the USDA estimates. China will consume 51 million bales, down from an initial estimate of 55 million and the first annual decline in a decade, as consumer spending falls, the USDA said.

`Very Difficult Time'

China's cotton imports from January through October dropped 8.3 percent from a year earlier to 1.87 million metric tons, according to the Beijing-based Customs General Administration.

Jiangsu Yulun Textile Group Co., a yarn spinner in Jiangsu province, buys cotton to last less than a month, compared with three months of inventories in the past.

``We are having difficulty with financing,'' Zhang Jianhong, manager of materials at Jiangsu, said by telephone from Qingjiang. ``The risk of importing cotton is very high. The downstream businesses, the clothing manufacturers, owe us money. All we have are bunch of IOUs. It's a very difficult time.''

Cotton consumption will be lower than previously expected in Pakistan and Turkey, the largest importers after China, according USDA forecasts.

Demand `Non-Existent'

``For my company, the demand is fairly non-existent,'' said Angie Goodman, president of Lubbock, Texas-based ACG Cotton Marketing LLC, which ships cotton mainly to Turkey. ``They are buying in a hand-to-mouth method.''

Same-store sales by department stores in the U.S., the world's largest economy, fell 11 percent last month and 19 percent for luxury retailers, the International Council of Shopping Centers said Nov. 6. Macy's Inc., the second-biggest U.S. department-store chain, is buying less merchandise and reducing capital spending to prepare for a disappointing spring shopping season, Chief Financial Officer Karen Hoguet said on an earnings conference call with analysts Nov. 12.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net.

Read more...

Corn Rises as Rain, Snow Delays Harvest in U.S.; Soybeans Gain

By Tony C. Dreibus

Nov. 17 (Bloomberg) -- Corn rose after rain and snow in some Midwest growing areas slowed a U.S. harvest that already was delayed by wet weather during planting, lowering yield prospects. Soybeans gained on increased demand for the oilseed.

About 71 percent of the corn crop was collected as of Nov. 9, less than the 92 percent harvested a year earlier, U.S. Department of Agriculture data show. The harvest probably will remain behind the year-ago pace after rain in Iowa, the largest U.S. producer, and snow and ice in South Dakota kept farmers out of fields.

``In Iowa, they are too wet, they can't get into the fields,'' said Mike Zuzolo, the chief analyst at Risk Management Commodities in Lafayette, Indiana. ``In South Dakota, they had snow and drifts on the ground and corn was laden with ice because the rain changed to snow. It sounds like the Dakotas are having too much snow for plants to go through the combine.''

Corn futures for December delivery rose 5.5 cents, or 1.4 percent, to $3.8575 a bushel on the Chicago Board of Trade. The price still is down 52 percent from a record $7.9925 on June 27.

Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, with soybeans in second place at $26.8 billion, government figures show. The U.S. is the world's biggest producer and exporter of both crops.

Parts of Iowa and Illinois, the biggest growers of corn and soybeans in the U.S., received six times the normal rainfall in May and June, according to the National Weather Service, flooding fields and delaying seeding.

In October, about six times the normal precipitation fell from Nebraska, the third-biggest producer, to Texas, NWS data show.

Soybeans

Soybeans rose as demand for U.S. supplies increases. Importers have committed to buy 15.6 million tons since the marketing year began Sept. 1, up 8 percent from the prior year, USDA data show. Exporters have shipped 8.2 million tons, up 3 percent from the same period in 2007, government data show.

``I am impressed with soybean exports,'' said Darrell Holaday, president of Advanced Market Concepts in Manhattan, Kansas. ``Right now, it's the U.S. or nowhere.''

Soybean futures for January delivery rose 10.5 cents, or 1.2 percent, to $9.065 a bushel in Chicago. Most-active futures are down 45 percent since touching a record $16.3675 on July 3.

Soybean and corn prices also may have gained on speculation dry weather will damage crops in Argentina, the world's second- largest corn exporter and third-largest for soybeans.

``The trend toward below-normal rain and above-normal temperatures continues, increasing stress to wheat and early planted summer crops,'' Minneapolis-based private forecaster DTN Meteorlogix LLC said today in a report.

To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.

Read more...

Cattle Fall as Demand May Shrink Before Thanksgiving; Hogs Drop

By Whitney McFerron

Nov. 17 (Bloomberg) -- Cattle fell to the lowest price this month on speculation U.S. consumers are buying less beef prior to the Thanksgiving holiday. Hog futures also dropped.

U.S. meatpackers sold 20.1 million pounds of beef last week, the least since the week ended Oct. 17, according to Department of Agriculture data. U.S. consumers tend to cut back on beef purchases in November as retailers step up marketing of turkey for Thanksgiving, said Dick Quiter, an account executive at FuturesOne. The holiday falls on Nov. 27 this year.

``Volume is light,'' Quiter said in a telephone interview from Chicago. ``Domestic demand certainly should be a little lighter going into the Thanksgiving holiday, and that's setting enough of a negative tone.''

Cattle futures for February delivery fell 1.65 cents, or 1.8 percent, to 89.025 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched 88.5 cents, the lowest for a most-active contract since Oct. 28. Futures have dropped 4 percent this month.

Feeder-cattle futures for January delivery declined 1.375 cents, or 1.4 percent, to 93.9 cents a pound in Chicago. Earlier, the price touched 92.95 cents, the lowest for a most-active contract since Oct. 27. Futures have slipped 4.2 percent this month.

Meatpackers sold 501.9 truckloads of choice beef last week, according to USDA data. Each load weighs 40,000 pounds (18,140 kilograms).

Higher Beef Prices

Wholesale beef rose 0.69 cent, or 0.4 percent, to $1.5771 a pound at midday today, the highest price since Sept. 25, USDA data show. On Nov. 14, the price fell 0.35 cent, the first drop since Oct. 29. Beef has gained 11 percent this month.

Cattle futures also fell amid speculation a global economic slump will prompt consumers to buy less beef, said Christian Mayer, a market adviser at Northstar Commodity Investments LLC in Minneapolis. The Standard & Poor's 500 Index declined as much as 2.8 percent today and was down 9.9 percent this month through Nov. 14.

``If people don't have money, they won't be buying steaks,'' Mayer said.

In another livestock market, hog futures for February settlement fell for a second session, declining 0.525 cent, or 0.8 percent, to 62.05 cents a pound in Chicago. Futures gained 8.1 percent this year before today.

Wholesale pork fell 0.55 cent, or 1 percent, to 56.41 cents a pound on Nov. 14, according to the USDA. The price is down 9.3 percent this month.

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

Read more...

Canada Stocks Fall to 3-Week Low as Manulife, Goldcorp Decline

By John Kipphoff

Nov. 17 (Bloomberg) -- Canada's main stock index fell to a three-week low, led by finance and commodity companies, after Citigroup Inc. announced 50,000 job cuts and Japan entered a recession.

Manulife Financial Corp. led finance companies to the lowest in almost 4 ½ years after CIBC World Markets cut its share-price target for Canada's biggest insurer. Goldcorp Inc. and EnCana Corp. paced drop in commodity producers after oil and metal prices slid and UBS AG predicted lower prices next year for all but four of 28 raw materials that it forecasts. Research In Motion Ltd. rose, ending a five-day slump.

``The recession will be long on Main Street,'' said Pierre Bernard, who co-manages about $1 billion at Clarington Capital Management Inc. in Montreal. ``I'm trying to take advantage of the pessimism and buy here and there. But you can't fight the tape. Commodities went too high and now they're going too low.''

The Standard & Poor's/TSX Composite Index dropped 2.9 percent to 8,795.45 in Toronto, the lowest closing level since Oct. 27. The S&P/TSX, which gets almost three-quarters of its value from mining, energy and finance shares, has slid 42 percent from a June peak as global credit losses approached $1 trillion and commodities slumped.

New York-based Citigroup, which lost $20 billion in the last four quarters, plans to cut more than 50,000 jobs and reduce expenses by 20 percent from their peak. Japan, the second-biggest economy, slid into a recession in the third quarter, the first since 2001, a report showed. The Federal Reserve Bank of New York's general economic index fell to the lowest level since records began in 2001.

The U.S. and Japan are Canada's two biggest export markets.

`Disappointing' Results

Manulife retreated 8.8 percent to C$21.06. Canadian life insurance companies had ``disappointing'' third-quarter results as poor equity market performance and credit losses reduced earnings, CIBC World Markets analyst Darko Mihelic wrote in an e-mailed note to clients. He lowered Manulife's share-price target by 14 percent to C$31.

Sun Life Financial Inc., which had its share estimate cut 13 percent to C$34 by Mihelic, slid 6 percent to C$23.65.

Royal Bank of Canada, the nation's biggest lender, dropped 2.6 percent to C$43.36. Toronto-Dominion Bank, the second- largest bank, slid 3.4 percent to C$51.75. Bank of Montreal decreased 3.7 percent to C$39.90. Canadian Imperial Bank of Commerce fell 1.7 percent to C$51.86.

Bank of Montreal and Canadian Imperial may be the most ``adversely affected'' among Canadian lenders by calls emerging from the Group of 20 leaders meeting for higher capital standards and stronger risk management at banks, said Michael Goldberg, a Desjardins Securities analyst.

Industry Indexes

A gauge of financial companies dropped 3.9 percent to 1,247.82, the lowest since May 2004. Measures of raw-materials and energy shares fell 3.5 percent and 2.9 percent, respectively.

EnCana, Canada's biggest energy company by market value, fell 5.9 percent to C$51.50. Canadian Oil Sands Trust, lead partner in the largest tarsands producer, fell 3.3 percent to C$25.61.

Petro-Canada slid 6.5 percent to C$23.95. The country's third-largest oil company delayed a C$25.3 billion ($20.6 billion) oil-sands mining project because of rising costs and falling oil prices. Partner UTS Energy Corp. fell 12 percent to 80 cents. Another partner, Teck Cominco Ltd., gained 4.6 percent to C$6.64.

Crude oil for December delivery fell 3.7 percent to $54.95 a barrel in New York, the lowest close in 21 months, as Japan entered its first recession since 2001 and China's largest oil producer said demand had declined ``sharply.'' Prices have tumbled 63 percent from a July record.

Copper, Gold

Copper futures fell 2.8 percent in New York and gold retreated as the U.S. dollar rose, reducing commodities' appeal.

Goldcorp, the world's second-biggest bullion mining company by market value, dropped 7.5 percent to C$24.25. Larger rival Barrick Gold Corp. slid 3.9 percent to C$26.14. Agnico-Eagle Mines Ltd., the owner of Canada's biggest gold deposit, plunged 8.1 percent to C$36.79.

Agrium Inc., North America's third-biggest fertilizer company, retreated 5.9 percent to C$38.10.

Research In Motion gained 5 percent to C$51.60. The maker of the BlackBerry e-mail phone dropped 15 percent last week. Soros Fund Management LLC and Citadel LP added shares of Research In Motion in the quarter ended Sept. 30, regulatory filings published Nov. 14 after markets closed showed.

To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.

Read more...