Closing Bell Stock markets back off US Treasury warns of dire scenario

TORONTO — The Toronto stock market racked up another round of losses Thursday, reflecting increased volatility arising from worries that the United States could be heading for a big economic shock later this month.Here are the closing numbersTSX — 12,735.12 -103.88 -0.81%S&P 500 — 1,678.66 -15.21 -0.90%Dow — 14,996.48 -136.66 -0.90%Nasdaq — 3,774.34 -40.68 -1.07%The S&P/TSX composite index dropped 103.88 points to 12,735.12 and now has lost ground in three of the last four sessions, while the Canadian dollar was ahead 0.05 of a cent to 96.84 cents US amid widespread U.S. dollar weakness.The slide came as a partial U.S. government shutdown moved into a third day with no signs of an end, raising worries that the budget impasse over government funding will collide with the Oct. 17 deadline when the U.S. hits its debt limit. At that time, the government will start to run out of cash and could default on its debts.U.S. indexes also racked up losses as the U.S. Treasury Department warned Thursday that the economy could plunge into a downturn worse than the Great Recession five years ago if Congress fails to raise the federal borrowing limit and the country defaults on its debt obligations. The Treasury’s report says a default could cause the U.S. credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket.The Dow Jones industrials fell 136.66 points to 14,996.48, the Nasdaq was 40.68 points lower at 3,774.34 and the S&P 500 index gave back 15.21 points to 1,678.66.“It’s a really tricky situation and this could drag on a lot further,” said Gareth Watson, vice-president investment management and research, at Richardson GMP Ltd.“The way the right is spinning this shutdown right now is that it is just a mere shutdown of a few national parks, it’s not a big deal. And yeah, the first day is not a big deal, the second day is maybe more of a deal but not a big deal but once you get to the next week, I think tempers will start to flare.”Hopes had been high earlier in the week that Republicans and Democrats would come to a last-minute agreement prior to midnight Monday to avoid the shutdown, and then that the withdrawal of some services would be short-lived.At issue is the Affordable Health Care Act, or Obamacare, which the Republicans oppose.Republican House Speaker John Boehner has said that curbing the health-care overhaul that President Barack Obama pushed into law three years ago remains part of the price for ending the shutdown. Traders are concerned that price tag will also apply to raising the debt ceiling.Meanwhile, The New York Times reported that Boehner had told his party that he’s determined to prevent a federal default and is willing to pass a bill raising the debt limit with both Republican and Democratic votes.The metals and mining sector led decliners, down 2.62% as December copper lost five cents to US$3.27 a pound. First Quantum Minerals (TSX:FM) ticked 76 cents lower to C$17.85.The tech sector also weighed on the TSX with BlackBerry (TSX:BB) down 30 cents, or 3.63%, to $7.97. BlackBerry says its latest device will arrive in Canada later this month, but it won’t have the full support of Rogers Communications (TSX:RCI.B), which has decided not to stock the new device.The industrials group was down 0.8% as Canadian Pacific Railway (TSX:CP) fell 98 cents to $128.78.Telecoms also weighed with BCE Inc. (TSX:BCE) down 41 cents to $43.51.The energy group was down 1.12% as November crude on the New York Mercantile Exchange was down 79 cents to US$103.31 a barrel. Canadian Natural Resources (TSX:CNQ) lost 45 cents to C$31.78.The gold sector was off about 1.4% as December bullion faded $3.10 to US$1,317.60 an ounce. Barrick Gold (TSX:ABX) was down 35 cents to C$18.67.In other corporate news, Valeant Pharmaceuticals International Inc. (TSX:VRX) was ahead $1.53 to $114.91 after it said the U.S. Food and Drug Administration has approved a new Bausch + Lomb disposable contact lens sooner than expected. Bausch + Lomb was acquired by Valeant for about US$8.7 billion in August. TOP STORIES‘Potential to be catastrophic’: U.S. Treasury warns debt default could plunge America into worst recession since Great DepressionToronto home sales are soaring — with no sign of stoppingTesla fire that sent its stock into a skid started in the batteryWhy U.S. uncertainty could mean ultra-low rates for years — or even ‘decades to come’Changing of the guard at Agrium as Chuck Magro replaces Mike Wilson at the helmWHAT’S ON DECK FRIDAYECONOMIC NEWSCANADA10 a.m.Ivey Purchasing Managers’ Index (Sept): Economists expect a reading of 53, up from last month UNITED STATESThe U.S. employment report for September will not be released as scheduled Friday due to the government shutdown. A new release date has not been set. CORPORATE NEWSCANADABauer Performance Sports Ltd Q1 earnings: Analysts expect 64¢ a share read more

Canadian stocks lower Allergen again rejects Valeant takeover

Canadian stocks were lower Tuesday amid news that the board at Botox-maker Allergan has unanimously rejected an improved takeover offer by Quebec-based Valeant Pharmaceuticals.The S&P/TSX composite index fell 5.76 points to 14,865.45.The Canadian dollar was almost unchanged, up slightly by 0.02 of a cent to 91.70 cents USAllergan says Valeant’s offer undervalues the California-based company and creates significant risks and uncertainties for its shareholders.Earlier this month, with the backing of activist shareholder Bill Ackman, Valeant (TSX:VRX) raised its stock-and-cash bid to about US$180 per share, valuing Allergan at more than US$54 billion.Allergan repeated its claim that Valeant’s has an unsustainable business model that relies on “serial” acquisitions and cost reductions, as opposed to revenue growth and operational excellence. Shares in Valeant were up 32 cents, or 0.23 per cent, to $138.35 on the Toronto Stock Exchange.Meanwhile, Wall Street mostly took back some gains, as the Dow Jones industrials dropped 21.87 to 16,921.23, the Nasdaq gained 0.48 of a point to 4,336.72, while the S&P 500 index dipped 2.48 points to 1,948.79.Investors are digesting news from China overnight that showed inflation has risen to a five-month high of 2.5 per cent in May, driven by higher food prices.The Chinese government reported that inflation is still is below the ruling Communist Party’s 3.5 per cent target for the year, leaving room for interest rate cuts or other measures to stimulate the slowing economy if needed. May inflation was up from the previous month’s 1.8 per cent, boosted by a 4.1 per cent rise in food prices.Chinese economic growth slowed to 7.4 per cent in the three months ended March 31 from the previous quarter’s 7.7 per cent. Other indicators suggest growth might slow still further in the current quarter.Equities markets have been optimistic in recent sessions as signs indicate that global economies are faring well, or central banks were poised to pump more stimulus to ensure they do.Last week, the European Central Bank announced that it was going to deal with the threat of deflation and give some lift to a tepid economic recovery in the eurozone by cutting its lending rate to 0.15 per cent from 0.25 per cent and dropping its overnight deposit rate to minus 0.1 per cent from zero.There’s also been signs of strong first quarter growth in Japan, an improvement in China’s exports and a solid U.S. jobs report for May.Meanwhile, in Canada, a survey by international human resources firm Manpower Inc. suggests about 20 per cent of Canadian companies expect to add to their payrolls in the third quarter.But when factoring in seasonal variants, Manpower says that figure falls to 10 per cent. Overall, four per cent of firms that expected to shed workers in the July-September period.No other Canadian economic releases are scheduled for Tuesday.Commodities were mostly higher as the July crude contract on the New York Mercantile Exchange was up 24 cents to US$104.65 a barrel. August bullion rose $7.30 to US$1,261.20 an ounce and July copper was unchanged US$3.05 a pound. read more

SPTSX highlights

Closing TSX index: Open 15,790.46 Close 15,807.17 Low 15,790.46 High 15,828.86 Change +64.97 Volume 249,037,403 Value 4,420,586,632

Many feared killed in tragedy

A number of civilian vessels are also on the way to the area. Mr O’Callaghan said it was likely the bodies would be taken to Christmas Island and Western Australia might become responsible for a coronial inquiry. “We have grave fears for the remainder,” he told reporters. Indonesia’s search and rescue authority BASARNAS is co-ordinating the search with the Australian Maritime Safety Authority (AMSA).AMSA confirmed there are definitely survivors but was unable to give numbers.The Australian mission involves Defence aircraft equipped with life rafts, a Customs maritime surveillance aircraft, and two Armidale class patrol boats, HMAS Larrakia and Wollongong. The External Affairs Ministry in Sri Lanka told the Colombo Gazette that its missions in Australia and Indonesia were also monitoring the situation.Up to 200 people were on board the vessel, which was on its way from Sri Lanka to Australia. Australian Home Affairs Minister Jason Clare is being briefed and may make a statement later on Thursday night, Sydney Morning Herald reported.Prime Minister Julia Gillard is likely to discuss the situation with Indonesian President Susilo Bambang Yudhoyono at a breakfast event they are both attending in Rio, Brazil, on Thursday. Several of the people on a boat believed to have been carrying mostly Sri Lankans which capsized off Christmas Island in Australia today are believed to have been killed.The Sydney Morning Herald quoted West Australian Police Commissioner Karl O’Callaghan as saying about 40 people were spotted on the upturned hull, others were in the water and up to 75 others may be dead. read more

Five Sri Lankan fishermen arrested in India

Coast Guard sources said the fishermen’s boat had developed a technical snag resulting in draining of fuel. Five Sri Lankan fishermen on board a mechanised boat were arrested by the Coast Guard after they were found in Indian waters south east of Nagapattinam on Thursday, The Hindu newspaper reported today.The Coast Guard ship ICG Anand, which was on patrol, found the Sri Lankan fishermen and detained them along with their boat. As a result, the boat drifted towards the Indian waters. The fishermen were brought to Karaikal where they were interrogated by the Coast Guard officials before being handed over to the Coastal Security Group of the State police for further inquiry. Police sources gave their names as B.Kithisre (44), I. Iymadhava (33), W.A. Sujeet Piyandha (44) E. Magesh Kumar and D.W.Lahiru Romesh (23). They hailed from Mattara and Trincomalee.The Vedaranyam Marine Police arrested the fishermen and booked a case against them under the Maritime Zone India (Regulation of Fishing by Foreign Vessel) Act. read more

Police use teargas to disperse students protesting against SAITM

The police uses tear-gas to disperse students who protested against the SAITM private medical college in Malabe.The students staged a walk towards Fort but were prevented from heading towards the Presidential Secretariat at Lotus Road. However the students attempted to break the police barricade and move forward and the police then fired tear-gas and water to disperse the protesters. (Colombo Gazette)

South Korea to expand economic cooperation with Sri Lanka

Samaraweera said that Yun’s visit is historic and timely as he is the first South Korean top diplomat to visit Sri Lanka in 31 years. He announced that his Government will hand over a sum of 200,000 dollars to Sri Lanka as humanitarian aid for Sri Lanka’s ongoing drought situation. (Colombo Gazette) He expressed his Government’s deep appreciation at the announcement by the Republic of Korea to increase its economic cooperation with Sri Lanka from 300 million dollars to 500 million dollars within the next three years.“I appreciate the financial assistance given to us by the Republic of Korea,” Samaraweera said. South Korean Foreign Minister Yun Byung-se said that his country will expand economic cooperation with Sri Lanka from 300 million dollars to 500 million dollars over the next three years, the Xinhua news agency reported.Yun, who arrived in Sri Lanka earlier in the day, held bilateral discussions with his Sri Lankan counterpart Mangala Samaraweera during which both sides agreed to further strengthen ties in several areas. “I am confident that the visit by the minister will further enhance the relations between our two countries and pave the way for stronger ties in all spheres of cooperation,” he added.For his part, Yun said the South Korean Government has agreed to facilitate Korean companies to engage ininfrastructure projects in Sri Lanka so that it would help Sri Lanka’s national rebuilding efforts.Yun said the two countries were planning to hold commemorative events to mark the 40th anniversary of diplomatic relations this year and facilitate the exchange of high-level visits. While addressing the media after the meeting, Samaraweera said that the Governments of the Republic of Korea and Sri Lanka have agreed to further strengthen ties in trade and investment. read more

Official appointed to look into issues of Welikada female inmates

The inmates had demanded that their concerns be looked into, including delays to hear their cases. (Colombo Gazette) An official has been appointed to look into the issues faced by female inmates of the Welikada prison, the Justice and Prison Reforms Ministry said.The official was appointed after several female inmates launched a protest on the roof of the Welikada prison yesterday.

Government insists Sri Lanka has not agreed to hybrid court

“Our Government never submitted a proposal to create a hybrid court in Sri Lanka,” Dr. Harsha de Silva said. He said that Prime Minister Ranil Wickremesinghe had also made this clear to Parliament in 2017. Sri Lanka has not agreed to establish a hybrid court to investigate human rights abuses related to the war, the Government insisted today.Economic Reforms and Public Distribution Minister Dr. Harsha de Silva told Parliament today that Sri Lanka has made it clear that only local judges will be involved in the domestic accountability process. Dr. Harsha de Silva said that the Resolutions cosponsored by Sri Lanka in 2017 and this year did not propose a hybrid court.The Minister also said that Sri Lanka has not agreed to prosecute anyone before the International Criminal Court. Dr. Harsha de Silva said that the joint opposition is making false claims as this year is election year.He said that politicians must understand that this country belongs to all Sri Lankans and the rights of all Sri Lankans must be protected. (Colombo Gazette) read more

Mahason Balakaya leader Amith Weerasinghe remanded

Mahason Balakaya leader Amith Weerasinghe, who was arrested by the Police yesterday, was today ordered to be remanded till May 28.Weerasinghe was arrested over an incident reported from Theldeniya. Amith Weerasinghe had instigated attacks on Muslims in parts of Kandy last year.He had also attempted to stage a protest in Kandy on Saturday but a court order was issued against the protest. (Colombo Gazette)