Manulife interested in AIG’s Asian life insurance unit

Source: The Canadian Press

Malcolm Morrison

The Toronto stock market headed for a weak open amid lower oil prices after the U.S. Federal Reserve sounded a cautionary note about the economic rebound in the world’s biggest economy.

The Canadian dollar was down 0.39 of a cent to 95.89 cents US.

New York futures were also lower after the Fed suggested the U.S. economic recovery is uneven and vulnerable to turmoil in the markets. The central bank made the comment Wednesday as it also left its key interest rate at an historic low of zero to 0.25% push the economy out of recession.

The Dow Jones industrial futures were down 68 points to 10,171, the Nasdaq futures declined 17 points to 1,856.75 and the S&P 500 futures lost 8.9 points to 1,078.5.

The August crude contract on the New York Mercantile Exchange lost 57 cents to US$75.78 a barrel after the Energy Information Administration said Wednesday that oil supplies increased by two million barrels last week, while analysts were expecting stockpiles to drop.

Gold was lower with the August bullion contract on the Nymex down $1.70 to US$1,233.10 an ounce while July copper was up two cents to US$2.95 a pound.

Stock markets finished little changed Wednesday after the Fed said that “financial conditions have become less supportive of economic growth.” It cited what it called “developments abroad” but didn’t mention by name debt-laden Europe, where shaky government finances have threatened to nip the continent’s recovery from recession in the bud.

The investor mood was further darkened by data showing that new home sales dropped by 33% to a record low last month.

Later Thursday morning, investors will take in the latest data on U.S. durable goods orders, which are expected to have fallen during May.

In Asia, economic news on Thursday was relatively more upbeat — with Japan reporting continued growth in exports for May, driven by demand from within the region — but couldn’t stop most markets reversing course after early gains.

Japan’s benchmark Nikkei 225 stock index edged up 0.1% after exports rose for a sixth straight month as brisk global demand for cars and high-tech products helped shore up a recovery in the world’s second-largest economy.

Australia’s S&P/ASX 200 retreated 0.1% amid news that Australian Prime Minister Kevin Rudd had been dumped as leader by the ruling party and replaced with his deputy.

Elsewhere, Hong Kong’s Hang Seng fell 0.6% and the Shanghai Composite Index gave up 0.1%.

London’s FTSE 100 index lost 0.87%, Frankfurt’s DAX was down 1% and the Paris CAC 40 lost 1.18%.

In corporate news, Manulife Financial’s chief executive says the company is interested in picking up the Asian life insurance unit of U.S. insurer AIG. The comment from Don Guloien comes after a US$35.5-billion deal for American International Assurance Ltd. to be taken over by Prudential PLC fell apart.

He added that “people can be comfortable, though, that we would not be approaching that deal at any price approaching $35.5-billion.”

Goldcorp Inc. of Vancouver (TSX:G) says there’s “no basis” for closing its Marlin mine while the Guatemalan government conducts what it calls an “administrative process” to deal with allegations that the rights of local people have been violated. The Vancouver-based miner says the Guatemalan government agrees that studies by several of its ministries have found no evidence the mine has contaminated the water supply or caused disease.

Niko Resources Ltd. (TSX:NKO), a junior Canadian oil and gas company with operations around the world, reported a quarterly profit of $38.7-million. The net income amounted to 76 cents per diluted share and compared with a net loss of $3.1 million or six cents per share in the fourth quarter of fiscal 2009. Revenue was up more than fourfold, rising to $110.6 million.