U.S. stock futures were pointing to a lower open Monday as Moody’s Investors Services said it could lower bond insurer credit ratings because of subprime losses.

Moody’s warned late Friday that AAA ratings of four leading bond insurers could be downgraded after the agency re-evaluated the companies’ exposure to potential subprime mortgage losses.

Meanwhile, former U.S. Federal Reserve Chairman Alan Greenspan warned on Sunday in televised interviews of the spectre of stagflation and said there was a 50-50 chance of a U.S. recession.

In today’s economic news, non-residents investors reduced their holdings of portfolio Canadian shares by a record $23.4 billion in October, having sold shares to foreign direct investors for a considerable amount, Statistics Canada reported.

Meanwhile, with the Canadian dollar near its record high, residents looked abroad for investment opportunities in October, buying $4.8 billion worth of foreign securities.

Separately, StatsCan reported that sales of new motor vehicles declined again in October, although not as sharply as in September. Seasonally adjusted data from the New Motor Vehicle Sales Survey show that 137,501 new vehicles were sold in October. That’s 1.4% fewer vehicles than were sold in September.

In M&A news, Ingersoll-Rand said it plans to buy Trane for US$10.1 billion, or roughly US$47.81 a share.

Aon said it’s going to sell its Combined Insurance Co. to Ace Ltd. for US$2.4 billion in cash. Aon will use most of the proceeds to buy back $2.6 billion in stock.

Separately, Munich Re is buying Sterling Life for US$350 million.



Gold futures fell US$4.40 to US$793.60 an ounce, while crude-oil futures dropped 72¢ at US$90.84.


The Toronto stock market closed lower Friday, as resource issues slumped, and U.S. inflation data cast doubt on the likelihood of further interest rate cuts.

The S&P/TSX composite index was down 73.02 points, or 0.53% to close at 13,674.23.

For the week, the benchmark index dropped 1.4%.

The junior S&P/TSX Venture composite index fell 2.29 points, or 0.08%, to 2,692.34.

The Canadian dollar edged up 0.03 of a cent to close at US98.33¢.

In New York, stocks tumbled on the larger-than-expected jump in U.S. consumer inflation.

The Dow Jones industrial average lost 178.11 points, or 1.32%, shutting down at 13,339.85. The S&P 500 dropped, falling 20.46 points, or 1.37% to 1,467.95. The Nasdaq composite index also fell 32.75 points, or 1.23%, to 2,635.74.

For the week, the Dow was down 2.1%, the S&P was down 2.5% and the Nasdaq was down 2.6%.