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I’m a bit intimidated entering IBM’s research center in Hawthorne, New York. After all, the company’s sales totaled $104 billion…yes, billion…last year.

So not only am I traveling into the heart of one of largest tech companies in the world, but I’m about to face off against Watson, the natural language processing system that is due to appear on the television quiz show "Jeopardy!" some time next year.

The sprawling complex is filled with rooms assigned generic numbers, separated by swaths of black, gray and blue-colored carpets. A quick right turn out of the elevator puts me in front of Lab 2SG85.

The lab is shoddier than I would have expected — paneled walls, rickety desks and low ceilings with florescent lights, like it hadn’t been updated since the 1970s.

In the small room where I’ll be battling wits with Watson, there’s a glowing red emergency electrical shut-off switch on the wall. (HAL, anyone?) There are algorithms scribbled on a white board that show how Watson arrives at a particular response.

The presentation, set up by IBM researcher David Ferrucci, isn’t working. Ferrucci, who also heads up the Watson team, neglected to plug the projector into his ThinkPad laptop.

"You’d think we’d be wireless by now," he quips.

He plugs the projector in, and a Jeopardy! board pops up on the screen.

Alright. Ready to go. Finger on the buzzer. Watson picks geography for $400.

This should be easy, I’m thinking.

"Eighty percent of Algeria is covered by this desert."

I know this one! I buzz in quickly.

"Player two, Watson."

Huh?

"What is Sahara?" says the computer’s simulated voice.

Too fast for me.

How Watson works. The computer and software system, named after Big Blue founder Thomas Watson, marks an impressive big step on the path toward being able to talk with computers.

Interestingly, the researchers did not load Watson up with countless databases, but rather taught it to search through text, and use context to "understand" how words relate to each other. For example, talking about a character in a novel is vastly different from talking about someone’s personal character.

To get an answer, the computer considers many factors, from simple keyword matching and arithmetic, to complex, often ambiguous solutions like metonymy (substituting one concept for another, related one), and statistical paraphrasing ("Big Blue" is the same thing as "IBM").

Watson is able to do this in a fraction of a second because the program’s hardware is an IBM Blue Gene/P — one of the fastest super computers on the planet.

That doesn’t mean it has all of the bugs worked out — it responded with "Barbara Streisand" to the Jeopardy! answer "This Ziegfeld star was portrayed in the film ‘Funny Girl cash loans till payday.’" It was close, but the correct response is Fanny Brice. Streisand played Brice in the film. (It’s okay, Watson, I didn’t know the answer either.)

The other reason why IBM didn’t just load Watson up with data is because it wants the technology to be accessible to any person or company looking for quick answers.

Watson, coming to a business near you. The possibilities for commercial use of the technology would seem endless. If Watson can answer complex Jeopardy! questions, then perhaps it could help doctors treat patients, bankers mitigate risk or consumers plan a dinner menu at a grocery store.

"The scalability of Watson combined with IBM’s drive toward cloud computing could result in everything from answering children’s queries to doing crisis management," said Richard Doherty, research director for the Envisioneering Group, which does some consulting for IBM. "Watson is going to be deployed, and not just to the Warren Buffetts and Bill Gateses of the world — mom & pop shops will be able to use it too."

IBM (IBM, Fortune 500) certainly seems to thinks so.

"The future of Watson is to get it embedded in IBM’s solutions and products to help customers deal effectively with unstructured content," said Ferrucci.

Experts agree, saying that Watson has the capability to help a broad range of customers.

Near universal access to Watson would, on the surface, seem unlikely, given the fact that few businesses have the wherewithal to buy the super computer it takes to run the program. Furthermore, Doherty estimates that the project costs roughly 5% to 10% of IBM’s entire $6.3 billion R&D budget each year, putting Watson’s three-year development price tag at roughly $900 million to $1.8 billion.

That’s where cloud computing, or software as a service, comes in.

Doherty believes that IBM will be able to open up Watson’s capabilities to all types of businesses and consumers by offering Watson on a kind of "time share." Got a question for Watson? Let IBM know, and for $100 per minute of use, they’ll give you the answer.

And some businesses and agencies may want the whole thing to themselves. For instance, the U.S. Department of Energy is currently using a Watson test model for weather prediction.

Though competing on "Jeopardy!" will be challenging for IBM, it will also allow it to showcase Watson’s capabilities for potential customers. Though IBM was reluctant to give a timeline, experts say Watson could be deployed as early as 2011. 

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The deterioration of the Manhattan office availability rate slowed in the second quarter, signaling the worst may be over for the market, real estate services company FirstService Williams said in a report.

Although the Manhattan office market’s total availability rate — which includes vacant space plus space scheduled to become available within a year — rose to 13.4 percent in the second quarter from 12 percent in the first, the increase slowed significantly in the latter half of the quarter, according to the report released to Reuters on Sunday.

That could help major Manhattan landlords such as SL Green Realty Corp, Vornado Realty Trust, Boston Properties Inc and Brookfield Properties.

During the second quarter an additional 4.7 million square feet of office space was put on the market, surpassing the 3.9 million square feet that hit the market in the first quarter.

The 13.4 percent availability rate is still below the last cycle’s peak of 14.5 percent reached in the first half of 2003.

The firm, which monitors space changes on a weekly basis, said the rise in the availability rate in the first half of the second quarter was essentially a continuation of the first quarter as demand for space weakened rapidly.

That changed during the latter half of the second quarter as the net total of available space added to the market noticeably slowed affordable car insurance.

“The availability data for the second half of the second quarter of 2009 portray a substantially different picture about the pace and direction of activity than what was observed in both the first half of the quarter or in the first quarter of 2009,” Mark Jaccom, FirstService Williams chief executive, said in a statement.

Net additions to the supply of space in the latter half of the second quarter were about half the level seen a month earlier Jaccom said.

“As the quarter ended, we also found that firms that earlier were not even beginning the decision making process quickly shifted and ramped up their search activity,” he said.

Earlier this month, CB Richard Ellis Group Inc, said that asking rents had fallen 28 percent in Midtown Manhattan, a big enough drop to show a re-pricing of leasing terms and signaling the approach of a market bottom.

At the Reuters Global Real Estate Summit last week, commercial real estate experts said that adding in months of free rent and tenant improvements, rents had fallen about 50 percent.

(Reporting by Ilaina Jonas; Editing by Phil Berlowitz)

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At phone operator Movistar’s sales offices in Buenos Aires, customers line up to buy high-speed wireless services to access the web on their mobile phones. Most Argentines don’t realize, though, that the company providing the gear for their broadband connections isn’t a longtime supplier to Latin America like Alcatel-Lucent, Ericsson, or Motorola, but a relative newcomer called Huawei.

China’s telecom suppliers are coming to the Americas. Pursuing the same formula they’ve used to win business throughout Asia and parts of Africa (selling cheap gear in low-income countries), equipment makers Zhong Xing Telecommunication Equipment (also known as ZTE) and Huawei are now getting a foothold in countries such as Argentina, Chile, and Colombia. Says Leandro Musciano, project director at Movistar Argentina, a unit of Spain’s Telef

Rx: Health reform.

Warning: Headaches may result from trying to figure out what’s going to come out of the debate on Capitol Hill.

The proposals under consideration are incomplete. But the rhetoric is rich. So if you’re having a hard time making sense of it all, we hope this will help.

Here are 5 common concerns about overhauling the health care system and what we know … so far.

• Would a public plan hurt private insurers?
• Would a public plan kill employer coverage?
• How much would health reform really cost?
• Can we afford not to do health reform?
• Would reform improve my health care?

Would a public plan hurt private insurers?

President Obama and Democratic leaders have proposed setting up a national insurance exchange. The exchange would serve as a supermarket of plans and let consumers comparison shop for the policy that best suits their needs.

The majority of Americans are insured through their employers’ plans. Several reform proposals under consideration would impose a "pay or play" requirement on many businesses.

Much will depend on how a "pay or play" mandate is set up instant payday loans.

"If the cost of paying [into the exchange] is high enough, employers are more likely to play," Williams said. Conversely, if it’s low enough, it may make more financial sense to drop coverage and send employees to the exchange to pick their own plan.

How much would health reform really cost?

Preliminary estimates have placed the cost in the $1 trillion range. But that’s based on estimates of discrete portions of proposals. The real estimated cost of reform will depend on how all portions of the final plan are expected to interact with each other.

There’s a lot of disagreement over how to reform health care. But there is agreement that something must be done to curb the growth rate in health care costs.

Hard to say.

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China on Wednesday rejected U.S. and European charges that its restrictions on raw materials exports violate international trade rules, saying that its policies were in keeping with WTO regulations.

The European Union and the United States said on Tuesday they were taking a complaint to the World Trade Organization over China’s export curbs on some industrial raw materials used in steel, cars, microchips, planes and other products.

By arguing that the export taxes and quotas keep a lid on Chinese firms’ costs, the WTO complaint takes the view that they are essentially a subsidy and distort competition for chemical, steel and non-ferrous metal producers outside China.

The latest WTO case comes as Washington and Brussels look for China’s cooperation in pulling the world economy out of a slump. It could add to recent friction over military modernization, Internet controls and United States’ own economic policies.

“The main objective of China’s relevant export policies is to protect the environment and natural resources. China believes the policies in question are in keeping with WTO rules,” the Ministry of Commerce press office said in a mildly-worded response.

“Following the WTO procedures for dispute resolution, China will appropriately handle the request for consultations.”

The case is an unusual one, since most WTO complaints argue that a country restricts imports through taxes or other barriers, or otherwise subsidizes or protects domestic firms. Export taxes or quotas are thus rarely a concern.

China’s massive industrial overcapacity, its low labor costs and efficient infrastructure mean that Chinese goods are spilling out into world markets, threatening profit margins, jobs, and the very existence of some sectors in Europe and the United States affordable health insurance for seniors.

The complaint does not name other items on which China also imposes export taxes, for example steel products or semi-finished aluminum, which it would otherwise export in even greater amounts, at lower prices.

China’s reasons for restricting exports are varied. They stem from an effort to limit unbridled expansion in hot sectors, often by private companies, that has strained electricity supplies, added to rampant pollution, driven up the cost of raw materials and ruined profits for more established Chinese firms.

Chinese officials argue that the export restrictions, which are tweaked regularly, help stabilize supply to world markets.

THE CASE FOR THE Defense

China is likely to defend itself by turning the spotlight on similar restrictions by other countries, as well as by arguing that there is no violation, said an official who advises the Ministry of Commerce on WTO strategy.

“China will strongly question the motive of this case,” the official said.

“A lot of countries have this type of export restriction, for instance restrictions on the export of raw logs, allowing only processed wood to be shipped instead.” 

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The recession began in December 2007. Did it end sometime this spring?

It’s a provocative question that’s tough to answer. It’s tempting to say the recession is over when that seems to be what the stock market is telling us.

But Wall Street hardly has a perfect track record: There were numerous bear market rallies during the Great Depression, for example.

Stocks also enjoyed a nice run last spring after Bear Stearns almost imploded, even though the collapses of Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500), Lehman Brothers and AIG (AIG, Fortune 500) were still yet to come.

"With all due respect to Mr. Market, it is highly fallible as a forward looking barometer," said David Rosenberg, chief economist & strategist at Gluskin Sheff + Associates, a Toronto-based wealth management firm.

The bear case: ‘Less bad’ does not equal good

The jump in stocks also poses another chicken-versus-egg question: Is the market rallying because people think the recession is over or do people think the recession is over because the stock market is rallying?

If it’s the latter, that’s not necessarily great news. Rosenberg said he thinks it’s "beyond bizarre" to say the recession is over. The economy may have pulled out of the free fall that took place from September through February, he said, but that shouldn’t be confused with a bottom.

"We’re still in a recession. Are we past the worst point of it? 100% yes. But is the downturn over? It’s far too premature to make that assessment," he said.

Talkback: Is the recession over? If so, why do you think that’s the case? If not, when will it finally end? Leave your comments at the bottom of this story.

Jim Keegan, chief investment officer of Seix Investment Advisors, which manages the RidgeWorth Intermediate Bond fund, agreed that the recession may not be over yet. He said that even though the pace of decline may be slowing, it’s still a decline.

"The green shoots everybody’s talking about look more like dandelions. ‘Less bad’ is not good," he said.

The bull case: The decline is slowing

But Liz Ann Sonders, chief investment strategist with Charles Schwab & Co., believes that the recession ended sometime in the past two months and that the market is doing what is usually does, heading higher before it’s common knowledge that the economy is recovering.

Sonders noted that the Leading Indicators Index, a report that looks at consumer goods orders, stock prices, building permits and seven other key economic data points, rose sharply in May for the second consecutive month.

The report, released Thursday, showed a 1.2% increase last month, following a 1.1% rise in April. Sonders thinks this is significant because it’s the largest two-month consecutive jump since November and December 2001 — the first two months that followed the end of the 2001 recession.

Dan North, chief U.S. economist with Euler Hermes, a leading credit insurer, said he’s encouraged by signs of life in the housing market.

"You have record affordability with home prices and even though people are wringing their hands about mortgage rates rising lately, they are still historically cheap," he said.

North added that he thinks the decision by homebuilder Pulte Homes (PHM, Fortune 500) to buy rival Centex (CTX, Fortune 500) in April could be a sign of a bottom in housing since it could represent renewed confidence.

Kathy Lien, director of currency research at GFT, a foreign exchange and futures brokerage firm, also thinks that the recession has just about run its course.

She said that declines in the average number of jobless claims from their peak a few months ago is an encouraging sign, as are reports of improving home sales and stabilization in the manufacturing sector cash advance no faxing.

"There are signals indicating that the areas of the market that suffered the most in the recession are turning around, such as housing, manufacturing and the labor markets," she said. "All this, in combination, sends a strong message to us that the worst is behind us."

Housing and jobs key to recovery

Still, Rosenberg counters that the labor and housing markets remain weak and should stay so for the foreseeable future.

He notes that jobless claims may only be declining because of the surge in the number of people who have exhausted their unemployment benefits. Plus, the unemployment rate has continued to rise sharply in recent months.

And even though many economists point to unemployment as a so-called lagging indicator — i.e. it probably won’t peak until after the recession is over — Rosenberg disagrees. In many previous recessions, especially those led by downturns in business spending, it was true that the broad economy could recover before the job market.

But Rosenberg said this is a different kind of recession since it was caused by a credit bubble. So he believes that unemployment is no longer a lagging indicator, but one that is coincidental and perhaps even leading.

"There is a perfect link between unemployment and consumer delinquencies," he said.

He added that home sales may be improving, but prices continue to fall in many markets. He is also worried that rising unemployment could cause many borrowers who have so-called alt-A loans that are about to reset to default on their mortgages.

"We’ve got another leg down in housing and foreclosures. We need stabilization in home prices and the unemployment rate and we might be a year away from that," he said.

Who cares when it ends? When will we feel better?

Of course, the debate about whether the recession is or isn’t over should not overshadow the fact that the whole notion of a recession is largely a case of semantics.

Contrary to popular belief, a recession is not defined as two consecutive quarters of declines in the nation’s gross domestic product; a group known as the The National Bureau of Research makes the official call on recessions by looking at various economic trends beyond GDP.

And the NBER is notoriously slow in deciding when recessions begin and end. It didn’t declare until July 2003 that the 2001 recession ended in November of that year. The NBER also waited until last December to announce that the current recession started in December 2007.

Sot his might be a more important question to ask: When will the economic pain actually end?

Sonders conceded that even though she thinks the recession is over, she’s not a blind-eyed optimist. "I’m not telling clients to do anything differently. It doesn’t feel great now. I understand that."

Lien also said that no matter what happens on Wall Street, it’s not going to look good on Main Street for a while longer.

"There’s a big difference between the recession being over and increased growth. It’s probably going to be a slow, painful recovery," she said.

With that in mind, it may not really matter all that much when the NBER says the recession is over.

"The end of the recession won’t be like a hammer hitting you in the head," North said. "There are signs that the economy is turning the corner but it won’t feel good for months and months yet. If you don’t have a job, you don’t care if GDP is going up. You care that you don’t have a job."

Talkback:What do you think? Is the recession over? If so, why do you think that’s the case? If not, when will it finally end?  

Source

A quarter of U.S. employers have eliminated matching contributions to employee 401(k) retirement plans since September to save money amid the economy’s downturn, according to research released on Monday.

A quarter of U.S. employers also have instituted limited enrollment rather than open the savings plans to all employees, according to the study conducted for Charles Schwab Corp. by CFO Research Services.

Although the study showed 23 percent of companies have eliminated 401(k) matching contributions, most see the move as temporary, said Steve Anderson, who heads Retirement Plan Services at Charles Schwab, a financial services provider.

“Most view that as a temporary step. They don’t see that as a long-term approach,” he said.

Workers with 401(k) plans have seen their savings hit hard in the recession. A 401(k) account allows workers to defer taxes on some income and typically put the money in a mix of stock and bond mutual funds and other investments.

Companies often match all or part of employee contributions cheap business cards.

Asked to identify the most important feature of their company’s 401(k) plans, 87 percent of those polled said it was the company’s match, the Schwab study said.

Second most important was providing employees access to 401(k) investment advice, the study said.

Of the 107 human resource and 112 senior finance executives polled, 63 percent said employee concerns over personal finances are creating a more difficult work environment.

The online survey was conducted in March and April among executives at companies with revenues ranging from $100 million to more than $10 billion in a cross-section of industries.

More than half of the respondents worked for companies with more than 1,000 employees eligible for participation in their 401(k) plans. A statistical margin of error was not immediately available.

(Reporting by Ellen Wulfhorst; Editing by Jackie Frank)

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Britain will fight proposals today to lash London’s banks to European Union oversight, deepening the EU divide over how to prevent future financial shocks.

At an EU summit in Brussels, Prime Minister Gordon Brown will defend the U.K.’s powers as the sole supervisor of the more than 600 British and foreign banks that make London Europe’s financial center.

“We believe emphatically that we must retain a clear and ultimate linkage between national responsibility for supervision and national responsibility for handling the consequences of failure,” U.K. Treasury Minister Paul Myners said in an interview yesterday in London.

The clash over policing the banks may overshadow a summit meant to take stock of efforts to turn around the worst recession since World War II and to complete work on legal guarantees to persuade Irish voters to pass the bloc’s new governing treaty, which they rejected last year.

European governments have spent more than 165 billion euros ($229 billion) to shore up banks staggering from $454 billion in writedowns and credit losses, about a third of the worldwide total of $1.46 trillion.

The regulatory proposals are Europe’s answer to President Barack Obama’s bid to refashion supervision of the U.S. financial system, the epicenter of the crisis.

Political setbacks at home increase the pressure on Brown to fend off European regulation. Fresh from reshuffling his cabinet and stifling a rebellion within his Labour Party, Brown is trying to reassert his leadership with polls showing him facing defeat in an election looming within a year.

‘Political Reasons’

Britain is holding out “for domestic political reasons, Brown being extremely weak, the Tories waiting to come into power,” said Karel Lannoo, head of the Centre for European Policy Studies in Brussels. “The biggest problem is Britain. I don’t think what they’re doing is in the interest of the future perspective and competitiveness of the City.”

In the battle over financial oversight, Britain says European Commission proposals to stiffen cross-border supervision could force British taxpayers to pay for bailouts or recapitalizations that are ordered by a central regulator payday loans for bad credit.

The proposals would make banking supervision more uniform by giving EU agencies powers to overrule national authorities when there are disputes between countries.

As the largest of the 11 EU countries not using the euro currency, Britain also opposes putting the president of the European Central Bank in charge of a board to monitor systemic risk.

‘Right Direction’

Luxembourg, a country of 400,000 people that relies on financial services for a fifth of its economy, believes the proposals “go in the right direction,” Prime Minister Jean- Claude Juncker said yesterday.

While an outnumbered Britain could be outvoted on the financial proposals, the EU tradition has been to seek consensus ever since French President Charles de Gaulle boycotted EU meetings in 1965.

Chancellor of the Exchequer Alistair Darling signaled Britain’s opposition at a June 9 meeting of finance ministers, who agreed that EU regulators “should not impinge in any way on member states’ fiscal responsibilities.”

The EU goal is to plug regulatory holes that, for example, hastened the demise of Fortis, a bank caught in the crosscurrents of Dutch and Belgian supervision when the financial crisis escalated in October.

Fortis Fight

As the Dutch government bought most of Fortis’s Dutch operations, shareholders initially vetoed a sale of most of the Belgian side to BNP Paribas SA. The sale only went through after six months of wrangling.

Also up for discussion at the two-day summit are proposals that would give authorities power to regulate rating companies and clearing houses for derivatives trading, and impose rules on short-selling in emergencies.

“I would stress that we are on common ground with most other European countries as far as the broad thrust on the need for cooperation, information sharing, European regulation, enhanced standards of supervision,” Myners said.

Source

Britain will fight proposals today to lash London’s banks to European Union oversight, deepening the EU divide over how to prevent future financial shocks.

At an EU summit in Brussels, Prime Minister Gordon Brown will defend the U.K.’s powers as the sole supervisor of the more than 600 British and foreign banks that make London Europe’s financial center.

“We believe emphatically that we must retain a clear and ultimate linkage between national responsibility for supervision and national responsibility for handling the consequences of failure,” U.K. Treasury Minister Paul Myners said in an interview yesterday in London.

The clash over policing the banks may overshadow a summit meant to take stock of efforts to turn around the worst recession since World War II and to complete work on legal guarantees to persuade Irish voters to pass the bloc’s new governing treaty, which they rejected last year.

European governments have spent more than 165 billion euros ($229 billion) to shore up banks staggering from $454 billion in writedowns and credit losses, about a third of the worldwide total of $1.46 trillion.

The regulatory proposals are Europe’s answer to President Barack Obama’s bid to refashion supervision of the U.S. financial system, the epicenter of the crisis.

Political setbacks at home increase the pressure on Brown to fend off European regulation. Fresh from reshuffling his cabinet and stifling a rebellion within his Labour Party, Brown is trying to reassert his leadership with polls showing him facing defeat in an election looming within a year.

‘Political Reasons’

Britain is holding out “for domestic political reasons, Brown being extremely weak, the Tories waiting to come into power,” said Karel Lannoo, head of the Centre for European Policy Studies in Brussels. “The biggest problem is Britain. I don’t think what they’re doing is in the interest of the future perspective and competitiveness of the City.”

In the battle over financial oversight, Britain says European Commission proposals to stiffen cross-border supervision could force British taxpayers to pay for bailouts or recapitalizations that are ordered by a central regulator no fax cash advance.

The proposals would make banking supervision more uniform by giving EU agencies powers to overrule national authorities when there are disputes between countries.

As the largest of the 11 EU countries not using the euro currency, Britain also opposes putting the president of the European Central Bank in charge of a board to monitor systemic risk.

‘Right Direction’

Luxembourg, a country of 400,000 people that relies on financial services for a fifth of its economy, believes the proposals “go in the right direction,” Prime Minister Jean- Claude Juncker said yesterday.

While an outnumbered Britain could be outvoted on the financial proposals, the EU tradition has been to seek consensus ever since French President Charles de Gaulle boycotted EU meetings in 1965.

Chancellor of the Exchequer Alistair Darling signaled Britain’s opposition at a June 9 meeting of finance ministers, who agreed that EU regulators “should not impinge in any way on member states’ fiscal responsibilities.”

The EU goal is to plug regulatory holes that, for example, hastened the demise of Fortis, a bank caught in the crosscurrents of Dutch and Belgian supervision when the financial crisis escalated in October.

Fortis Fight

As the Dutch government bought most of Fortis’s Dutch operations, shareholders initially vetoed a sale of most of the Belgian side to BNP Paribas SA. The sale only went through after six months of wrangling.

Also up for discussion at the two-day summit are proposals that would give authorities power to regulate rating companies and clearing houses for derivatives trading, and impose rules on short-selling in emergencies.

“I would stress that we are on common ground with most other European countries as far as the broad thrust on the need for cooperation, information sharing, European regulation, enhanced standards of supervision,” Myners said.

Source

The Toronto stock market piled on losses for a fourth session today, pressured by commodity stocks on doubts the spring rally has much momentum left.

The main S&P/TSX composite index fell 241.29 points to 10,066.11 as energy and mining stocks continued to retrench after helping boost the Toronto market as much as 40 per cent since the rally began in early March.

In the past four sessions, 648 points or almost 6.5 per cent have been carved from the index and opinion is divided on how much markets more could retreat.

Eric Brass, equity analyst at MFC Global Investment Management, said calling short-term moves in a market like this is next to impossible.

"One thing we do expect, can almost bet on, is we expect the market to remain pretty volatile going forward. So you will see a little bit more ups and downs than actually a set pattern going forward," Brass said.

Today, the energy sector fell 3.5 per cent with the July crude contract on the New York Mercantile Exchange moved up 56 cents at US$71.03 a barrel.

Suncor Inc. (TSX: SU) declined $1.88 to $34.30.

The TSX Venture Exchange moved 23.82 points lower to 1,115.37 while the Canadian dollar reversed direction to move up 0.28 of a cent at 88.42 cents US.

New York markets were mainly flat on economic concerns, a disappointing outlook from FedEx Corp. and a downgrade of 18 banks by ratings agency Standard & Poor's

The Dow Jones industrial average was 7.49 points lower to 8,497.18.

The Nasdaq composite index gained 11.88 points to 1,808.06 while the S&P 500 index slipped 1.26 points to 910.71 after FedEx (NYSE: FDX) said it posted a fiscal fourth-quarter loss and forecast earnings well below analysts' views in the next quarter. Its shares were down 72 cents to $50.70.

Investors also reviewed the White House's plan for remaking the rules that govern Wall Street. The changes would award new powers to the U.S. Federal Reserve and establish a consumer protection agency.

Elsewhere, Standard & Poor's cited concerns that volatility will remain in the financial industry and that banks are expected to face tighter regulatory oversight. The agency also said loan losses could grow beyond what many analysts expect.

Investors also took in news of lower than expected U free credit report and score.S. inflation, lower Canadian wholesale sales and an improvement in an important gauge in future economic activity.

The U.S. Labour Department said the consumer price index increased a seasonally adjusted 0.1 per cent in May, below analysts' expectations of a 0.3 per cent rise.

Statistics Canada said wholesale sales fell 0.6 per cent to $40.3 billion in April.

And the rate of decline of the leading indicator slowed markedly to 0.1 per cent in May, the smallest of nine straight drops.

The base metals sector was a major weight on the TSX, down almost five per cent. Teck Resources (TSX: TCK.B) fell 95 cents to $17.32.

Ivanhoe Mines (TSX: IVN) shares lost 60 cents to $6.28 amid a report that Mongolia's president-elect wants to change a proposed gold and copper mining agreement with that company and Rio Tinto.

Shares in PotashCorp. (TSX: POT) tumbled $12.66 or 10.5 per cent to $108.34 after it said Tuesday it would reduce 2009 production by 800,000 tonnes, but expects demand to pick up in the second half of this year.

Meanwhile, Agrium Inc. (TSX: AGU) said Tuesday that shareholder firm RiskMetrics Group is recommending CF Industries Holdings Inc. (NYSE: CF) stockholders approve its more than US$4-billion takeover of the fertilizer company. Calgary-based Agrium said the deal, which values CF at US$88.20 per share based on Tuesday's closing price, “is far superior to any alternative." Agrium shares dropped $3.76 to $48.49.

After a six-month shutdown, uranium giant Cameco Corporation (TSX: CCO) said today it has resumed production at its Port Hope, Ont. uranium conversion plant. Its shares were down 50 cents to $28.32.

The August bullion contract on the Nymex rose $3.80 to US$936 an ounce and the gold sector drifted 0.3 per cent lower.

The financial sector also gave up ground, down 1.7 per cent with Manulife Financial Corp. (TSX: MFC) down 89 cents to $22.51.

In other corporate news, TransCanada Corp. (TSX: TRP) shares declined $1.69 to $31.37 after it said Tuesday it is buying the remaining stake in the Keystone pipeline from U.S. energy giant ConocoPhillips for $550 million.

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