The Bank of Canada conceded for the first time that the Canadian economy could be headed for a recession, adding that more stimulus and lower interest rates are needed to cushion the steep fall.

Stock markets in Toronto and New York rose sharply higher yesterday after the U.S. government rescued Citigroup Inc. with cash and guarantees, boosting investor confidence and resource prices.

Commodities moved higher and the Toronto stock market followed suit this afternoon amidst a flurry of activity on Wall Street led by the government bailout of Citigroup Inc.

Toronto fund manager Alex Ruus was taken aback when a young broker in Calgary told him the price of oil was heading toward levels not seen in a decade. It was late October, a month marked by a record 35 per cent plunge in the price of crude futures and Ruus was out meeting clients on a routine tour of Canada’s oil capital.

Facing a legal battle that would have illuminated its widening market power, Google Inc. turned its back on struggling rival Yahoo Inc. and pulled the plug on an Internet advertising partnership that had been conceived to keep Yahoo out of Microsoft Corp.’s clutches.

Chemical company BASF SE said Wednesday it is temporarily closing 80 plants worldwide due to slumping demand and cutting production at 100 more, including facilities in Texas and Louisiana. Some 20,000 workers are affected.

Global economic misery spread on Thursday with the Federal Reserve predicting U.S. recession well into 2009, Japan’s exports to Asia falling for the first time in six years and another sharp sell-off on global equity markets.

Best Buy Co Inc. slashed its fiscal 2009 profit forecast Wednesday driven by weak consumer spending trends heading into the crucial holiday selling season.