Oh, bummer!
I'm not sure what the exact rules are with your daycare - or how sick your kiddies get with their colds, but my DDs daycare centre will take kids with a runny nose, as long as the child seems "themselves", and doesn't have fever, barking cough etc etc...
I think they figure that if you stopped every child who came with a runny nose there would never be any kids there!

I would just see how he is - if the cold doesn't bother him, phone the daycare centre and check what their policy is.

Don't know how you can break it to them otherwise - maybe arrange to go somewhere special that day (to a park/beach?) to distract them? Or buy some stickers from a $2 shop, and have an arts and craft morning?

Good luck!