Month: April 2011

Dear Friends,  There is light at the end of the tunnel for all our amazing accountants out there – the end of the month draws nigh.  I am always so impressed by their tenacity at this time of year, their voices betraying little of the inevitable weariness they must feel after weeks of number crunching….

Today is the anniversary of Mutiny on the Bounty in 1789.  On April 28, 1789, the mutiny on HMS Bounty took place as the crew of the British ship set Capt. William Bligh and 18 sailors adrift in a launch in the South Pacific.  (They of course, survived, and made it back to Britain to report the mutiny.) Attracted by the idyllic Tahitian lifestyle, the mutineers sailed the British Royal Navy Ship to Pitcairn Island, where they burned it offshore in order to avoid detection and to prevent desertion.  There are still descendants of the mutineers and Tahitians living on Pitcairn Island today. 

And speaking of boats, this Saturday is the official opening day of the Royal Victoria Yacht Club – hard to believe sailing season is upon us again.  I was speaking with a client this morning who will be heading down to Colorado in a few weeks to visit a friend she met many years ago on a beach in Tahiti.  The friend and her husband were sailing around the world and they struck up a friendship with my client – thirty years younger than them – and invited her to sail with them for awhile, which she did for five weeks.  My client was describing her friend as being the most amazing 80 year old person she has ever met.  Right now, for example, in her eighties, she is in Africa doing volunteer work!  Isn’t that wonderful?

Royal enthusiasts sleep in their tents in front of Westminster Abbey in London. Revelers are camping outside the Abbey where Prince William and Kate Middleton are due to get married tomorrow, April 29.

Gero Breloer/AP

The pack rides during the second stage, a 171.8 km race from Romont to Romont, at the 65th Tour de Romandie UCI ProTour cycling race in Sedeilles, Switzerland.

Dominic Favre/Keystone/AP

Sprigs of Lily of the Valley, the symbol of Labour Day in France, are seen at the Rungis International food market in Rungis, south of Paris. The sprigs of Lily of the Valley will be rare and expensive next Sunday for Labour Day in France because of an early and too sunny Spring, which has reduced deliveries to wholesalers from between 40 and 50 percent.

Jacky Naegelen /Reuters

Market Commentary:

 Canada

By Matt Walcoff

     April 28 (Bloomberg) — Canadian stocks rose as Canadian National Railway Co. gained for a second day after reporting earnings that topped analyst estimates and natural gas producers advanced as the fuel climbed to a three-month high.

     CN, the country’s largest railroad, rallied 2.4 percent a day after at least 15 analysts boosted their share-price estimates. Encana Corp., Canada’s biggest natural gas producer, rose 2.2 percent after U.S. supplies increased less than most economists had forecast and crude settled at $112.86 a barrel.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, fell 2.8 percent as corn and wheat dropped.

     The Standard & Poor’s/TSX Composite Index rose 1.83 points, or less than 0.1 percent, to 13,894.40. Among S&P/TSX stocks, 131 gained, 112 declined and five were unchanged.

     “People were mostly too bearish with the winter that we got as well as fuel at $113,” Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, which manages about C$18 billion, said of CN. “Investors were too negative about the earnings.”

     The index is poised to end April with its first negative monthly total return including dividends since June, ending the longest streak of gains since 1983. Energy and financial stocks have dropped on data and forecasts indicating the U.S. economic recovery is slowing.

     CN advanced for a seventh day, increasing 2.4 percent to C$73.14 after Norfolk Southern Corp. reported profit that topped analyst estimates. CN raised its own full-year profit forecast on April 26.

     The shares have risen 4.7 percent since April 24, when CN said Microsoft Corp. Chairman Bill Gates’ Cascade Investment LLC has become its biggest shareholder. CN’s seven-day streak of gains is the longest since November 2009.

     Energy companies climbed after the U.S. Energy Department said natural gas supplies increased 31 billion cubic feet last week, compared with the median analyst estimate of 38 billion cubic feet.

     Encana Corp., Canada’s largest natural gas producer, rose 2.2 percent to C$31.42, erasing four days of losses. Nexen Inc., an oil and gas producer with operations on five continents, gained for a sixth day, advancing 3.1 percent to C$24.71.

Canadian Oil Sands Ltd., the largest owner of the Syncrude project, climbed 1 percent to C$31.66.

     Enbridge Inc., Canada’s largest pipeline company, declined 1.8 percent to C$61.23 after Sam Kanes, an analyst at Bank of Nova Scotia, cut his rating on the shares to “sector perform.”

The shares had surged 64 percent since Kanes rated them “sector outperform” in October 2008.

     Sterling Resources Ltd., which explores for oil and gas in Europe, slumped 11 percent, the most in 26 months, to C$3.91 after declaring force majeure on its offshore licenses in Romania. In a press release, the company cited what it called political obstacles from the Romanian government.

     Oilfield-services company Flint Energy Services Ltd. sank 7.8 percent, the most since July 2009, to C$14.94 after saying it had a first-quarter loss of 8 Canadian cents a share to 14 Canadian cents a share. All six analysts in a Bloomberg survey had forecast a profit.

     BlackBerry maker Research In Motion Ltd. advanced 2 percent to C$53.83 after Jeff Kvaal, an analyst at Barclays, said Barclays’ survey of stores found most PlayBook buyers’ feedback has been positive. Shares of the Waterloo, Ontario-based company plunged 27 percent in the 12 months ending yesterday.                        

  Fertilizer producers retreated as corn slumped the most in six weeks after a U.S. government report showed slowing demand.Wheat tumbled as rain fell in parts of the U.S. that had suffered dry spells.

     Potash Corp. dropped 2.8 percent to C$52.69. Agrium Inc., Canada’s second-largest fertilizer producer, slipped 1.4 percent to C$85.17.

     Producers of raw materials used in industry fell after the U.S. Commerce Department said gross domestic product rose at a 1.8 percent annualized rate in the first quarter. Economists had estimated economic growth of 2 percent, according to the median of 80 estimates in a Bloomberg survey.

     U.S. initial jobless claims increased to 429,000 last week from a revised 404,000 the previous week, the Labor Department said in Washington. The median economist forecast in a Bloomberg survey was 395,000.

     Teck Resources Ltd., Canada’s largest base-metals and coal producer, dropped 2.5 percent to C$51.08. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto group, declined 1 percent to C$24.83. Grande Cache Coal Corp., which produces coal used in steel mills, lost 3.1 percent to C$8.12, extending its monthly tumble to 21 percent.

     Thomson Reuters Corp., the financial news and information provider, decreased 2.6 percent to C$38.11 after its first- quarter profit trailed the average of 14 analyst estimates by 2.3 percent, excluding certain items. Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.

     Imax Corp., the maker of giant-screen movie-projection systems, climbed 6 percent to a 10-year high of C$32.55 after raising its 2011 forecast for theater signings by 40 percent. In a note to clients, James M. Marsh, an analyst at Piper Jaffray Cos., called the estimate “massive.”

     Gold explorer European Goldfields Ltd. soared 12 percent to C$12.96 after Reuters said Greece is close to approving the company’s environmental-impact study for two mines. The news service cited the country’s environment ministry.

 US

By Rita Nazareth

     April 28 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to the highest level since June 2008, as better-than-estimated corporate earnings tempered investors’ concern over slowing economic growth.

     Insurers led gains as Allstate Corp., Aflac Inc. and Lincoln National Corp. posted earnings that topped estimates.

Sprint Nextel Corp. rallied 6.7 percent as the third-largest U.S. mobile-phone carrier reported a narrower loss after paring costs to offset contract-customer defections. Constellation Energy Group Inc. advanced 5.7 percent as Exelon Corp. offered $7.9 billion to buy the power producer. Boeing Co. gained 3.2 percent as Citigroup Inc. raised its share-price estimate.

     The S&P 500 climbed 0.4 percent to 1,360.48 at 4 p.m. in New York. The benchmark gauge for American equities rallied yesterday as the Federal Reserve renewed its pledge to stimulate growth with low interest rates. The Dow Jones Industrial Average increased 72.35 points, or 0.6 percent, to 12,763.31 today.

     “Corporate America has managed to do very well in this environment of sluggish growth,” said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.4 billion. “Earnings are beating estimates. Companies are adding value to their shareholders.

There are just not that many alternatives that can compete with corporate America at this point.”

     The S&P 500 has rallied 8.2 percent in 2011 as higher-than- estimated profit and economic reports from manufacturing to housing bolstered investors’ confidence. Earnings-per-share beat estimates at more than three-quarters of the 269 companies in the S&P 500 that reported results since April 11, according to data compiled by Bloomberg.

     Benchmark gauges reversed early losses today as a report showed the number of Americans signing contracts to buy previously owned homes rose more than forecast in March, a sign the industry that triggered the recession may be stabilizing.

     Stock-index futures fell before the start of regular trading as government data showed the U.S. economy grew at a slower pace than forecast in the first quarter as consumer purchases cooled and government spending declined. Another report showed new applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign progress in the labor market may be stalling.

     “It’s very clear that it’s going to be harder and harder to beat estimates from here,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees $784 billion. “You’re going to see the leading economic indicators weaken, albeit from a high level. You are going to have more questions in the market.”

     The global equities bull market will weather any halt in bond purchases by the Fed amid rising U.S. consumption and investment in emerging markets, according to Templeton Asset Management’s Mark Mobius.

     The S&P climbed to an almost three-year high yesterday and the Russell 2000 Index of smaller stocks reached a record after the central bank renewed its pledge to keep interest rates near zero to stimulate the economy. The Federal Open Market Committee agreed to finish $600 billion of Treasury purchases in June.

Another round of buying isn’t needed to sustain the rally and there won’t be an economic slump in the second half, Mobius said in a phone interview from Bucharest yesterday before the Fed statement.

     “We are in a bull market and it will continue,” said Mobius, 74, who oversees more than $50 billion as the Singapore- based executive chairman of Templeton’s emerging markets group.

“There will be corrections along the way but these will be very temporary. The consumer in Europe and America is back. They’re not spending like crazy but they are spending.”

     The S&P 500 Insurance Index rose 1.7 percent, the biggest gain within 24 groups, as 21 of its 22 stocks rallied.

     Lincoln and Allstate are among insurers benefiting from improved investment results in the first quarter. Lincoln reported gains on alternative investments, such as hedge funds, while Allstate said losses narrowed on derivatives. Allstate’s results also improved as claims from costs tied to natural disasters declined.

      Allstate, the largest publicly traded U.S. home and auto insurer, gained 5.7 percent to $33.76. Aflac rose 5 percent to $57. Lincoln National added 4.2 percent to $31.64.                        

     Sprint Nextel rallied 6.7 percent to $5.11. The company added 846,000 prepaid users, while losses of the more lucrative customers who sign up for two-year contracts shrank to 114,000 from 578,000 a year earlier. The carrier added handsets such as the HTC Corp. Evo to wrest customers from larger rivals AT&T Inc. and Verizon Wireless and draw users to its fourth- generation network.

     Constellation Energy climbed 5.7 percent to $36.26. Exelon, the largest operator of U.S. nuclear power plants, agreed to buy the power producer for about $7.9 billion in stock, adding stakes in five reactors and becoming the largest U.S. electricity marketer.

     Overall, there have been more than 8,000 deals announced globally this year, totaling $794.7 billion, a 26 percent increase from the $629.7 billion in the same period in 2010, according to data compiled by Bloomberg.

     Boeing gained 3.2 percent, the most in the Dow, to $78.55.Citigroup raised its share-price estimate for the world’s largest aerospace company to $90, citing positive “momentum”over the next several years.                          

     PulteGroup Inc. gained 3.3 percent to $8.24. The largest U.S. homebuilder by revenue forecast profit in the second half of the year. The company focused on cutting costs in the face of weak demand for new homes. Selling, general and administrative expenses for the quarter decreased 10 percent from a year earlier to $136 million. The rate of cancellations declined and visits to the company’s sale centers increased, said Richard Dugas, chairman and chief executive officer.

     “Assuming market conditions remain stable, we have put ourselves in a position to return to profitability in the back half of the year.” Dugas said on a conference call with investors. “Now it’s about effort and execution, which are clearly within our control.”

     Energy shares had the biggest decline in the S&P 500 within 10 industries, falling 0.2 percent as a group.

     ConocoPhillips slumped 3 percent to $77.45. The third- largest U.S. oil company was cut to “hold” at Deutsche Bank AG, which cited disappointment with first-quarter earnings and said that the outperformance potential is limited.

     Akamai Technologies Inc. tumbled 15 percent, the most in the S&P 500, to $34.94. Traffic growth in the company’s volume business has “moderated,” and it’s “too early” to predict the pace of growth for the rest of the year, according to Chief Executive Officer Paul Sagan. Akamai delivers data for Apple Inc.’s iTunes and streams video for Netflix Inc.

Have a wonderful evening everyone.

Be magnificent!

The phrase ‘to meditate’ does not only mean to examine, observe, reflect, question, weigh;

it also has, in the Sanskrit, a more profound meaning, which is ‘to become.’

-Krishnamurti, 1895-1986 

As ever, 

Carolann

Patience is the companion of wisdom.

              -Saint Augustine, 354-430 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

DANDELION: The French “dent de lion” means lion’s tooth, perhaps in reference to the jagged teethe of the leaves.  Taraxacum officinale – “Taraxacum” derives from the Greek: “taraxos” means disorder and “akos” means remedy.

A few days ago, Gary and I were walking in the English countryside near Ascot and because there has been such splendid warm weather over there, record breaking temperatures on some days in fact – in  the 25-27 degree range – so many summer plants are already in bloom.  Indeed, it really felt like summer.  Among a cluster of bluebells under a big old oak tree, we glimpsed some dandelions peeking through.  Even though it is a weed, I believe it is a virtuous weed. They are reminiscent of the summers of our childhoods.  Emerson wrote, “a weed is a plant whose virtues have not yet been discovered.”  The virtues of the dandelion are many.  Craig Holdrege writes,

“Prolific and hardy, its bursting yellow flower heads, rising above a rosette of sharply toothed leaves, [dandelions] can be found almost everywhere….The dandelion-sea of yellow in yet unmowed parks and lawns provides a feast for the winter weary eye.  Thrusting its way up between cracks in the expanses of concrete and asphalt, a single dandelion can remind us of the power of life in a seemingly barren world.  Dandelions won’t be held back.

When you look closely at its flower, you’ll discover many (one to two hundred) yellow ribbons.  You might think that they are petals, like those of a rose or tulip.  But no, each one is a complete tiny flower, so that the dandelion blossom as a whole is in fact a bouquet of tiny flowers!  This development of a superflower made of individual flowers represents the pinnacle of flower differentiation in the plant kingdom.

When the sun shines, dandelion flower heads open in the morning and close again in the afternoon.  When clouds shield them from the sun they close up, as if they were saying: we are of the sun and for the sun.  Dandelion flowers attract bees and nearly a hundred species of other insects that enjoy their nectar.  This is a true gift of plant to animal, since – remarkably – their seeds can develop without fertilization.  One day the flower head opens as a white feathery globe.  The parachute-bearing seeds drift off to some new place just waiting for a dandelion to take root.”

MYTHOLOGY:  The Greek Goddess Hecate fed Theseus dandelions for 30 days to  give him strength to defeat the Minotaur. 

photos of the day

April 27, 2011

A pack of riders climb up a vineyard in the Lavaux near Vevey during the first stage of the Tour de Romandie cycling race.

Denis Balibouse/Reuters

A peacock watches visitors at a bird park on Kish Island, 1,250 kilometers (777 miles) south of Tehran.

Caren Firouz/Reuters

 Market Commentary:

Canada

     April 27 (Bloomberg) — Canadian stocks fell, led by fertilizer producers and financial companies, after the U.S. Federal Reserve raised its inflation forecast and cut its growth estimate.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, declined 2.5 percent as wheat fell after Statistics Canada forecast more planting. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company, rallied 6.9 percent after the U.S. Federal Reserve’s Open Market Committee said commodity prices “have pushed up inflation in recent months.” Toronto-Dominion Bank, Canada’s second-biggest lender by assets, dropped 1.1 percent.

“There’s a lot of concern about the inflation that’s happening in food and energy,” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.05 million) each for more than 250 families. “That will be the area where any kind of tightening at all will be the hardest hit.”

 The Standard & Poor’s/TSX Composite Index lost 16.53 points, or 0.1 percent, to 13,892.57. The S&P/TSX slipped 0.6 percent from the beginning of the current earnings season on April 11 to yesterday, while the S&P 500 advanced 1.7 percent. Fifty-two percent of S&P/TSX companies that have reported financial results in the period have surpassed their average analyst forecast, compared with 77 percent of S&P 500 companies.

 The Fed today said prices will rise between 2.1 percent and 2.8 percent this year before moderating. In January, the central bank had forecast inflation of 1.3 percent to 1.7 percent.

     Wheat futures sank after Statistics Canada forecast Canadian planting will increase 17 percent this year.

     Potash Corp. retreated 2.5 percent to C$54.18. Agrium Inc., Canada’s second-largest fertilizer producer, fell 1.9 percent to C$86.36.

      S&P/TSX financial companies dropped the most in seven days as the Fed reduced its forecast for economic growth.

     Toronto-Dominion Bank, Canada’s second-largest lender by assets, declined 1.1 percent to C$81.95. Bank of Montreal, the country’s No. 4 bank, lost 1 percent to C$62.48. Intact Financial Corp., Canada’s largest property and casualty insurer, slipped 2 percent to C$48.61.

     Precious-metals producers gained as gold futures advanced to a record and silver jumped in electronic trading.                        

     Silver reseller Silver Wheaton surged 6.9 percent to C$39.91. Barrick Gold Corp., the world’s largest producer of the metal, increased 1.2 percent to C$48.34. First Majestic Silver Corp., which mines in Mexico, soared 8.7 percent to C$21.31 after tumbling 12 percent in the previous two days.

     Natural gas declined for a third day after Commodity Weather Group in Bethesda, Maryland forecast below-average temperatures for the U.S. South.

     Suncor Energy Inc., Canada’s largest oil and gas producer, lost 1 percent to C$42.52. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, decreased 0.6 percent to C$43.60. Crescent Point Energy Corp., which produces oil and gas in western Canada, retreated 0.8 percent to C$43.20.

US

By Rita Nazareth

     April 27 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index the fifth gain in six days, as the Federal Reserve renewed its pledge to stimulate growth with low rates and said a pickup in inflation is likely temporary.

     General Electric Co. added 2.7 percent after saying it wants to boost its dividend. Moody’s Corp., whose founder John Moody created credit ratings more than a century ago, climbed 6.7 percent as profit beat estimates by 25 percent. Amazon.com Inc. gained 7.9 percent as the world’s largest online retailer reported sales that topped predictions and Deutsche Bank AG increased its share-price estimate to $215.

     The S&P 500 added 0.6 percent to 1,355.66 at 4 p.m. in New York. The Dow Jones Industrial Average gained 95.59 points, or 0.8 percent, to 12,690.96. The Russell 2000 Index of small companies rose 0.6 percent to 858.31, a record. The Fed left its benchmark interest rate in a range of zero to 0.25 percent and retained a pledge in place since March 2009 to keep it “exceptionally low” for an “extended period.”

     “It’s a sigh of relief,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc. in Raleigh, North Carolina, which manages $4 billion. “The Fed kept the language.

At least for the rest of this year and into next year, we see accommodative policy. In addition, there’s a perception that the signs of inflation are fairly tamed at this juncture. That’s another positive. Before the announcement, we also got good corporate earnings releases. So, that combination is lifting the equity markets at this point.”

     The S&P 500 has rallied 29 percent since Fed Chairman Ben S. Bernanke suggested on Aug. 27 that he would pursue a second round of asset purchases to stimulate the economy, a tactic known as quantitative easing. Earnings per share beat estimates at 77 percent of the 197 companies in the S&P 500 that have reported quarterly results since April 11, according to data compiled by Bloomberg.

     Bernanke has signaled he’ll maintain record stimulus until job growth accelerates and the recovery is robust enough to withstand tighter credit. The Fed chief has said he expects that a surge this year in fuel and food costs will have only a passing inflationary impact, differing with Fed regional bank presidents who say borrowing costs may need to rise to contain prices.

     “The economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually,” the Federal Open Market Committee said today in its statement after a two-day meeting in Washington. “Increases in the prices of energy and other commodities have pushed up inflation in recent months,” and the Fed expects “these effects to be transitory,” the statement said.  Bernanke said the end of the Fed’s $600 billion bond-buying program in June probably won’t have a “significant” effect on financial markets or the economy, and the central bank will likely continue reinvesting maturing debt after June.

     “We are going to complete the program at the end of the second quarter,” he said at his first press conference following a policy meeting. “The end of the program is unlikely to have a significant effect on financial markets or the economy.”

     A report before the open of exchanges showed that orders for durable goods rose in March for a third consecutive month, showing businesses intend to keep spending to update equipment.

Bookings for equipment meant to last at least three years climbed 2.5 percent after a 0.7 percent gain the prior month that was revised from a previously reported drop, the Commerce Department said.                         

    GE added 2.7 percent, the most in the Dow average, to $20.65. Chief Executive Officer Jeffrey Immelt said the global economy continues to improve even as oil prices rise.

     “It’s always something to be concerned about because of consumer confidence, but from a GE context, we have such great technology” in energy products, Immelt told reporters today before the Fairfield, Connecticut-based company’s annual meeting in Salt Lake City. “It’s something to think about, but it doesn’t seem to be hurting the economy. So far.”

     Moody’s climbed 6.7 percent to $38.33 after saying that first-quarter profit rose 37 percent as companies issued a record amount of debt, boosting demand for its services.

Corporate bonds sales in the U.S. increased 24 percent to $398.3 billion last quarter from a year earlier, spurring demand for ratings. Moody’s also raised its annual earnings forecast and said it would boost its quarterly dividend to 14 cents a share.                    

 Amazon.com climbed 7.9 percent to $196.63. The world’s largest online retailer reported first-quarter sales that topped predictions. Deutsche Bank increased its share-price estimate to $215 from $192, saying profit growth will resume in the fourth quarter.

     DeVry Inc. gained 7.2 percent to $53.70. The for-profit education company reported third-quarter earnings excluding some items of $1.32 a share, beating the average analyst estimate of $1.23, Bloomberg data show.

     “We’re seeing pretty healthy signs,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “We have a combination of better economic data, strong earnings and new highs for the market. Companies are making money and willing to spend some money to reinvest into their businesses. They are confident enough about the economy and about their own prospects.”

     Broadcom Corp. slumped 12 percent to $35.45. The biggest maker of chips for television set-top boxes forecast second- quarter revenue that missed analysts’ estimates as customers such as Nokia Oyj and Samsung Electronics Co. struggle to boost sales. Chief Executive Officer Scott McGregor cited a slowdown in sales to cellphone makers for the forecast, though he said Broadcom is holding or gaining market share.

     ConocoPhillips dropped 1.7 percent to $79.83. The third- largest U.S. oil company reported first-quarter profit of $1.82 a share on an adjusted basis. Analysts surveyed by Bloomberg had estimated profit of $1.92 on average.

     Financial stocks are poised to rally after lagging behind the S&P 500 because the two groups are echoing a pattern set last year, Oppenheimer & Co.’s Carter Worth said.

     The Financial Select Sector SPDR Fund, an exchange-traded fund tracking 82 S&P 500 companies in the industry, lost 2 percent in the past year through yesterday, while the SPDR S&P 500 ETF Trust, an ETF linked to the entire index, jumped 11 percent. The ratio of their prices fell to 0.121 in November from 0.141 in April 2010, meaning the financial ETF trailed the S&P 500, before rebounding to 0.129 in January. It has since fallen to 0.12.

     “Our hunch is that the disconnect is resolved this time just as it was resolved late last autumn, with the financials coming to life and playing catch-up with the market,” New York- based Worth wrote in a note sent to clients yesterday.

“Something has to give.”

Have a wonderful evening everyone.

Be magnificent!

In the song of the rushing torrent,

hold onto the joyful assurance:

I will become the sea.

And this is not a vain supposition;

it is absolute humility because it is the truth.

-Rabindranath Tagore, 1861-1901

 As ever,

 Carolann

 The folly which we might have ourselves committed

is the one which we are least ready to pardon in

another.

          -Joseph Roux, 1834-1886

 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Great to be back though I’m already missing the  several days of much warmer weather – 26 degrees in London, same in Paris.  Lots of excitement in the air…I think the world is just so  tired of all the negativity – earthquakes, tsunamis, nuclear contamination, political unrest in North Africa and the Middle East – anything positive and optimistic like a Royal wedding is a welcome reprieve.  On a more somber note, today marks the anniversary of the Chernobyl nuclear reactor disaster in 1986 and more importantly, the 1937 massacre in Guernica, Spain, which inspired one of the greatest paintings of the last century, Guernica by Picasso.  Guernica was painted by Pablo Picasso in response to the bombing of Guernica, Basque Country, by German and Italian warplanes at the behest of the Spanish Nationalist forces, on 26 April 1937, during the Spanish Civil War.  The Spanish Republican government commissioned Pablo Picasso to create a large mural for the Spanish display at the Exposition Internationale des Artes et des Techniques dans la Vie Moderne , 1937, Paris International Exposition in the 1937 World’s Fair in Paris. Guernica shows the tragedies of war and the suffering it inflicts upon individuals, particularly innocent civilians. This work has gained a monumental status, becoming a perpetual reminder of the tragedies of war, an anti-war symbol, and an embodiment of peace. On completion Guernica was displayed around the world in a brief tour, becoming famous and widely acclaimed. This tour helped bring the Spanish Civil War to the world’s attention.  Go to Smarthistory.org and find Picasso under Artists and listen to a wonderful piece on this painting.

photos of the day

April 26, 2011

A red-tailed hawk sits atop her three newly hatched young at the The Franklin Institute in Philadelphia. Two of the three hatched Sunday and the third on Monday. It’s the third straight year a mating couple has returned to its unusual urban nest on a ledge at the city’s science museum.

Matt Rourke/AP

Officers march with a wreath during a memorial ceremony for Chernobyl victims to mark the 25th anniversary of the disaster, in Minsk, Belarus, Tuesday.

Vasily Fedosenko/Reuters

Market Commentary:

Canada

By Matt Walcoff

     April 26 (Bloomberg) — Canadian stocks rose, led by railroads and insurers, after companies including UBS AG, United Parcel Service Inc. and Ford Motor Co. beat analysts’ profit estimates.

     Canadian National Railroad Co., the country’s biggest railroad, advanced 1.2 percent before the release of its first- quarter financial results. BlackBerry maker Research In Motion Ltd. gained 3.1 percent after an analyst at Royal Bank of Canada said the company’s PlayBook tablet computer is selling more quickly than some had forecast. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, lost 4.8 percent as silver retreated for the first time in nine days.

     The Standard & Poor’s/TSX Composite Index increased 1.78 points, or less than 0.1 percent, to 13,909.10. Among S&P/TSX companies, 128 advanced, 117 dropped and three were unchanged.

     “It’s a fairly credible rally,” said Bob Decker, a money manager at Aurion Capital Management in Toronto, which oversees

C$5.7 billion ($6 billion). “You’ve got relatively good value, especially as compared to fixed-income alternatives, and you’ve got a very benign interest rate environment. That’s supportive for equity valuations and a steady recovery in the economy.”

     Since the current earnings-reporting season began April 11, 122 of 154 S&P 500 companies and six of 12 S&P/TSX companies that have reported financial results have surpassed their average analyst estimate. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.                       

 CN and Canadian Pacific Railway Ltd. gained as North American transportation stocks advanced after Ryder System Inc. and UPS boosted their full-year profit forecast. CN climbed for a fifth day, increasing 1.2 percent to C$71.

The company is scheduled to release first-quarter earnings at 4 p.m. in Montreal. CP rose 2.2 percent to C$61.67.

RIM rose 3.1 percent to C$52.60 after Mike Abramsky, an analyst at Royal Bank, said 14 percent of the Best Buy Co.stores Royal Bank has checked have sold out of the version of the PlayBook with 16 gigabytes of memory. RIM shares plunged 26 percent from Feb. 18 to yesterday.

S&P/TSX financial companies advanced after companies including UBS, Switzerland’s largest bank, and Ford, the No. 2 U.S. automaker, beat analysts’ profit forecasts.

Manulife Financial Corp., North America’s fourth-largest insurer, gained 1.1 percent to C$17. Sun Life Financial Inc., Canada’s third-biggest insurance company, increased 2 percent to C$30.85. Brookfield Asset Management Inc., the country’s largest real estate company, climbed 1.4 percent to C$31.66.                       

     Fed Chairman Ben S. Bernanke is scheduled to speak to reporters at 2:15 p.m. tomorrow in Washington after a Federal Open Market Committee meeting.

     Gold lost 0.4 percent from a record settlement to $1,503.50 an ounce on speculation the U.S. Federal Reserve will take steps to prevent inflation. Silver sank 4.4 percent, the most since March 15.

     Silver Wheaton decreased 4.8 percent to C$37.32. Goldcorp Inc., the world’s second-largest gold producer by market value, retreated 1.2 percent to C$51.90. First Majestic Silver Corp., which mines in Mexico, sank 7.5 percent to C$19.61, extending its two-day slide to 12 percent.

     Barrick Gold Corp., the world’s biggest gold-mining company, fell 3.5 percent to C$47.75 after David Haughton, an analyst at Bank of Montreal, cut his rating on the shares to “market perform” from “outperform.” In a note to clients, Haughton cited Barrick’s agreement to buy Equinox Minerals Ltd., saying copper-mining companies trade for less relative to earnings than do gold-mining companies.Yesterday, Barrick slumped 6.7 percent after saying it will buy Equinox for C$8.15 a share.

     Equinox dropped 3.1 percent to C$8.11 after surging 11 percent to a record yesterday. Minmetals, which had bid C$7 a share for Equinox, said Barrick’s offer “is above our most optimistic assessment of value,” according to a statement from Chief Executive Officer Andrew Michelmore.

     First Quantum Minerals Ltd., which, like Equinox, mines copper in Africa, slumped 2 percent to C$133.75 after rallying 5 percent yesterday.

     Colossus Minerals Inc., which explores for precious metals in Brazil, surged 6.9 percent to C$8.81 after reporting drilling results. In a note to clients, Ron Stewart, an analyst at Dundee Securities Ltd., called the results “nothing short of extraordinary.”

     Lumber producers West Fraser Timber Co. and Canfor Corp. rebounded after sinking 12 percent and 18 percent, respectively, this month through yesterday. West Fraser, Canada’s largest lumber producer, jumped 4.5 percent to C$55.27. Canfor rose 5.5 percent to C$12.87.

US

By Rita Nazareth and Stephen Kirkland

     April 26 (Bloomberg) — Stocks surged, sending the Standard & Poor’s 500 Index to its highest level since June 2008, as earnings at companies from Ford Motor Co. to 3M Co. beat analysts’ estimates. Treasuries rose, the dollar fell versus the euro for a sixth day and commodities were little changed.

     The S&P 500 increased 0.8 percent to 1,346.47 at 1:59 p.m. in New York and the Stoxx Europe 600 Index gained 0.3 percent.

The dollar matched the longest losing streak versus the euro in almost two years amid speculation the Federal Reserve will consider measures to keep interest rates low. Ten-year Treasury yields slipped five basis points to 3.32 percent, the lowest level in a month. Oil was little changed near $112 a barrel and gold and silver retreated.

     Before today, the S&P 500 had failed to top its 2011 high reached on Feb. 18 even as it closed less than 1 percent below the peak on eight days in April. Stocks rallied today as Ford, 3M and United Parcel Service Inc. joined the 79 percent of S&P 500 companies that have topped analyst earnings estimates since April 11. Investors also awaited the end of a Fed meeting tomorrow to gauge the central bank’s outlook for interest rates and its economic stimulus program known as quantitative easing.

     “Corporate performance is excellent,” said Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages about $155 billion. “The underlying economic performance in the United States has been a pleasant surprise. Our expectation is that the Fed ends QE2 in the summer and the growth baton will be handed from policy to the private economy. That’s providing rationale for the stock market to move forward.”

 The Dollar Index, used to track the U.S. currency against six trading partners, traded near the lowest since August 2008 on speculation the Fed will signal it plans to keep interest rates close to zero for an extended period. Twelve of 16 major counterparts climbed against the U.S. currency, with the euro strengthening 0.4 percent to $1.4640.

     The S&P 500 rose for the fourth time in five days, erasing yesterday’s decline. Industrial companies rose 1.8 percent as a group to lead gains among all 10 of the index’s main industries.

Ford, the second-largest U.S. automaker, advanced 2.4 percent after first-quarter profit increased 22 percent to the most in the period since 1998 amid higher prices for fuel-efficient models.

     3M Co. said it had first-quarter profit of $1.49 a share, topping the average analyst estimate of $1.44 a share. The stock rose 2.3 percent. UPS, the world’s largest package-delivery company, climbed 1 percent after also boosting its full-year forecast amid increasing demand for international shipping.

     Stocks extended gains after confidence among U.S. consumers increased more than forecast in April, signaling the improving labor market is helping Americans weather rising fuel costs. The Conference Board’s confidence index rose to 65.4 from a revised

63.8 reading in March. The median forecast of economists surveyed by Bloomberg News projected an advance to 64.5. Another report showed residential real estate prices dropped in February by the most in more than a year.

     Treasury two-year note yields lost two basis points to 0.62 percent, the lowest level since March 23, even after the U.S. sold $35 billion of the securities at a higher-than-forecast yield. The notes drew a yield of 0.673 percent, compared with a forecast of 0.669 percent in a Bloomberg News survey of 8 of the Federal Reserve’s 20 primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with amount of securities offered, was 3.06, below the 3.42 average at the past 10 sales.

     Five stocks climbed for every two that fell in the Stoxx Europe 600. UBS AG, Switzerland’s largest bank, rallied 3.9 percent after attracting the highest wealth management inflows since the end of 2007 in the first quarter. Parmalat SpA jumped 11 percent after Groupe Lactalis bid for holdings in Italy’s biggest dairy company it doesn’t already own.                        

     The MSCI Emerging Markets Index was little changed after China’s Shanghai Composite Index slid 0.9 percent. Industrial & Commercial Bank of China Ltd. lost 0.3 percent in Hong Kong after the world’s largest lender by market value and three rivals were told last month to maintain capital adequacy ratios of at least 11.8 percent in 2011, one person said, declining to be identified as the plan isn’t public. Agricultural Bank of China Ltd., the nation’s fourth biggest, should target 11.7 percent, two people said.                        

     Yields on government securities from Greece, Ireland and Portugal reached records amid speculation the heavily indebted nations won’t be able to avoid restructuring. Costs to insure Greek and Portuguese debt climbed to records.

     The yield on Irish two-year government notes climbed to a euro-era record of 12.08 percent. Portuguese two-year yields touched a euro-era record of 11.74 percent.

     The yield on Greece’s 10-year bonds rose as much as 47 basis points to 15.38 percent. Greece’s 2010 budget gap was 10.5 percent of gross domestic product, more than a percentage point wider than the government estimated, according to figures from Europe’s statistics agency today.

     Credit-default swaps on Greek government bonds increased 13 basis points to 1,345 basis points and Portuguese swaps climbed six basis points to 666.

 Have a wonderful evening everyone.

 Be magnificent!

 This glorious soul we must believe in.  Out of that will come power.

Whatever you think, that you will be.  If you think yourselves weak, weak you will be;

if you think yourselves strong, strong you will be; if you think yourselves impure, impure you will be;

if you think yourselves pure, pure you will be.  This teaches us not to think ourselves as weak, but as strong, omnipotent, omniscient.  No matter that I have not expressed it yet, it is in me.

All knowledge is in me, all power, all purity, and all freedom.  Why cannot I express this knowledge?

Because I do not believe in it.  Let me believe in it, and it must and will come out.

This is what the idea of the Impersonal teaches.

                                                                        -Swami Vivekananda, 1863-1902

 As ever,

Carolann

There is a coherent plan in the universe,

though I don’t know what it’s a plan for.

                 -Fred Hoyle, 1915-2001

               

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Students pose for a photo with a globe during a campaign to mark World Earth Day in a middle school in Dexing, Jiangxi province, China. World Earth Day falls on April 22 every year.

Market Commentary:

 Canada

By Matt Walcoff

 April 21 (Bloomberg) — Canadian stocks headed for a weekly gain as companies including Morgan Stanley, Apple Inc. and General Electric Co. topped analysts’ profit estimates and the U.S. dollar fell from a 20-month low, boosting materials stocks.

 Bank of Nova Scotia, Canada’s third-largest lender by assets, increased 0.9 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 1.6 percent after Mackie Research Capital Corp. raised its rating on the company. BlackBerry maker Research In Motion Ltd. dropped 1.9 percent after Apple said iPhone unit sales more than doubled in the second quarter from a year earlier.

 The Standard & Poor’s/TSX Composite Index advanced 57.07 points, or 0.4 percent, to 13,954.55 at 2:32 p.m. in Toronto.

For the week, the Canadian stock benchmark has increased 1.1 percent.

 “There is a continuing downward pressure on the U.S. dollar, and that is likely to continue,” said Michael Smedley, who helps manage about C$1 billion ($1.05 billion) as a money manager at Morgan Meighen & Associates Ltd. in Toronto. “The upward power on the commodity prices is related to the weakness in the U.S. dollar. You need more U.S. dollars all the time to buy these things.”

 The S&P/TSX had gained 20 percent in the nine months ending yesterday as the U.S. Dollar Index fell 10 percent. Gold surged 32 percent to a record and silver soared 149 percent to the highest since 1980.

 U.S. Dollar

 The U.S. currency retreated today. The dollar has fallen due in part to concern about the country’s budget deficit, speculation the U.S. Federal Reserve will not follow other central banks in raising interest rates soon and higher oil prices, Camilla Sutton, chief currency strategist at Bank of Nova Scotia, said in a note to clients.

 Gold increased by $4.90 to $1,503.90 in New York, the first settlement over $1,500, while silver rallied 2.3 percent. Barrick Gold Corp., the world’s largest gold producer, climbed 0.9 percent to C$52.79. Goldcorp Inc., the world’s second-largest producer of the metal by market value, rose 0.9 percent to C$52.94. Semafo Inc., which mines gold in Africa, advanced 6.1 percent to C$8.74. 

Newstrike Capital Inc., which explores for gold in Mexico, soared 34 percent to C$2.28, building on yesterday’s record close, after reporting drilling results.

 Teck, Ivanhoe

 Copper climbed for a third day in New York. Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 2.2 percent to C$53.81. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, rose 1.3 percent to C$25.35.

Potash Corp. rallied 1.6 percent to C$55.57 after John Chu, a Mackie analyst, boosted his rating on the shares to “buy”

from “hold.” In a note to clients, Chu cited a recent decline in the shares’ price relative to forecast earnings.     

Ninety-three of 115 S&P 500 companies and four of 10 S&P/TSX companies that have reported earnings since April 11 have beaten their average analyst estimate.    

Canada’s six largest banks and three biggest insurers each advanced. Scotiabank increased 0.9 percent to C$57.74. Toronto- Dominion Bank, Canada’s second-largest lender by assets, climbed 0.8 percent to C$82.93. Manulife Financial Corp., North America’s fourth-biggest insurer, rose 1.5 percent to C$16.93.

Natural Gas

The S&P/TSX Energy Index gained for a third day after the U.S. reported a smaller increase in natural gas stockpiles than most analysts in a Bloomberg survey had forecast. Gas futures advanced 2.3 percent in New York.

Suncor Energy Inc., Canada’s largest oil and gas producer, increased 1.3 percent to C$43.05. Nexen Inc., an oil and gas producer with operations on five continents, climbed 3.3 percent to C$22.92. Oilfield-services provider Trican Well Service Ltd. rose 4 percent to C$22.93. 

RIM dropped 1.9 percent to C$51 after Apple said it sold 18.7 million iPhones last quarter, surpassing the 16.3 million average of 13 analyst forecasts. RIM shares have plunged 31 percent since Feb. 19. 

Celestica Inc., which makes electronics for companies including Research In Motion Ltd., rallied 4.7 percent to C$10.52 after reporting first-quarter earnings that topped the average of 13 analyst estimates.

 US

By Stephen Kirkland and Rita Nazareth

April 21 (Bloomberg) — Stocks rose, with the Dow Jones Industrial Average climbing to an almost three-year high, as better-than-estimated earnings boosted confidence in the global economy. Commodities rallied for a third day and the euro strengthened to a 16-month high against the dollar.

The Dow added 26 points, or 0.2 percent, to 12,479.54 at :21 p.m. in New York, paring gains after a gauge of Philadelphia manufacturing trailed estimates. The MSCI World Index climbed 0.7 percent. Gold rose to a record for a fifth day as silver reached a 31-year high. The Dollar Index tumbled 0.4 percent to the lowest level since August 2008, while the euro rose 0.2 percent to $1.4550 and the Swiss franc climbed to the strongest in at least 40 years versus the U.S. currency.

Equities added to yesterday’s 2 percent advance in the MSCI World, this year’s biggest global rally, as earnings at companies from Apple Inc. to Morgan Stanley topped analysts’ projections. Of the 115 companies in the Standard & Poor’s 500 Index that posted results since April 11, 81 percent beat per- share profit estimates, according to data compiled by Bloomberg.

 “The run rates on both revenue and profits are really coming in strong, so it’s not just cost-cutting,” said James Swanson, chief investment strategist at Boston-based MFS Investment Management, which oversees about $230 billion. “This is finally the evidence the market needs to see that this isn’t a fluke. This is a self-sustaining recovery.”

 Earnings Season

 Earnings-per-share have grown 19 percent for the S&P 500 companies that released quarterly results since April 11, data compiled by Bloomberg show. Sales have risen 5 percent for the group and exceeded estimates at 72 percent of the companies.

The S&P 500 Index rose 0.5 percent today to 1,336.59, less than 0.5 percent below its high for the year set on Feb. 18. The gauge is up 1.3 percent over the past four sessions, poised to snap a two-week losing streak.

Apple gained 2.7 percent and Morgan Stanley advanced 1.5 percent. Qualcomm Inc. rallied 3 percent as the biggest maker of mobile-phone chips reported earnings that topped analysts’ estimates.

U.S. equities pared gains after the Federal Reserve Bank of Philadelphia’s general economic index dropped to 18.5, the lowest level since November and trailing economists’ estimates, from 43.4 the prior month which was the highest level since 1984.  

Treasuries rose, capping a second weekly gain, as the report triggered speculation the economic recovery is faltering. The 10-year yield lost one basis point to 3.40 percent.

Economic Data

 Jobless claims decreased by 13,000 to 403,000 in the week ended April 16, Labor Department figures showed. Economists projected a decline to 390,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those receiving extended payments declined.

The index of U.S. leading indicators increased for a ninth month in March, signaling higher fuel costs will fail to derail the expansion. The Conference Board’s gauge of the outlook for the next three to six months rose 0.4 percent after a revised 1 percent gain in February that was larger than previously estimated.

 The Stoxx Europe 600 Index gained 0.5 percent as two shares rose for every one that fell. Akzo Nobel NV, the world’s largest paintmaker, climbed 4 percent on better-than-estimated earnings.

William Hill Plc surged 7.5 percent as the bookmaker reported increased sales and operating profit. Royal KPN NV slid 8.3 percent as the biggest Dutch phone company cut its 2011 forecast.

The MSCI Emerging Markets Index gained 0.9 percent to 1,206.05, the highest level since June 2008, as benchmark stock indexes in Taiwan and South Korea jumped more than 1.3 percent.

The S&P GSCI index of 24 commodities advanced 0.5 percent.

Silver rose as much as 2.5 percent to $46.3775 an ounce, the highest price since January 1980, and gold futures jumped to an all-time high of $1,509.60 an ounce.

Dollar Weakens

 The dollar weakened against all but three of its 16 most- traded counterparts. It depreciated 0.7 percent against the pound and slid as much as 1.1 percent versus the Swiss franc, to the weakest level since at least 1971. Sweden’s krona climbed as much as 0.9 percent against the dollar, reaching its strongest level in more than 2 1/2 years.

Greek, Portugal and Irish bond yields surged to records amid speculation divisions are deepening within Europe over how to resolve the sovereign-debt crisis. The yield on the two-year Greek note climbed as much as 131 basis points to 23.33 percent, the highest since before the euro was introduced in 1999.

Credit-default swaps protecting Greek sovereign debt jumped 40 basis points to 1,340 basis points, according to CMA, signaling a 68 percent chance of default within five years. The extra yield investors demand to hold Portuguese 10-year bonds instead of benchmark German bunds jumped 27 basis points to 624 basis points, the most since at least 1997.

 Have a wonderful Eco friendly Easter Holidays everyone.

 Easter is the demonstration of God that life is essentially spiritual and timeless.  Charles M. Crowe

Be magnificent!

 As ever,

 Nishma for Carolann

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

 To all the hockey fans out there~ One big cheer for Game 5 tonight “Vancouver Canucks” Vs “Chicago BlackHawks”. Goooooooo Canucks!

Market Commentary:

 Canada

By Matt Walcoff

 April 20 (Bloomberg) — Canadian stocks rose for a second day as companies including Intel Corp. and Freeport-McMoRan Copper & Gold Inc. topped analysts’ earnings forecasts and oil and metals gained on a weaker U.S. dollar.

Suncor Energy Inc., Canada’s largest oil and gas producer, advanced 2.8 percent after the U.S. government reported a decline in crude inventories. Toronto-Dominion Bank increased 1.4 percent after at least 20 S&P 500 companies reported profit that surpassed their average analyst estimate. Barrick Gold Corp., the largest producer of the metal, climbed 1.3 percent as the U.S. dollar retreated against 15 of 16 other major currencies.

 The Standard & Poor’s/TSX Composite Index gained 164.89 points, or 1.2 percent, to 13,901.72 at 1:46 p.m. in Toronto, the biggest gain in four weeks. “It’s an earnings- and growth-driven rally today,” said Blair Falconer, who manages C$800 million ($839 million) at HSBC Securities (Canada) Inc. in Toronto. “The scare stories about growth, whether it’s the issues with European debt or the issues with inflation, all those risk factors really seem to have abated in the last couple of days.”

 The S&P/TSX had fallen 2.7 percent this month before the market opened, more than every other developed-market benchmark gauge except Greece’s. Banks and energy companies dropped after the International Monetary Fund cut its growth forecast for the U.S. and Standard & Poor’s lowered its outlook on U.S. sovereign credit ratings.

 Topping Estimates

Intel, the world’s biggest chipmaker, forecast second- quarter sales that may top analysts’ estimates. Oil and metals rallied as the U.S. dollar declined to a 16-month low against a basket of world currencies.

 Crude increased as much as 3.3 percent in New York. U.S. supplies fell by 0.6 percent last week. Eleven of 13 analysts in a Bloomberg survey had forecast an increase. Suncor climbed 2.8 percent to C$42.52. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, rose 2.2 percent to C$44.16.

Petrominerales Ltd., which produces oil and gas in Colombia, rallied 5.9 percent to C$36 after Natalia Agudelo, an analyst at Celfin Capital, began coverage of the company with a “buy” rating. In a note to clients, Agudelo cited the company’s “aggressive exploration program” and “proven and experienced” management.

The S&P/TSX Financials Index gained the most in three weeks. TD advanced 1.4 percent to C$82.72. Bank of Nova Scotia, Canada’s third-largest lender by assets, increased 1.4 percent to C$57.31. Manulife Financial Corp., North America’s fourth- biggest insurer, climbed 1.6 percent to C$16.78.

Record Gold

Precious-metals producers advanced as gold touched a record $1,506.50 an ounce in New York.

Barrick gained 1.3 percent to C$52.47. Kinross Gold Corp., Canada’s third-biggest gold producer, increased 1.2 percent to C$14.70. Semafo Inc., which produces gold in Africa, rallied 4.7 percent to C$8.26.

 Sulliden Gold Corp. jumped 10 percent to C$2.13, extending a 9.7 percent gain from yesterday, when it released drilling results. All 16 S&P/TSX base-metals and coal producers gained after Freeport, the largest publicly traded copper producer, raised its 2011 sales forecast. Copper advanced the most in four weeks.

 “Miners in Canada are starting to forecast much-stronger revenue and earnings growth for the rest of 2011,” Falconer said.

 Teck, First Quantum

 Teck Resources Ltd., the country’s largest base-metals and coal producer, increased 1.9 percent to C$52.59. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 5.4 percent to C$126.95. Copper Fox Metals Inc., which owns a base- and precious-metals project in British Columbia, surged 12 percent to C$2.58.

Quadra FNX Mining Ltd., which mines copper in the U.S., Canada and Chile, soared 12 percent, the most since May, to  C$15.46 after analysts at Royal Bank and TD raised their ratings on the shares to “outperform” and “buy,” respectively.In a note to clients, Greg Barnes, an analyst at TD, cited a higher net asset value estimate for Quadra FNX’s Victoria project in Ontario. Magna International Inc., Canada’s largest auto-parts maker, rose 5.8 percent to C$46.54. Herbert Demel, an executive vice president, told a Shanghai auto forum that the company forecasts emerging markets will account for 15 percent of sales by 2013, up from 10 percent now.

MagIndustries Corp., which is developing a potash mine in the Republic of Congo, surged 50 percent to 22.5 Canadian cents after agreeing to be bought by Shanghai-based Evergreen Industries Group for 25 Canadian cents a share in cash.The shares soared as much as 57 percent, the most intraday since October 2008.

US

By Stephen Kirkland and Rita Nazareth

April 20 (Bloomberg) — Global stocks staged the biggest rally of 2011 and the Dow Jones Industrial Average reached an almost three-year high amid better-than-estimated results at companies from Intel Corp. to United Technologies Corp. and L’Oreal SA. Gold jumped to a record as the dollar slid.

The MSCI World Index jumped 2 percent at 4 p.m. in New York, the biggest increase since Nov. 4, and emerging-market shares rallied the most in 10 months. The Standard & Poor’s 500 Index climbed 1.4 percent. The U.S. currency weakened versus all 16 major peers, dragging the Dollar Index to the lowest level since November 2009. Ten-year U.S. Treasury yields rose four basis points to 3.41 percent. Sugar and nickel led commodities higher and gold traded above $1,500 an ounce for a second day.

 Technology shares led gains after Intel said late yesterday revenue may top analysts’ estimates in the second quarter.

L’Oreal SA, the world’s largest cosmetics maker, reported sales climbed 9.3 percent and South Korea’s LG Chem Ltd. posted a 27 percent jump in profit. Earnings-per-share exceeded predictions for 76 percent of the 59 companies in the S&P 500 that reported results since April 11, helping revive investor confidence after S&P cut its rating outlook for U.S. debt on April 18.

 “The risk-on trade is in full-blown mode,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $53 billion. “The surprise factor was sort of being lost in the market. The good corporate earnings across the board reinforce the idea that the global recovery is in place. As a consequence, equities and commodities are feeling the benefits of that.”

 April 18 Plunge Erased

 The S&P 500 climbed for the fifth time in six days and erased its 1.1 plunge on April 18. Intel surged 7.8 percent, the most in two years. Yahoo! Inc. climbed 4.7 percent as the most- visited U.S. Web portal had first-quarter sales that topped estimates. Apple Inc., the maker of the iPhone that is scheduled to report results after markets close today, climbed 1.4 percent. United Technologies, maker of Carrier air conditioners and Pratt & Whitney engine parts, surged 4.3 percent to $85.90, its highest close since at least 1980.

 Intel and United Technologies led the Dow up 186.79 points, or 1.5 percent, to 12,453.54, its highest closing level since June 2008.

 Stocks extended gains after sales of previously owned U.S. homes increased 3.7 percent to a 5.1 million annual rate in March, exceeding the 5 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed. The median price declined from a year earlier, and 40 percent of the sales were distressed properties.

 European Stocks

 The Stoxx Europe 600 Index advanced 1.7 percent, the most in a month. STMicroelectronics NV, Europe’s biggest chipmaker, climbed 5 percent and ASML Holding NV, the largest semiconductor-equipment maker, jumped 5.3 percent. L’Oreal SA rose 3.2 percent. PSA Peugeot Citroen gained 4.7 percent as Europe’s second-biggest automaker posted a 10 percent increase in first-quarter revenue.

 The MSCI Emerging Markets Index jumped 2.5 percent, the steepest gain since June. A measure of technology stocks in the gauge rallied 3.7 percent for the biggest gain since May 2009.

South Korea’s Kospi Index jumped 2.2 percent to a record, while Taiwan’s Taiex Index increased 2 percent. Russia’s benchmark stock index rose 1.6 percent on higher oil, while benchmarks in Poland, Hungary and South Africa rallied at least 1.3 percent.

 Commodities Rally

 The S&P GSCI index of 24 commodities climbed 1.8 percent.Raw sugar rose 4 percent, nickel climbed 4.3 percent and crude oil jumped 2.9 percent to $111.45 a barrel in New York.

 Gold for June delivery rallied as much as 0.8 percent to a record $1,506.50 an ounce.

 The Dollar Index, which tracks the currency against six major peers, tumbled 0.9 percent to 74.351, the lowest since November 2009.

The euro strengthened 1.2 percent to $1.4511, its highest level since January 2010. The pound weakened 0.7 percent versus the euro after minutes from the Bank of England showed policy makers voted 6-3 to keep interest rates on hold this month as the majority said that data on the economy over the previous month had “probably been to the downside.”

Canada’s dollar touched the highest level against its U.S. counterpart since November 2007 as gains in stocks and commodities boosted demand for currencies most-linked to economic growth. The loonie, as the currency is nicknamed, pared gains before a report tomorrow forecast to show the nation’s retail sales rose in February.

The Swedish krona advanced 0.3 percent against the euro after the central bank raised its benchmark repo rate for the sixth time since July, and kept a forecast for coming increases unchanged. Thailand’s baht strengthened 0.4 percent versus the dollar after the Bank of Thailand increased the one-day bond repurchase rate for a third time this year.

 U.S., Europe Bonds

 Treasuries fell, snapping a three-day gain, with the five- year note yield advancing five basis points to 2.11 percent. Thirty-year U.S. bond yields increased three basis points to 4.46 percent. Today’s rally in stocks came even amid linger concern about Europe’s government-debt crisis.The yield on Irish 10-year debt jumped 26 basis points to 10.07 percent, increasing for the sixth day, the longest run of gains since Feb. 15. The Portuguese 10-year yield advanced 19 basis points, climbing for the seventh day, with the Greek yield up 27 basis points.

 The cost of insuring debt sold by Greece and Portugal rose to records, according to traders of credit-default swaps.Contracts on Greece jumped 62 basis points to 1,303 basis points according to closing prices in London, signaling a 67 percent chance of default within five years. Portugal climbed 24 basis points to 636.

 Have a wonderful evening everyone.

 I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.  –Nelson Mandela

Be magnificent!

As ever,

Nishma for Carolann

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

A group of women take photos of flowers at King Abdullah Park during the Rabih Festival in Dammam, Saudi Arabia

Market Commentary:

 Canada

By Stephen Kleege

 April 19 (Bloomberg) — Canadian stocks rose for the first time in four days as mining shares advanced after Teck Resources Ltd. reported profit that beat estimates and copper rebounded from a six day decline.

 Teck, Canada’s biggest base-metals producer, rallied 5.8 percent after higher coal and copper prices boosted first- quarter results. Potash Corp. of Saskatchewan Inc. rose 3.4 percent as wheat rallied. Research In Motion Ltd. fell 2.2 percent after Business Insider reported AT&T Inc. is blocking RIM’s new tablet from tethering with its BlackBerry smartphones.

 The Standard & Poor’s/TSX Composite Index rose 30.23 points, or 0.2 percent, to 13,732.56 at 2:06 p.m. in Toronto.“You can get some pretty good reaction to earnings,” said David Cockfield, who helps oversee about C$300 million at MacNicol & Associates Asset Management in Toronto, referring to Teck. Earlier this month “we broke through 14,000 in the TSX without any difficulty at all. I still think it’s a resistance level, until we get some reasonably dramatic news that things are improving, particularly in the U.S.”

 The Canadian equity benchmark had fallen 1 percent over the past three days as banks and commodity producers declined on concern economic growth will slow after U.S. jobless claims topped forecasts and Standard & Poor’s lowered its outlook on U.S. debt to negative.

 Teck Rises

 Copper halted its longest slump since June after Freeport- McMoRan Copper & Gold Inc. said it suspended operations at a mine in Indonesia, fanning supply concerns.

 Teck, the world’s second-largest exporter of metallurgical coal, said profit excluding some items was 76 cents a share as coal sales topped its forecast. Earnings beat the 75 cent average estimate of analysts surveyed by Bloomberg. The shares rose 5.8 percent to C$51.75, the first gain in 10 days.

 Quadra FNX Mining Ltd., which explores for copper and other metals in the United States, Canada, and northern Chile, advanced 3.5 percent to C$14.03. Quadra estimated its Victoria project contains 3.4 billion pounds of contained copper equivalent and projected it will start production in 2017.

 Black Diamond Group Ltd., a provider of modular structures for temporary work space and energy services, fell 2.7 percent to C$26.25 after saying it plans to offer 1.8 million shares at C$26.10 each as part of a capital expansion to meet demand from oil-sands developers.

 Potash Corp. rose for the first time in four days, gaining  3.4 percent to C$55.06, as wheat rose on supply concerns after dry weather in the past week hurt crops in the U.S. Agrium, Canada’s No. 2 fertilizer producer, rose 2.3 percent to C$86.92.

 Tethering Issue

 RIM retreated 2.2 percent to C$51.70 after Business Insider said on its website that AT&T’s policy makes the new PlayBook tablet “pretty much useless.”

AT&T said it “only just” received a test version of software that enables e-mail on the Research In Motion Ltd. BlackBerry PlayBook that was released today.

 The issue may be resolved soon and the decline may represent a “short-term buying opportunity.” said Greg Taylor, who helps oversee about C$5 billion ($5.06 billion) as a money manager at Aurion Capital Management in Toronto.

 US

 By Stephen Kirkland and Rita Nazareth

 April 19 (Bloomberg) — Stocks rebounded from the biggest drop in a month after companies from Johnson & Johnson to Burberry Group Plc. reported results that beat analyst estimates. Gold futures touched $1,500 an ounce for the first time as the dollar weakened. Treasuries rose.

 The Standard & Poor’s 500 Index advanced 0.6 percent to 1,312.62 at 4 p.m. in New York as higher-than-forecast housing starts also drove gains. The Stoxx Europe 600 Index increased0.5 percent as Burberry rallied 6 percent. The euro climbed 0.7 percent to $1.4332. Canada’s dollar strengthened versus 14 of 16 major peers as accelerating inflation triggered bets the central bank will boost interest rates.

Johnson & Johnson, the world’s second-biggest seller of health-care products, led gains in the Dow Jones Industrial Average after increasing its full-year forecast. Burberry, Britain’s biggest luxury retailer, said quarterly sales jumped 32 percent and SKF AB, the world’s largest maker of ball bearings, posted record profit. Stocks slid yesterday as S&P cut the long-term U.S. credit outlook to negative.

 “This market has been very resilient,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “Things are better than people think as far as the economy goes. Today’s housing numbers were pretty good. You’ve got a bellwether such as Johnson & Johnson coming out with good news. The market is excited to see that.”

 Earnings Season

 The S&P 500 rebounded after yesterday dropping 1.1 percent, the most since March 16. J&J climbed 3.7 percent after new drugs and a weaker dollar boosted results. Steel Dynamics Inc. added 5.7 percent as its profit also beat projections. Newmont Mining Corp. helped pace gains in raw-material producers, rising 1.3 percent as gold and copper prices increased.

Goldman Sachs Group Inc. rallied as much as 1.5 percent after earnings topped estimates, before erasing gains and retreating 1.3 percent after Rochdale Securities LLC reduced its rating to “neutral” from “buy.”

About 6.6 billion shares changed hands on U.S. exchanges,15 percent less than the three-month average as trading slowed on the Passover holiday.

 A gauge of homebuilders in S&P indexes gained 2.2 percent as all 12 of its stocks advanced. A report today showed building permits, a proxy for future construction, rose 11 percent to a 594,000 pace. They were projected to rise 1.1 percent to a 540,000 annual pace. Housing starts increased 7.2 percent to 549,000, exceeding the 520,000 median forecast of economists surveyed by Bloomberg News.

About three shares gained for each that fell in the Stoxx 600. SKF rallied 6.4 percent. LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker, advanced 4.7 percent as sales beat analysts’ estimates. Novartis AG, the third- biggest stock in the index, gained 3.5 percent after the drugmaker’s sales and profit surpassed projections.

 AAA Rating

 The yield on the 10-year U.S. Treasury note slipped two basis points to 3.36 percent and the 30-year yield lost three basis points to 4.43 percent.

 President Barack Obama began a tour promoting his proposal to cut long-term budget deficits with a new urgency after S&P said yesterday that the nation’s AAA credit rating is in peril.

The divide between Republicans and Democrats in Congress over combating the nation’s debt was spotlighted by S&P’s lowering of the long-term U.S. credit outlook to “negative,” with each side saying the alert bolsters their competing arguments.

 Treasury Secretary Timothy F. Geithner said he’s confident U.S. political leaders will bridge their differences and move toward a long-term plan to narrow record budget deficits and reduce the debt.

 ‘Strong Targets’

 “We have an opportunity now over the next two months to make some real progress,” Geithner said in an interview on Bloomberg Television today. “What we agree on is putting in place strong targets for savings, deficit reduction over a specific time frame with enforceable limits,” he said. Gold for June delivery settled up 0.1 percent at $1.495.10 after earlier reaching $1,500.50.

The dollar weakened against 12 of 16 major peers, losing at least 1 percent versus Norway’s krone and Sweden’s krona. The euro appreciated against 11 of its 16 major counterparts amid speculation the European Central Bank will raise interest rates further.

The loonie, as the Canadian currency is nicknamed, strengthened 0.8 percent to $1.0455 after the consumer price index advanced 3.3 percent in March from a year earlier, compared with a 2.2 percent pace of increase in the previous month, Statistics Canada reported. The median forecast of 25 economists was for a 2.8 percent annual rate.

 Commodities Gain

 Crude oil for May delivery increased for the fourth time in five days, rallying 1 percent to $108.15 a barrel as the weaker dollar lifted commodities. Oil traders have turned $80 crude into the second-biggest bet in the options market as a surge in futures to the highest level since 2008 spurred concern that demand may tumble.

Open interest, the number of contracts held by traders, has more than doubled since January for $80 put options for December 2011 and 2012 as New York futures last week touched a 30-month high of $113.46 a barrel. The two puts, bets that prices will fall, account for 21 percent of the open interest among the top 10 contracts traded on the New York Mercantile Exchange.

 Commodities, Emerging Markets

 The S&P GSCI index of 24 commodities gained 0.3 percent, recouping some of yesterday’s 1.2 percent slide. Cotton retreated 3.9 percent. Wheat futures rose 1.3 percent, a third straight gain, as weather conditions in the U.S. worsened and Germany’s crop estimate was lowered amid a dry spell.

 The MSCI Emerging Markets Index increased 0.6 percent as benchmark gauges in Russia, Turkey, South Africa, Egypt and Hungary rallied more than 1 percent. The Shanghai Composite Index led declines in Asia, sliding 1.9 percent, on concern the U.S. debt outlook may deteriorate further and speculation that China will further tighten monetary policy.

 The MSCI Asia Pacific Index lost 1 percent to the lowest level this month as S&P’s downgrade of the U.S. credit outlook fueled concern that a recovery in the global economy may slow.

 Greece’s two-year yields jumped as much as 39 basis points to a record 20.73 percent as the government sold 1.625 billion euros ($2.33 billion) of bills.

 Have a wonderful evening everyone.

 Hold fast to dreams, for if dreams die, life is a broken, winged bird that cannot fly.

-Langston Hughes (February 1, 1902 – May 22, 1967) 

 Be magnificent!

 As ever,

Nishma for Carolann

 Carolann Steinhoff, B.Sc., CFP, CIM, FCSI 

Senior Vice-President &

Senior Investment Advisor

Dear Friends, 

Today is the 100^th Anniversary of The Fairmont Hotel in San Fransisco.

1907 view of the Fairmont Hotel in San Fransisco

2011 view of Fairmont hotel in San Fransisco

Wikie, a killer whale, swims with her calf in Marineland aquatic park in Antibes, southeastern France. Wikie, who was artificially inseminated at the aquatic park by a killer whale donor from San Diego, gave birth last month to a female calf after an 18-month period of gestation

Market Commentary:

 Canada

By Matt Walcoff

 April 18 (Bloomberg) — Canadian stocks fell for a third day as Standard & Poor’s changed its outlook on the United States’ credit ratings to “negative” and oil and metals producers dropped on falling commodity prices.

 Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.2 percent after Saudi Oil Minister Ali al-Naimi said the “market is oversupplied.” Toronto-Dominion Bank, the country’s second-biggest lender by assets, declined 1 percent after S&P reduced its outlook on the U.S. from “stable,” citing the country’s budget deficit. BlackBerry Research In Motion Ltd.gained 3.3 percent after Barron’s said the shares may double.

 The Standard & Poor’s/TSX Composite Index decreased 96.79 points, or 0.7 percent, to 13,702.33, the lowest close since March 16.

 “It brings into focus there’s some hard choices to be made, and nobody knows if the U.S. is being run by adults or petulant children,” said David Baskin, president of Baskin Financial Services Inc. in Toronto, which manages C$400 million ($414 million). “The U.S. is the biggest economy in the world, and 75 percent of our exports go there.”

The S&P/TSX fell for the first time in five weeks last week as the International Monetary Fund cut its growth forecast for the U.S. and investors speculated China would tighten credit to fight inflation. The People’s Bank of China increased banks’ reserve requirements for the fourth time this year yesterday.

 ‘Material Risk’

 In a public statement, S&P said “there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013.”

 The U.S. projects its deficit will total 10.9 percent of gross domestic product this year. President Barack Obama has set a target of reducing the deficit to 2.5 percent of GDP by 2015.

 The S&P/TSX Energy Index dropped to the lowest since Jan.28 as crude declined for the first time in four days.

 Suncor lost 2.2 percent to C$41.14. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, slumped 1.5 percent to C$22.04. Cenovus Energy Inc., Canada’s fifth-biggest energy company, decreased 2.1 percent to C$35.18.

 An index of S&P/TSX financial companies retreated to the lowest level in a month. TD fell 1 percent to C$81.28. Royal Bank of Canada, the country’s largest lender by assets, slipped 0.5 percent to C$59.73. Manulife Financial Corp., North America’s fourth-biggest insurer, dropped 1.6 percent to C$16.18.

 Metal, Coal Producers

 S&P/TSX base-metals and coal producers fell for a sixth day, the longest streak of declines since May, after China raised banks’ reserve requirement to a record 20.5 percent from 20 percent. Copper also slipped for a sixth day.

 Teck Resources Ltd., Canada’s largest base-metals and coal producer, retreated for a ninth day, the longest streak of losses since 2006, falling 2.1 percent to C$48.77. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, decreased 1.9 percent to C$116.80. Grande Cache Coal Corp., which mines in Alberta, sank 7.5 percent to C$8.31.

 Capstone Mining Corp., which produces copper in Mexico, slumped 4.3 percent to C$4.03 after agreeing to buy Far West Mining Ltd. for C$725 million in cash and stock. Far West, which is developing a mine in Chile, surged 7.3 percent to a record C$8.24.

 Gold, U.S. Dollar

 Precious-metals producers retreated as the U.S. dollar rose as much as 1.9 percent, the most since November, against the euro. Greek and Portuguese bond yields extended records on concern about the possibility of sovereign-debt defaults.

 Kinross Gold Corp., Canada’s third-largest gold producer, fell 2.5 percent to C$14.67. Silver reseller Silver Wheaton Corp. dropped 2 percent to C$40.10. First Majestic Silver Corp., which mines in Mexico, declined 3.5 percent to C$21.91. Eastern Platinum Ltd., which mines in South Africa, tumbled 15 percent, the most since November 2008, to C$1.10 after saying first-quarter production fell 17 percent from last year.

 Lumber producers Canfor Corp. and West Fraser Timber Co. dropped after Paul C. Quinn, an analyst at Royal Bank of Canada, cut his ratings on the shares to “underperform” from “sector perform.” In a note to clients, Quinn cited the decline in lumber prices and rise of the Canadian dollar.

West Fraser, Canada’s largest lumber producer, declined 6.8, the most since August 2009, to C$54.64. Canfor plunged 9.8 percent, also the most in 20 months, to C$12.56.

RIM rose 3.3 percent from a five-month low to C$52.84 after Barron’s said the shares may gain as the company releases new products. Canada’s biggest technology company has fallen eight- straight weeks, the most since 2006, as it forecast profit below analysts’ estimates and its PlayBook tablet generated negative reviews from some media.

 US

 By Rita Nazareth, Cordell Eddings and Inyoung Hwang

 April 18 (Bloomberg) — U.S. stocks sank the most in a month, oil slid and gold rose to a record after Standard & Poor’s cut the American credit outlook to negative and concern about Europe’s debt crisis grew. Greek two-year bond yields surged to 20 percent for the first time since at least 1998.

 The S&P 500 tumbled 1.1 percent to 1,305.14 at 4 p.m. in New York, its worst drop since March 16, and the Stoxx Europe 600 Index slid 1.7 percent. Ten-year Treasury notes gained, sending yields down four basis points to 3.37 percent, amid speculation S&P’s move will motivate lawmakers to pass a budget that requires less borrowing. The euro lost 1.4 percent to $1.4234 and Portuguese debt-insurance costs reached a record.

The S&P GSCI index of commodities slid 1.2 percent as oil sank.

 S&P assigned a one-in-three chance it will lower the U.S. rating in the next two years, saying the credit crisis and recession that began in 2008 worsened a deterioration in public finances. Budget differences among Democrats and Republicans remain wide and it may take until after the 2012 elections to get a proposal that addresses the concern, S&P said.

 The fact that the Dow and S&P and Nasdaq fell so sharply after they came out and said that sends a warning to politicians that there are going to be dire consequences if they don’t get their act together,” said Barton Biggs, who runs New York-based hedge fund Traxis Partners LP, in an interview on Bloomberg Television’s “Street Smart.” “I think they will get their act together. We have a system of government that is painful, but in the long run does the right things.”

 Broad Decline

 Gauges of energy and financial companies had the biggest declines among the 10 main groups in the S&P 500, all of which dropped. Caterpillar Inc., Bank of America Corp. and Alcoa Inc. lost at least 2.3 percent to lead declines in 29 of 30 stocks in the Dow Jones Industrial Average, which slid 140.24 points, or 1.1 percent, to 12,201.59. Gap Inc. slumped 3 percent after Goldman Sachs cut its rating on the shares to “sell” from “neutral” and said it sees long-term declines in comparable- store sales. The Nasdaq Composite Index lost 1.1 percent.

 The S&P 500 has surged 93 percent from its bear-market low in March 2009 amid higher-than-estimated earnings and government stimulus measures. The Federal Reserve and U.S. agencies have lent, spent or guaranteed about $8.2 trillion to lift the economy from the worst slump since the Great Depression, according to data compiled by Bloomberg.

 Global Retreat

 The MSCI All-Country World Index of shares in 45 countries tumbled 1.5 percent. Global stocks also slid after China increased banks’ reserve requirements to lock up cash and cool inflation, and central bank Governor Zhou Xiaochuan said monetary tightening will continue for “some time.”

 Thirty-year Treasury yields lost two basis points to 4.45 percent. Two-year yields slipped three basis points to 0.67 percent. The dollar slid 0.6 percent to 82.66 yen, the lowest level of the month, while still strengthening against 14 of 16 major peers.

 The cost to protect U.S. corporate bonds from default rose to the highest level this month. The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, added 1.6 basis points to a mid-price of 95.62 basis points, according to index administrator Markit Group Ltd.

 S&P cut its long-term U.S. outlook from stable, while affirming its ‘AAA’ long-term and ‘A-1+’ short-term ratings.

 ‘Fiscal Destiny’

 “This is another indication of the need for the U.S. to better control its fiscal destiny, both for its sake and that of the global economy,” said Mohamed El-Erian, chief executive officer at Newport Beach, California-based Pacific Investment Management Co., the world’s biggest manager of bond funds.

 “Absent credible medium-term fiscal reform, every segment of U.S. society would be faced with higher borrowing costs, a weaker dollar and a less bright outlook for employment, investment and growth.”

 S&P said in its statement that there is a “material risk” U.S. officials may not reach an agreement on how to address budgetary challenges by 2013.

 Under President Barack Obama’s fiscal year 2012 budget, released in February, the total debt subject to the ceiling would be $20.8 trillion in 2016. The plan House Republicans approved April 15, written by Budget Committee Chairman Paul Ryan, would need a debt ceiling of at least $19.5 trillion, according to data compiled by Bloomberg Government.

 `Shot Across the Bow’

 “It’s truly a shot across the bow and a message to Washington, which has been clowning around on this and playing politics when they should toss ideology aside and focus on achievement,” said David Ader, head of government bond strategy at Stamford, Connecticut-based CRT Capital Group LLC. “It’s a big deal. They’ve put us on notice.”

 Treasury Assistant Secretary Mary Miller said today that S&P’s outlook on the U.S. credit rating “underestimates” the nation’s leadership.

 “We believe S&P’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” Miller said in a statement.

 About 18 stocks declined for every one that gained in the Stoxx Europe 600. Commerzbank AG, Spain’s biggest lender, and France’s Societe Generale SA fell more than 3.8 percent. Smith & Nephew Plc, which had been identified as a bid target for Johnson & Johnson by analysts at Sanford C. Bernstein & Co., Morgan Stanley and Investec Securities, declined 3 percent after Synthes Inc. said it’s in talks about a possible takeover by J&J.

Euro, Greek Bonds

The euro depreciated against 13 of its 16 major counterparts, losing 1.9 percent versus the yen. Portugal’s 10- year yield climbed to a record 584 basis points above benchmark German bunds while the Greek spread reached 1,132 basis points, the most since Bloomberg began collecting the data in 1998.    

Credit-default swaps insuring Greek bonds jumped 66 basis points to 1,221, signaling a 64.5 percent chance of a default within five years, while those for Portugal climbed 18.5 basis points to 616.5, according to CMA.

Restructuring of Greece’s debt is inevitable and only a question of time, Die Welt cited a Greek government minister as saying, without naming the minister. Greece isn’t discussing restructuring its debt, Finance Minister George Papaconstantinou said April 16 in Washington. European Central Bank Governing Council members signaled over the weekend they will keep tightening monetary policy this year to curb inflation.

 ‘A Lot of Risks’

“The European story has a lot of risks to it as Germany is very strong but peripheral Europe is clearly quite weak, so the last thing they need is higher interest rates,” Adrian Mowat, JPMorgan Chase & Co.’s Hong Kong-based chief Asia and emerging- markets strategist, said in a Bloomberg Television interview.

 The yield on Germany’s 10-year bund declined 13 basis points to 3.25 percent. The 10-year gilt yield slipped four basis points to 3.56 percent. The pound fell 0.4 percent versus the dollar after Ernst & Young LLP’s Item Club cut its economic outlook for the U.K.

 Oil fell for the first time in four days in New York after Saudi Arabia, the world’s biggest crude exporter, said the global market has enough supplies to meet demand. Crude for May delivery slumped 2.3 percent to $107.12 a barrel.

 Cocoa for July delivery declined 3.2 percent to $3,057 a metric ton on ICE Futures U.S. in New York amid concern demand for commodities  may slow as China fights inflation. Sugar and coffee also fell, while wheat, silver and corn gains. Gold for June delivery climbed 0.5 percent to $1,492.90.

Have a wonderful evening everyone.

 All the religions of the world, while they may differ in other respects, unitedly proclaim that nothing lives in this world but Truth.
                                                       – Mohandas Gandhi

Be magnificent!

 As ever,

 Nishma for Carolann

 Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends, 

 Leonardo di ser Piero da Vinci (April 15, 1452 – May 2, 1519)

• He had a keen eye and quick mind that led him to make important scientific discoveries, yet he never published his ideas.
• He was a gentle vegetarian who loved animals and despised war, yet he worked as a military engineer to invent advanced and deadly weapons.
• He was one of the greatest painters of the Italian Renaissance, yet he left only a handful of completed paintings.

 Paintings of Leonardo da Vinci 

April 15, 2011

    

 

 

 

 

 

 

 

 

Market Commentary:

Canada

By Matt Walcoff

 April 15 (Bloomberg) — Canadian stocks headed toward their first weekly decline in five weeks as banks fell after Moody’s Investors Service cut Ireland’s credit rating by two levels and Bank of American Corp. missed analysts’ profit forecasts.

 Toronto-Dominion Bank, Canada’s second-largest lender by assets, dropped 0.8 percent. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, climbed 1.9 percent as crude oil rallied. Iamgold Corp., which produces gold in Africa and South America, lost 6.2 percent after agreeing to sell its stake in two Ghanaian mines.

 The Standard & Poor’s/TSX Composite Index rose 1.65 points, or less than 0.1 percent, to 13,823.45 at 3:25 p.m. in Toronto. The equity benchmark has declined 2.7 percent this week.

The S&P/TSX retreated this week after the International Monetary Fund cut its growth forecast for the U.S. and concern mounted that China will further tighten credit to restrain inflation. The index has been outgained by the S&P 500 this year, 4.9 percent to 2.8 percent, after outperforming its U.S. counterpart for seven straight years.

 US

 By Michael P. Regan and Rita Nazareth

 April 15 (Bloomberg) — U.S. stocks rose, trimming a second straight weekly drop for the Standard & Poor’s 500 Index, and oil rallied after data on consumer confidence and manufacturing topped economist estimates. Treasuries gained and the dollar advanced versus the euro amid concern over Europe’s debt crisis.

 The S&P 500 climbed 0.4 percent to 1,319.68 at 4 p.m. in New York, paring its weekly loss to 0.6 percent. Ten-year Treasury yields slid nine basis points to 3.41 percent and the euro slumped 0.4 percent to $1.4426, while gold rose to a record and silver touched a 31-year high. Ireland’s 10-year yield added 37 basis points to 9.71 percent after the nation’s credit rating was downgraded. Oil jumped to almost $110 a barrel in New York.

 Optimism about the health of the economy grew after a gauge of consumer sentiment rebounded from a 16-month low, U.S. industrial production rose more than forecast and the Federal Reserve’s measure of New York-area manufacturing reached the highest level in a year. The data helped the market reverse an early drop spurred by lower-than-estimated profit at Google Inc., which slid 8.3 percent for its worst drop since 2008.

 “The economy continues to expand and the recovery is sustaining,” said Russ Koesterich, the San Francisco-based head of investment strategy for scientific active equities at BlackRock Inc., which oversees $3.56 trillion as the world’s largest asset manager. “It’s not going to be a bad earnings season. It’s just that a lot of the good news is already baked in. It’s going to be a choppy market with an upward bias.”

 S&P 500 Gains

 Utilities and health-care stocks led gains in nine of 10 industries in the S&P 500. Only technology companies retreated as Google dragged the group lower even as 54 of 75 companies in the S&P 500 Information Technology Index gained. Merck & Co. and DuPont Co. climbed at least 1.4 percent to lead the Dow Jones Industrial Average’s advance.

 Stocks turned higher after the Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 69.6, above forecasts. The gauge was projected to climb to 68.8, according to the median forecast of economists surveyed by Bloomberg. The Fed Bank of New York’s general economic index rose to 21.7, topping estimates.

 Benchmark 10-year Treasury notes capped their first weekly gain in a month after President Barack Obama pledged this week to cut the deficit by $4 trillion within 12 years. Two-year Treasury note yields slipped eight basis points to 0.69 percent today.

 Dollar, Euro

 While climbing against the euro, the dollar fell versus 10 of 16 major peers. The currency slipped more than 0.4 percent against the New Zealand dollar and Japanese yen.

 The euro weakened versus all 16 major peers and Greece’s 10-year yield climbed to a record high of 13.84 percent, with costs to protect the nation’s debt also reaching an all-time high. A Greek debt restructuring “would not be a disaster” and Germany would back a voluntary effort to ease the struggling euro member’s payment terms, German Deputy Foreign Minister Werner Hoyer said.

 Moody’s Investors Service signaled it may reduce Ireland to junk after cutting the rating two levels to the lowest investment grade.

 European stocks climbed, boosted by results at companies from Nestle SA to Syngenta AG and the U.S. consumer confidence report. Nestle rallied 2.4 percent after the world’s largest food company reported first-quarter organic sales growth that topped analyst estimates.

 Have a wonderful weekend everyone.

 Be magnificent!

 It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.
                           –Leonardo da Vinci (April 15, 1452 – May 2, 1519)

                      

As ever,

 Nishma for Carolann

 Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Dear Friends,

 

Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.

 –Buddha

  

 

 

 

 

 

A daisy floats in a rain barrel on April 14 in Kaufbeuren, southern Germany. (Karl Josef  Hildenbrand/AFP/Getty Images) 

Market Commentary:

 Canada

By Matt Walcoff

Most Canadian stocks fell as U.S. initial jobless claims topped forecasts and concern over European debt intensified.

Canadian Natural Resources Ltd. (CNQ) declined 2 percent, leading energy shares lower. Research In Motion Ltd. (RIM) retreated 3.3 percent after reviewers from the Wall Street Journal, New York Times and Wired criticized its PlayBook tablet computer.

 Barrick Gold Corp. (ABX), the world’s largest gold producer, rose 2.5 percent as precious metals gained.

 The Standard & Poor’s/TSX Composite Index climbed 0.27 point points, or less than 0.1 percent, to 13,833.91 at 3:13 p.m. in Toronto. Among S&P/TSX stocks, 111 advanced, 131 declined and six were unchanged.

 “Over in Europe, we’ve seen spreads widen on the bonds, and people are wondering if there will be restructuring of debt,” said Jeffrey Bradacs, a Toronto-based senior investment analyst for a team at Manulife Asset Management that oversees C$1.7 billion ($1.8 billion). “Some people seeing the risk of that are pulling back” from equities and commodities.

 The index lost 2.6 percent this week through yesterday after four straight weekly gains. Oil and copper stocks have declined after the International Monetary Fund cut its growth forecast for the U.S. and investors speculated China may raise further tighten credit.

Die Welt today quoted German Finance Minister Wolfgang Schaeuble as saying Greece may need to renegotiate its debt burden if an audit in June raises doubt on its ability to pay creditors. Greek bond yields climbed to the highest since 1998 and the cost to insure against defaults on Greek government debt increased to a record.

 In the U.S., 412,000 people filed first-time jobless claims last week, the Labor Department said in Washington. The figure exceeded all 49 forecasts in a Bloomberg survey of economists.

 Canadian factory sales retreated 1.5 percent in February, Statistics Canada said. Economists had forecast a decrease of 0.5 percent, according to the median of 21 estimates in a Bloomberg survey.

 Canadian Natural dropped 2 percent to C$42.67 for a fourth- straight loss. Pacific Rubiales Energy Corp. (PRE), which produces oil in Colombia, declined 1.8 percent to C$27.94. Talisman Energy Inc. (TLM), an oil and gas producer with operations in North America, the North Sea and Indonesia, decreased 0.8 percent to C$22.19.

 Precious Metals

Gold and silver advanced as the U.S. dollar retreated to a 16-month low against a basket of world currencies.

 “People, when they look around the globe, with the concern in Europe and concern with the U.S. dollar and its deficit, are attracted to gold,” Bradacs said.

Barrick increased 2.5 percent to C$51.38. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, climbed 2.2 percent to C$51.81.

 Nautilus Minerals Inc. (NUS), which explores for gold and copper on the ocean floor, surged 14 percent to C$3.34 after jumping 18 percent yesterday. Nautilus said it has formed a joint venture with Bremen, Germany-based shipping company Harren & Partner to operate a vessel that will serve as Nautilus’s operational base.

 Pan American Silver Corp. (PAA), which produces silver and base metals in Latin America, sank 9.8 percent to C$35.70 after Nicolas Fernandez, a spokesman for Bolivia’s state mining company, said the country will expropriate mines privatized by previous governments. The shares’ tumble was the biggest in a day since August 2009.

Base Metals

 Teck Resources Inc., Canada’s largest base-metals and coal producer, fell 1 percent to C$50.39 as copper dropped after the China Securities Journal said the country is likely to raise reserve requirements for banks in the “near future.” Teck shares have declined seven straight days, the longest streak since January 2009.

 First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, lost 1.8 percent to C$119.16, extending its weekly drop to 13 percent.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 1 percent to C$53.95. Wheat futures retreated for a fourth day as meteorologists forecast rain for drought-stricken Kansas.

 RIM, Canada’s largest technology company, retreated 3.3 percent to a five-month low of C$51.07. David Pogue of the New York Times called the first version of the PlayBook “half- baked,” while Mike Isaac of Wired said it has “serious gaps in key areas like app selection and Flash stability.”

 Shaw Communications Inc. (SJR/B), the country’s biggest cable and satellite television provider by subscribers, dropped 2.5 C$19.30 after slumping 3.7 percent yesterday. The company reported second-quarter sales yesterday that trailed analyst estimates. At least five analysts reduced their share-price estimates on Shaw today.

 US

By Rita Nazareth

 U.S. stocks rose, erasing an early slump, as the House approved a spending bill that will avert a government shutdown and Supervalu Inc. (SVU) led a rally in consumer- staples shares after earnings topped analysts’ estimates.

 Supervalu surged 17 percent for the top gain in the Standard & Poor’s 500 Index after the owner of Save-A-Lot and Albertsons grocery stores also projected full-year profit that beat projections. Exxon Mobil Corp. (XOM) and Chevron Corp. climbed at least 0.3 percent as oil rose for a second day on reports that Saudi Arabia reduced output this month. Goldman Sachs Group Inc. (GS) slid 2.7 percent after Senator Carl Levin requested a federal probe of the bank’s dealings in mortgage securities.

 The S&P 500 increased less than 0.1 percent to 1,314.52 at 4 p.m. in New York, erasing an earlier 0.9 percent decline. The benchmark gauge yesterday halted a four-day slump, its longest since November, as a Federal Reserve report fueled optimism about the economy. The Dow Jones Industrial Average climbed 14.16 points, or 0.1 percent, to 12,285.15 today.

 “The government is still running,” said Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co. “That’s a sigh of relief. Investors are focusing on the good economic fundamentals and solid corporate earnings. Yes, we do have global issues, European debt concern, higher commodities prices. Still, the stock market is very resilient.”2011 Performance

 The S&P 500 has risen 4.5 percent in 2011, extending last year’s 13 percent gain, amid government stimulus measures and higher-than-estimated corporate profits. The index, which has gained as much as 99 percent since March 2009, last week rose to near the highest closing level for the rally, according to data compiled by Bloomberg. The S&P 500 advanced to 1,335.54 on April 6, or 7.47 points below the high on Feb. 18. Since then, it has fallen 2.1 percent through yesterday.

 Earlier declines came after more Americans unexpectedly filed first-time claims for unemployment insurance last week, reflecting greater-than-normal volatility at the end of the quarter. Applications for jobless benefits rose 27,000 in the week ended April 9 to 412,000, the most in two months, Labor Department figures showed. Economists projected claims would be little changed at 380,000, according to the median estimate in a Bloomberg News survey.

Have a wonderful evening everyone.

Be magnificent!

 As ever,

Nishma for Carolann

 The wisest people follow their own direction

 –Euripides (480 BC – 406 BC)

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President & Senior Investment Advisor

Dear Friends, 

 Gary and I are going away for  the next week or so, leaving tonight for London….I wish you and yours a very Happy Easter or Passover – whatever you are celebrating this time of year, may it be with family and friends and may you find peace and joy.  My team is here to help you and will be in contact with me throughout. 

 photos of the day

April 13, 2011

Cyclists ride during the first stage of the Tour of Castilla and Leon cycling race over 108 miles between Medina de Rioseco and Palencia, Spain.I. Lopez/AP

The sun rises over the Ob River in the early morning, near the city of Novosibirsk, about 1,750 miles east of Moscow.

Ilnar Salakhiev/AP

Opera singer Alla Vasilevitsky performs on the Bridge of Strings at the entrance to Jerusalem. Four Israeli female opera singers, including Vasilevitsky, braved unfamiliar territory by standing at the prominent outdoor Jerusalem landmark to sing classical arias in the midday traffic to promote an upcoming opera festival.

Ronen Zvulun/Reuters

Market Commentary:

Canada

By Matt Walcoff

April 13 (Bloomberg) — Canadian stocks rose for the first time in three days, led by banks, as the U.S. reported a ninth- straight monthly increase in retail sales.

Royal Bank of Canada, Canada’s largest lender by assets, advanced 1 percent after U.S. retail sales excluding automobiles and service stations rose more than most economists had forecast. Teck Resources Ltd. fell 1.9 percent as copper dropped the most since March 9. BlackBerry maker Research In Motion Ltd. climbed 2.3 percent after DigiTimes said the company “has placed large-volume orders” for its PlayBook tablet computer from manufacturers.

The Standard & Poor’s/TSX Composite Index gained 32.24 points, or 0.2 percent, from a three-week low to 13,833.64.

The retail sales report “shows there is some form of recovery down south of us,” Arthur Salzer, who helps oversee C$300 million ($312 million) as a money manager at MacNicol & Associates Asset Management Inc. in Toronto.

The stock benchmark tumbled 2.9 percent April 11 and yesterday for the biggest two-day drop since June. Oil declined 5.8 percent and copper lost 2.6 percent as the International Monetary Fund cut its growth forecast for the U.S. and Japan raised the severity rating of its nuclear crisis to the highest level.

“With the oil price coming down a little bit, people are being more optimistic it’s not going to have a negative impact on the economy,” said Jennifer Radman, who helps oversee C$1 billion as a money manager at Caldwell Investment Management Ltd. in Toronto. “When we get oil prices above a certain level, in the $110 mark, you really start to see an economic drag.”                        

The S&P/TSX Financials Index rose the most in two weeks after the U.S. Commerce Department released the retail-sales data.

Royal Bank gained 1 percent to C$60.42. Canadian Imperial Bank of Commerce, Canada’s fifth-largest lender by assets, advanced 0.7 percent to C$83.87, ending a six-day streak of losses. Mutual-fund company IGM Financial Inc. increased 1.7 percent to C$48.50.

RIM climbed 2.3 percent from a five-month low to C$52.79 after DigiTimes said Quanta Computer Inc. may ship more than 1 million PlayBook tablets a month in the third quarter. The Taipei-based business-news website cited unnamed sources from component makers.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose for the first time in seven days, climbing 0.9 percent to C$54.47. Wheat rebounded from yesterday’s 4.9 percent plunge on speculation dry weather will reduce yields in the U.S.

All major base metals traded on the London Metal Exchange retreated on concern China, the world’s biggest user of the raw materials, will take more steps to tighten credit and fight inflation.

Teck fell for a sixth day, losing 1.9 percent to C$50.90.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 2.9 percent to C$121.30 to extend its weekly drop to 11 percent. European Goldfields Ltd., which mines zinc, lead and silver, sank 6.7 percent to C$10.55, the lowest price since September.

Most S&P/TSX energy companies gained as natural gas advanced 1.1 percent and crude oil 0.8 percent.

Enbridge Inc., Canada’s largest pipeline company, increased 1 percent to C$60.05. Cenovus Energy Inc., Canada’s fifth- biggest energy company, climbed 0.6 percent to C$36.34. Oil- sands developer BlackPearl Resources Inc. surged 6.1 percent to C$7.81.

First Majestic Silver Corp., which mines in Mexico, soared 12 percent to C$22.14 as the metal rebounded from a 1.3 percent decline yesterday. Shares of the Vancouver-based company had plunged 16 percent in the previous two days.

 US

By Rita Nazareth

April 13 (Bloomberg) — U.S. stocks rose, halting the longest Standard & Poor’s 500 Index slump since November, as a Federal Reserve report fueled optimism the economy can weather President Barack Obama’s plan to cut spending and raise taxes.

Caterpillar Inc. and Kraft Foods Inc. led gains in the Dow Jones Industrial Average as the Fed said most of its districts reported improvements in the economy were widespread across sectors. Riverbed Technology Inc. soared 12 percent as the computer networking company’s profit beat analyst estimates.

Lockheed Martin Corp. and Raytheon Co. dropped at least 2.5 percent as Obama proposed cutting $400 billion from the Pentagon’s budget through 2023.

The S&P 500 snapped a four-day slump, rising less than 0.1 percent to 1,314.41 at 4 p.m. in New York. The Dow average increased 7.41 points, or 0.1 percent, to 12,270.99 today.

Benchmark indexes fell earlier as details of Obama’s plan emerged, then turned higher after the Fed’s Beige Book said the economy and labor markets improved.

“The economy is in good shape,” said Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., which had about $110 billion in client assets.

“The evidence of the last few years has been that whenever the government leads in spending money, the private sector follows.”                    

 The S&P 500 has risen 4.5 percent in 2011, extending last year’s 13 percent gain, amid government stimulus measures and higher-than-estimated corporate profits. The index has surged 26 percent since Fed Chairman Ben S. Bernanke’s suggested on Aug. 27 that he would pursue a second round of asset purchases to stimulate the economy, a tactic known as quantitative easing.

Obama, presenting his second plan in as many months to reduce the nation’s long-term debt today, vowed to cut $4 trillion in cumulative deficits within 12 years through a combination of spending cuts and tax increases.

Equities began reversing losses after the Fed said the economy expanded at a “moderate” pace across much of the U.S. in February and March, led by manufacturing, with labor markets showing improvements in most regions.

“While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors,” the Fed said today in its Beige Book report.

While higher commodity costs compelled sellers to try to raise prices, pressures to increase wages were “weak or subdued.”

 Earlier gains in stocks today came as sales at U.S. retailers in March indicated the improving job market is helping Americans cope with higher costs for fuel and food. Purchases increased 0.4 percent following a 1.1 percent February gain that was larger than previously estimated, Commerce Department figures showed. The median forecast of 82 economists surveyed by Bloomberg News was a 0.5 percent rise. Sales excluding automobiles and gasoline advanced more than projected.

“The tide is still a tide towards normalcy as far as the economy goes,” said David Kelly, who helps oversee $405 billion as chief market strategist at JPMorgan Funds in New York.

“Consumers have a lot more energy than people thought. We’re going to see more positive than negative surprises. Same goes for a steady improvement in corporate profits.” A gauge of consumer and apparel companies in the S&P 500 rose 1.3 percent, the biggest gain within 24 industries.

 Coach Inc., the largest U.S. maker of luxury leather handbags, added 3.6 percent to $53.97. Nike Inc., the world’s largest sporting goods company, rose 1.6 percent to $79.41.

Riverbed Technology soared 12 percent to $34.74. The computer networking technology company said that, excluding some items, it earned at least 19 cents a share in the first quarter.

That topped the average analyst estimate of 18 cents in a Bloomberg survey.

GameStop Corp. rose 6.6 percent to $25.36, the biggest advance in the S&P 500. The world’s largest video-game retailer is facing a digital transition similar to one undertaken by Netflix Inc., according to Tony Wible, an analyst at Janney Montgomery Scott LLC. Wible cited 10 reasons to buy the company, including increased number of users, digital investments and new game systems.

MGM Resorts International rallied 8.6 percent to $13.70, the most in the Russell 1000 Index. The casino company founded by billionaire Kirk Kerkorian will gain control over its Macau joint venture through steps including an initial public offering of some shares held by partner Pansy Ho.                    

 Military contractors declined as President Obama proposed to cut $400 billion from current and future defense spending.

Lockheed Martin dropped 2.6 percent to $78.31. Raytheon slipped 2.9 percent to $48.68. General Dynamics Corp. fell 1.5 percent to $71.81.

For-profit education stocks dropped as Democrats in Congress agreed to cut Pell grants for students in summer school. “Although the maximum Pell Grant amount is unchanged at $5,550, Congress is about to end year-round Pell Grants,” wrote Arvind Bhatia, an analyst at Sterne Agee & Leach Inc., in an e- mail. Strayer Education Inc. slumped 7.1 percent to $124.38, the biggest decline in the Russell 1000 Index. Apollo Group Inc. retreated 3 percent to $39.88.

Banks had the biggest decline in the S&P 500 within 24 industries, slumping 1.7 percent as a group, as regulators said the 14 largest U.S. mortgage servicers must pay back homeowners of botched foreclosures.

The 14 largest U.S. mortgage servicers must pay back homeowners for losses from foreclosures or loans that were mishandled in the wake of the housing collapse, according to a consent decree released today. The agreement between the servicers and U.S. regulators imposes more substantial penalties than early reports of the deal indicated. It could also help the U.S. Justice Department determine the size and scope of any future fines for the flawed practices, regulators said.

The banks, including JPMorgan Chase & Co. and Wells Fargo & Co., agreed in the settlement to conduct a review of all loans that went into foreclosure in 2009 and 2010. They also agreed to improve their foreclosure, loan modification and refinancing procedures.

JPMorgan Chase & Co. fell 0.8 percent to $46.25, reversing an earlier rally triggered by higher-than-forecast earnings, as Chief Executive Officer Jamie Dimon signaled the lender will not boost dividends in the next couple of quarters.

Have a wonderful evening everyone.

 Be magnificent!

 We gain our freedom when we realize our most true nature.

The man who is an artist gains his artistic freedom when he discovers the true ideal of art.

 

  -Rabindranath Tagore, 1861-1901

As ever,

 Carolann

 Always bear in mind that your own

resolution to succeed is more important

than any other one thing.

 -Abraham Lincoln, 1809-1865

 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor