Month: June 2011

Dear Friends,

Tangents:

Music and mud: Glastonbury Festival 2011

Glastonbury, a festival held at Worthy Farm in England, has become Europe’s largest such gathering for music fans. Its five-day run ended Sunday, after entertaining nearly 175,000 fans. Heavy rain and mud greeted the attendees, who paid 195 pounds (about $310) for a basic ticket compared to the 1 pound when the show began in 1970. The next festival will take place in 2013. – Lloyd Young

Market Commentary:

 Canada

By Matt Walcoff

June 30 (Bloomberg) — Canadian stocks rose for a fourth day, trimming the biggest quarterly drop since 2008, as energy producers and financial shares advanced on speculation Greece will avoid defaulting on its debt.

Manulife Financial Corp., Canada’s largest insurer, increased 3 percent after Germany’s biggest banks and insurers and government agreed to reinvest money from maturing debt holdings into new Greek bonds. Nexen Inc., an oil and gas producer with operations on five continents, climbed 2 percent as natural gas futures rallied. Contract electronics manufacturer Celestica Inc. gained 5.3 percent after a Deutsche Bank analyst raised her rating on the shares.

The Standard & Poor’s/TSX Composite Index rose 55.93 points, or 0.4 percent, to 13,244.87 at 2:24 a.m. in Toronto, extending its weekly gain to 2.4 percent. The S&P/TSX has advanced this week as Greek lawmakers voted yesterday to approve an austerity package.

“There was likely some anxiety going into that Greek vote,” said Gareth Watson, vice president of investment management at Richardson GMP Ltd. in Toronto, which oversees about C$16 billion ($16.6 billion). “We’re just kind of carrying through today.”

The S&P/TSX retreated 6.6 percent this quarter through yesterday, the most since the fourth quarter of 2008. The stock benchmark declined as data on U.S. unemployment and manufacturing trailed economists’ forecasts, concern about Europe’s debt crisis intensified and crude oil fell 9.1 percent.

Germany’s biggest banks and insurers and its government have agreed on a draft proposal to reinvest money from maturing Greek debt into new bonds, Finance Minister Wolfgang Schaeuble said in Berlin today.

Seven of eight S&P/TSX banks and Canada’s three largest insurers rose after the German agreement. Also today, Statistics Canada reported gross domestic product was unchanged in April.

Most economists in a Bloomberg survey had forecast a decline.

Manulife Financial Corp., North America’s fourth-largest insurer, gained 3 percent to C$16.94. Toronto-Dominion Bank, Canada’s second-biggest lender by assets, advanced 0.9 percent to C$81.59. Sun Life Financial Inc., the country’s No. 3 insurer, increased 1.9 percent to C$28.82.

The S&P/TSX Energy Index climbed for a fourth day after U.S. natural gas inventories fell more than analysts estimated last week. Nexen, which operates on five continents, rose 2 percent to C$21.56. Cenovus Energy Inc., Canada’s fifth-largest energy company, gained 1.6 percent to C$36. Talisman Energy Inc., which operates in North America, the North Sea and Indonesia, advanced 1.9 percent to C$19.68.

Fertilizer producers retreated after the U.S. Agriculture Department said U.S. corn inventories totaled 3.67 billion bushels on June 1, surpassing all 25 forecasts in a Bloomberg survey of analysts.

Farmers planted about 92.3 million acres of corn, topping the USDA’s estimate from earlier this month of 90.7 million acres. Corn fell the most allowed on the Chicago Board of Trade.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped for the first time in six days, losing 1.3 percent to C$54.43. Agrium Inc., an agricultural-products retailer and fertilizer producer, declined 1.9 percent to C$83.99.

Rubicon Minerals Corp., which explores for gold in Canada, slumped 9 percent to C$3.24 after plunging 24 percent yesterday as the company increased its cost estimates for its Phoenix Gold Project. Catherine Gignac, a Toronto-based analyst at NCP Northland Capital Partners Inc., cut her rating to “sector perform” from “sector outperform” today.

Among other mining stocks, First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, increased 3.1 percent to C$139.78 as the metal added to an eight-week high.

Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, rose for a second day, gaining 6.4 percent to C$2.66 two days after closing at a 12-month low.

Celestica rallied 5.3 percent to C$8.43 after Sherri Scribner, an analyst at Deutsche Bank, boosted her rating on the share to “buy” from “hold.” The stock plunged 23 percent this quarter through yesterday as its largest customer, Research In Motion Ltd., sank 49 percent.

Power-plant owner Capital Power Corp. slumped 3.8 percent, the most intraday in 23 months, to C$25.01, after saying it will sell 8 million shares at C$25.10 a share.

An index of consumer-discretionary stocks in the S&P/TSX advanced after analysts in a Bloomberg survey said U.S. auto sales probably rebounded in this month.

Magna International Inc., Canada’s largest auto-parts maker, climbed for an eighth day, the longest streak in 25 months, rallying 1.7 percent to C$52.29. Linamar Corp., the second-biggest parts manufacturer in the country, rose 3.9 percent to C$21.81.

Shaw Communications Inc., Canada’s largest cable and satellite television provider by subscribers, gained 1.5 percent to C$21.91 a day after reporting earnings that surpassed analysts’ estimates.

 US

By Rita Nazareth and Cecile Vannucci

June 30 (Bloomberg) — U.S. stocks rallied, giving the Standard & Poor’s 500 Index its biggest four-day gain since September, amid increased optimism Greece will avoid default and after American business activity improved.

Industrial, energy and technology companies led gains in the S&P 500, rising at least 1.4 percent, as investors bought stocks tied to economic growth. Caterpillar Inc., United Technologies Corp. and 3M Co. climbed at least 1.8 percent to help the Dow Jones Industrial Average erase its quarterly loss.

Hewlett-Packard Co. added 2.4 percent after a report that private-equity firms want the computer maker to split up.

The S&P 500 advanced 1 percent to 1,320.64 at 4 p.m. in New York, rising 4.1 percent in four days. The Dow average gained 152.92 points, or 1.3 percent, to 12,414.34 today.

“It’s not surprising that the market is rebounding,” said Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas, which oversees $761 billion. “The Greece situation will work out, concerns about a soft patch were overdone and earnings will continue to be strong. The market will do better in the second half.”

The Dow fell 1.2 percent in June amid concern about Europe’s debt crisis and weaker-than-expected economic data. Over the last century, the 30-stock gauge had an average gain of 1.4 percent in July, according to data compiled by Bespoke Investment Group. The index was up 7.2 percent in 2011 amid better-than-estimated earnings and government stimulus measures.

Global stocks rose today on expectations that Greece will avoid defaulting on its debt. Greek Prime Minister George Papandreou’s drive to stave off the euro area’s first sovereign default stayed on track after lawmakers backed a bill to authorize an austerity plan required to keep rescue aid flowing.

Germany’s biggest banks agreed on a proposal to “roll over” Greek debt holdings, Finance Minister Wolfgang Schaeuble said. That means reinvesting money from maturing bonds into new Greek bonds. German banks have agreed to roll over at least the Greek bonds they’re holding that mature through 2014, which amount to about 2 billion euros ($2.9 billion), Schaeuble said.

“The big driver behind the rally has been Greece,” said Peter Jankovskis, who helps manage about $2.7 billion at Oakbrook Investments in Lisle, Illinois. “The implementation of an austerity plan is certainly an important step. That should be less of an overhang for the market in July.”

Stocks extended gains after the Institute for Supply Management-Chicago Inc. said its business barometer climbed to 61.1 this month from 56.6 in May. Economists called for the index to drop to 54, according to the median forecast in a Bloomberg News survey. Figures greater than 50 signal expansion. Consumer confidence rose to the highest level in 10 weeks, the Bloomberg Consumer Comfort Index showed.

The Morgan Stanley Cyclical Index gained 1.5 percent as 29 of its 30 stocks rallied. The Dow Jones Transportation Average of 20 stocks, which is considered a proxy for economic growth, advanced 1.3 percent.

Caterpillar, the world’s largest maker of construction equipment, added 3 percent to $106.46. United Technologies rose 2.4 percent to $88.51. 3M increased 1.9 percent to $94.85.

Hewlett-Packard climbed 2.4 percent to $36.40. The world’s largest maker of personal computers is being urged by private equity firms including Blackstone Group to break up and sell some units to them, Reuters reported, citing people familiar with the matter.

EBay Inc. climbed 4.6 percent to $32.27. The world’s largest online marketplace was raised to “buy” from “neutral” by Bank of America Corp, which cited the Federal Reserve Board’s vote yesterday to approve a less severe cap on debit-card transaction fees than previously proposed.

First Solar Inc. jumped 2.2 percent to $132.27. The world’s largest maker of thin-film solar modules won $4.5 billion in conditional loan guarantees from the U.S. Energy Department for three projects it’s developing in California.

The S&P 500 today surpassed its average price of the last 50 days of about 1,317, which shows potential for further gains, according to analysts who study charts to make forecasts.

“It just confirms the strength of the rally that we’ve seen here,” said Richard Ross, global technical strategist at Auerbach Grayson & Co. in New York. “If it doesn’t provide any resistance at all and the market continues to power through that level, that would be a bullish signal for the market.”

The benchmark gauge has made a high on the last day of a week only once since peaking in April, and tomorrow may determine whether the market can build on its current rally, Strategas Research Partners said.

The S&P 500 had its weekly intraday high on a Friday only once over the past eight weeks, as the gauge sank 7 percent, according to data from Strategas and Bloomberg. That marked a shift in trend from the first four months of the year, when the S&P 500 rallied 8.4 percent and Fridays accounted for 10 of the 17 weekly highs.

“We need to see this trend re-emerge,” Christopher Verrone, head of technical analysis at the New York-based firm, wrote in a note yesterday. “The bulls have had trouble sustaining strength late in the week.”

The Institute for Supply Management is scheduled to release tomorrow the factory index, which may show a decrease to 51.8 this month from 53.5 in May, according to the median forecast from economists surveyed by Bloomberg. Worse-than-expected economic reports and concern about the debt crisis in Europe spurred losses for the S&P in six consecutive weeks from April 29 to June 10, the longest streak since July 2008. The index has since climbed 2.9 percent through yesterday.

“If this is going to be more than an ‘oversold bounce,’ it will be important for this trend to improve over coming weeks,” Verrone said.

Have a wonderful long weekend everyone.

 Be magnificent!

It is necessary that this be the aim of our entire life.

In all of our thoughts and actions,

we must be conscious of the infinite.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

There are more things to alarm us

than to harm us, and we suffer more

often in apprehension than reality.

-Seneca, 3 BC- 65 AD

 

 

Dear Friends,

 Tangents: I attended an event this afternoon to celebrate the life of a client of mine who passed away recently. One of her relatives wrote a poem on May 9^th, 1903, and the hand written poem was in a frame on a table with some old photos.  I think it is lovely:

The friends who leave us do not feel the sorrow of parting,

as we feel it who must stay

lamenting day by day and knowing,

when we wake upon the morrow,

we shall not find in its accustomed place

the one beloved face.

For Christians, today is the feast day of St. Peter and St. Paul.

Photos of the day 

June 29, 2011

Pope Benedict XVI leads a solemn mass to celebrate the feast of Saints Peter and Paul in Saint Peter’s Basilica at the Vatican. Tony Gentile/Reuters

A child with mud on his face smiles after celebrating Asar Pandhra festival in Bhaktapur. Farmers in Nepal celebrate the festival to mark the commencement of rice crop planting in paddy fields. Navesh Chitrakar/Reuters

Market Commentary:

 

Canada

By Matt Walcoff

June 29 (Bloomberg) — Canadian stocks rose for a third day, led by raw-materials producers, as copper climbed after Greece’s parliament passed an austerity package and Canpotex Ltd. reached a potash-supply deal with Sinofert Holdings Ltd.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 2.5 percent. Potash Corp. of Saskatchewan Inc. advanced 2.1 percent after Canpotex, which represents North American potash sellers overseas, agreed to a deal that boosts prices. Rubicon Minerals Corp. slid 24 percent after releasing a preliminary economic assessment of its Phoenix Gold Project in Ontario.

The Standard & Poor’s/TSX Composite Index rose 83.96 points, or 0.6 percent, to 13,188.94.

“The risk-on trade is coming back,” said Greg Taylor, a money manager at Aurion Capital Management in Toronto, which oversees about C$5 billion ($5.2 billion). “The fear of the Greek vote not passing is behind us.” The S&P/TSX dropped 7.2 percent this quarter through yesterday, which would be the biggest quarterly loss since 2008.

World equities have declined on concern Greece won’t be able to pay its debts. S&P/TSX energy companies slumped 11 percent as crude oil sank 13 percent. The energy industry makes up 27 percent of Canadian stocks by market value, according to Bloomberg data.

The Greek Parliament approved a 78-billion-euro ($112 billion) package of budget cuts and asset sales today amid violent protests in Athens.

A U.S. index of pending home sales increased 8 percent in May from April, signaling the residential real estate market in Canada’s main trading partner may be rebounding. Economists had forecast a 3 percent increase, according to the median estimate in a Bloomberg News survey.

The U.S. dollar dropped against 15 of 16 other major currencies. The Canadian dollar rallied 1.1 percent after the country reported that inflation jumped to an eight-year high last month.

Gold advanced 0.7 percent and silver 3.3 percent in New York. Barrick Gold Corp., the world’s largest producer of the metal, increased 1.5 percent to C$43.80. Kinross Gold Corp., Canada’s third-biggest company in the industry, climbed 0.9 percent to C$15.03. Iamgold Corp., which mines in West Africa, South America and Quebec, rallied 3 percent to C$18.38.

Rubicon Minerals sank 24 percent, the most in 10 years, to C$3.56. The company forecast mining costs higher than Bank of Montreal had forecast, Andrew Kaip, an analyst at BMO, wrote in a note to clients.

Potash Corp. gained for a fifth day after Canpotex said its agreement with Sinofert, a Hong Kong-based fertilizer manufacturer, for the second half of the year boosts potash prices by $70 a metric ton. Also today, analysts at UBS AG named Potash Corp. one of nine “most-preferred” chemicals stocks, citing its “balanced exposure to potash, phosphate and nitrogen fertilizers.”

Shares of the Saskatoon, Saskatchewan-based company rose 2.1 percent to C$55.13.

Base-metals producers advanced as copper rallied the most in a month. Teck increased 2.5 percent to C$48.55. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, climbed 5.6 percent to C$24.52. Capstone Mining Corp., a copper producer with operations in Yukon and Mexico, jumped 16 percent to C$3.44 for its first gain in six days. Mercator Minerals Ltd., which mines copper and molybdenum, surged 9.8 percent to C$2.70.

Fifty of 67 S&P/TSX energy companies gained today as crude futures advanced after the U.S. reported a bigger drop in inventories than all 12 analysts in a Bloomberg survey had forecast.                       

Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, rose 1.4 percent to C$39.99. Cenovus Energy Inc., the country’s fifth-biggest energy company, increased 2.4 percent to C$35.44. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, climbed 3 percent to C$27.76.

TMX Group Ltd., the owner of the Toronto Stock Exchange, rallied 1.5 percent to C$44.20 after London Stock Exchange Group Plc withdrew its C$3.29 billion bid for the company. In a statement, the companies said they were unlikely to obtain enough shareholder votes for approval at a meeting scheduled for tomorrow.

Maple Group Acquisition Corp., which has offered C$3.73 billion in cash and shares for TMX, said it will continue to pursue regulatory approvals for its bid.

Directory publisher Yellow Media Inc. gained for the first time in seven days, rising a record 18 percent to C$2.69. The shares had plunged 52 percent to a record low from May 17, the day San Francisco banned the unsolicited distribution of phone books, to yesterday.

Exfo Inc., which makes equipment for the telecommunications industry, tumbled 17 percent to C$7.22 after forecasting fourth- quarter profit below analysts’ estimates. Shares of the Quebec City-based company have fallen 44 percent from a post-2002 high on March 8.

US

By Rita Nazareth and Cecile Vannucci

June 29 (Bloomberg) — U.S. stocks rose, giving benchmark indexes the biggest three-day gain since March, as Greece passed austerity measures and the Federal Reserve moved to set a less- severe limit on debit-card swipe fees than previously proposed.

Visa Inc. and MasterCard Inc., the biggest consumer-payment networks, jumped more than 11 percent, as the Fed moved to cap debit-card transaction fees at 21 cents. Bank of America Corp. advanced 3 percent after agreeing to pay $8.5 billion to resolve claims over soured mortgages. Monsanto Co., the largest seed company, climbed 5 percent after net income jumped 77 percent. U.S. Steel Corp. paced a rally in steelmakers, rising 5.9 percent, as Deutsche Bank AG predicted demand rebound.

The Standard & Poor’s 500 Index rose 0.8 percent to 1,307.41 at 4 p.m. in New York, adding 3.1 percent in three days. The Dow Jones Industrial Average added 72.73 points, or 0.6 percent, to 12,261.42 today.

“Greece is kicking the can down the road,” said Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “That’s certainly an important first step. On top of that, the economy has a number of catalysts that could help push the market higher over the next few weeks. We’ve came down a lot on price. It seems a bit overdone.”

The S&P 500 has fallen 2.8 percent in June, and headed for the second straight monthly loss, amid concern about the European debt crisis and weaker-than-expected economic data. The index is still up 4 percent in 2011 on government stimulus measures and better-than-estimated profits.

Global stocks rose for a third day, the longest advance in a month, as Greek Prime Minister George Papandreou clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off default for his debt-laden nation. Papandreou is now on track to secure a bill setting out the strategy for a 78 billion-euro($112 billion) package of budget cuts and asset sales that is the condition for further rescue funds.

“It relieves a certain amount of uncertainty related to outsized risks that would come with a default,” said Kevin Caron, market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., which has $115 billion in client assets. In addition, “it was good to see that home sales rose more than expected. That was a positive sign.”                         

More Americans than forecast signed contracts in May to buy previously owned homes. The index of pending home resales increased 8.2 percent from April after a revised 11 percent drop the prior month that was smaller than initially reported, the National Association of Realtors said. Economists forecast a 3 percent increase, according to the median estimate in a Bloomberg News survey.

Financial shares had the biggest gain in the S&P 500 within 10 industries, rising 2.1 percent. Visa soared 15 percent, the most since March 2008, to $86.57. MasterCard surged 11 percent to $309.70, the highest since June 2008.

“This is a big win for Visa and MasterCard,” said Giri Cherukuri, lead trader and portfolio manager for Lisle, Illinois-based Oakbrook Investments, which manages about $2.7 billion. “They’ve been arguing for a long time that these regulations are too onerous. Definitely good news for them.”

Bank of America added 3 percent to $11.14. The stock rose even after the bank said its settlement will contribute to a second-quarter loss of $8.6 billion to $9.1 billion, or 88 cents to 93 cents a share.                       

Citigroup Inc. advanced 3.4 percent to $41.50. Bank of America raised the stock to “buy” from “neutral,” saying potential earnings should lift the shares.

Gauges of raw material and energy shares in the S&P 500 gained at least 1.1 percent. The S&P GSCI Index of 24 commodities advanced 2.1 percent as oil and metals rallied.

Monsanto climbed 5 percent to $70.26. The world’s largest seed company reported fiscal third-quarter earnings that topped analysts’ estimates and raised its full-year profit forecast on higher sales of Roundup weed killer and genetically modified crop seeds. Profit excluding some items will rise to $2.84 to $2.88 a share in the fiscal year through August. Its previous forecast was for $2.72 to $2.82.

U.S. Steel rallied 5.9 percent, the biggest increase since July 2010, to $45.85. Deutsche Bank AG said demand and prices for the metal will rise. Steel producers in the U.S. will benefit as Chinese inventories empty and industrial activity picks up in the second half of 2011, analysts including David Martin and Jorge Beristain wrote in a research note yesterday.

Deutsche Bank raised its ratings on Pittsburgh-based U.S. Steel and AK Steel Holding Corp., the third-largest U.S. steelmaker, to “buy” from “hold.”

BJ’s Wholesale Club Inc. climbed 4.6 percent to $50.29 as Leonard Green & Partners LP and CVC Capital Partners agreed to buy the warehouse-club chain for $2.8 billion. Its investors will receive $51.25 a share in cash for each common stock they hold, the companies said. That’s 6.6 percent more than the closing price yesterday.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, tumbled 9.9 percent, the most since March, to 17.27.

A gauge of homebuilders in S&P indexes slumped 2.3 percent.

KB Home tumbled 15 percent, the most since September 2008, to $10.08. The Los Angeles-based homebuilder that targets first- time buyers reported a wider second-quarter loss as new orders and revenue decreased amid weak demand for new houses.

PulteGroup Inc. declined 3.9 percent to $7.58. D.R. Horton Inc. fell 3.2 percent to $11.37.

Have a wonderful evening everyone.

Be magnificent!

  

Meditation is movement without any motive, without words, and the activity of thought.

It must be something that is not deliberately set about.

Only then is it a movement within the infinite, measureless to man, without a goal, without an end,

without a beginning.  And that has a strange action in daily life, because all life is one,

and then becomes sacred.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 It’s not that I’m so smart, it’s just that

I stay with problems longer.

     -Albert Einstein, 1879-1955

 

Dear Friends,

Tangents: Birthday: Peter Paul Rubens, June 28^th, 1577

Peter Paul Rubens, The Elevation of the Cross, oil on canvas, 1610-1611 (Cathedral of Our Lady, Antwerp)

Rubens was an enormously successful artist in the first half of the 1600s. His paintings were sought after by important patrons all over Europe. A shrewd businessman, Rubens was of course, also a devout Catholic. He is also a perfect example of the changed status of the artist: his friends and confidants were scholars, aristocrats, and even the Royal Families of Europe (Rubens was so trustworthy and clever that he served as a diplomat).
Rubens spent several years in Italy early in his career studying Italian Renaissance art, as well as the art of classical antiquity. He combined this with the influence of Caravaggio, the Venetian artists of the Renaissance, the Baroque, and the tradition of his native Flanders (think Campin and Van Eyck). Rubens was so successful that he set up a large studio in his native Antwerp (which you can still visit). There, he churned out large numbers of paintings for his royal and wealthy clients, and charged for the paintings according to how much he had personally painted. He was always responsible for the idea of a painting, but if his assistants executed most of it, the work was less expensive. In his studio Rubens had assistants working for him who specialized in different things, so they could all work on different parts of a single painting.  From: SmartHistory.

Photo of the day

June 28, 2011

The father of seven-month-old Nopparat teaches him to ‘wai,’ a traditional Thai greeting with the palms pressed together in a prayer-like fashion, to neighbors as they pass outside their residence in Bangkok’s Khlong Toei district, Thailand. Adres Latif/ Reuters.

Market Commentary:

 Canada

By Nikolaj Gammeltoft

June 28 (Bloomberg) — Canadian stocks rose for a second day as energy producers and bank shares gained amid optimism that a deal can be reached to help Greece avoid defaulting on its debt.

Suncor Energy Inc., Canada’s largest oil and gas producer, advanced 1.5 percent as oil futures jumped. Royal Bank of Canada, the country’s biggest bank, and Toronto-Dominion Bank increased at least 0.8 percent as financial stocks rallied. Westport Innovations Inc. soared 11 percent after General Motors Co. agreed to work on projects with the developer of natural-gas engine technologies.

The Standard & Poor’s/TSX Composite Index rose 138.49 points, or 1.1 percent, to 13,104.98 at 4 p.m. in Toronto.

“Everyone’s thinking of Greece and there’s a little bit of optimism today as we wait for the vote tomorrow,” said Irwin Michael, who helps manage C$1 billion ($1 billion) as a money manager at ABC Group of Funds in Toronto. “Greece has to be repaired and put on the right track because you got other problematic countries that are being watched very closely.”

The S&P/TSX broke a three-week losing streak last week as investors speculated Greece will be able to enact austerity measures and avoid default. Greek lawmakers are in the midst of a debate this week to approve an austerity package needed for the release of the next phase of an international bailout.

Germany’s biggest banks and insurers will meet with the Finance Ministry in Berlin tomorrow as they seek to reach an agreement on their contribution to a Greek aid package, two people with knowledge of the matter said. A preliminary deal may be reached as early as tomorrow, they said. Greek Prime Minister George Papandreou’s 78 billion euro ($111 billion) plan to cut spending and sell assets is set for a vote in parliament tomorrow.                      

S&P/TSX energy stocks rallied 1.6 percent, the second-most among ten groups in the benchmark index for Canadian equities. Suncor advanced 1.5 percent to C$37.52. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, increased 3 percent to C$39.44. Industrial companies rose the most S&P/TSX Composite Index.

Oil rose from a four-month low amid speculation that Greek lawmakers will approve austerity measures to prevent a default on the country’s debt and on forecasts U.S. fuel demand will rise before the Fourth of July holiday. The U.S. Independence Day weekend typically marks the peak consumption period for U.S. motorists.

The S&P/TSX Financials Index, the largest part of the S&P/TSX Composite, gained 0.5 percent. Royal Bank of Canada rose 1.1 percent to C$54.49. Toronto-Dominion Bank, Canada’s second- largest lender by assets, increased 0.8 percent to C$80.26.

Westport Innovations surged 11 percent to C$23.55 after agreeing with GM to develop natural gas controls, emissions and performance strategies. Westport will also open a new technical center in Michigan.

Stocks rose in Canada even after a report that confidence among U.S. consumers dropped to a seven-month low in June as Americans grew concerned about the outlook for jobs and wages.

The Conference Board’s sentiment index decreased to 58.5 from a revised 61.7 in May. Home prices fell in the year ended in April by the most in 17 months, another report showed.

“Everyone is betting on Europe finding a resolution for the Greece,” said Ken Mack, an analyst and trader at Stone Asset Management in Toronto, which oversees about C$850 million.

“The U.S. put out a consumer confidence number that was lower than expected and the market shrugged it off. It’s very day to day, the optimism comes and goes and today it’s up.”

US

By Rita Nazareth and Cecile Vannucci

June 28 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to its highest level in three weeks, amid optimism European nations will take action to prevent a Greek default and after Nike Inc.’s earnings beat estimates.

Nike rallied 10 percent as higher North American sales helped the world’s largest sporting-goods company top profit projections. Caterpillar Inc., Exxon Mobil Corp. and Alcoa Inc. added at least 2.1 percent, pacing gains in companies most-tied to economic growth. Home Depot Inc. climbed 2.4 percent after the largest U.S. home-improvement retailer said that it is targeting about $3.5 billion in share repurchases for 2011.

The S&P 500 advanced 1.3 percent to 1,296.67 at 4 p.m. in New York, rising to the highest closing level since June 3. The Dow Jones Industrial Average increased 145.13 points, or 1.2 percent, to 12,188.69 today. More than 6.1 billion shares changed hands on U.S. exchanges at 5:12 p.m., 14 percent less than the three-month average through yesterday.

“The rally is a continuation of the global growth story,” said Sean Kraus, who oversees about $2.2 billion as chief investment officer at Citizens Business Bank in Pasadena, California. “There’s relief around Greece. As a global company, people looked at Nike to say, ‘hey, how was the global economy really doing on the consumer side?’ Because Nike actually had a very good quarter, that was a surprise to the market.”

Energy, consumer discretionary and raw material companies posted the biggest gains today among 10 industries in the S&P 500, rising at least 1.7 percent. Since the index bottomed on March 16, defensive industries such as health-care, telecommunications and utilities have risen the most as investors sought havens on speculation growth is slowing.

Global stocks rallied today as two people with knowledge of the matter told Bloomberg News that Germany’s biggest banks and insurers will meet with the Finance Ministry in Berlin tomorrow as they seek to reach an agreement on their contribution to a Greek aid package.

German and French lenders are the biggest European holders of Greek debt and their participation in the plan is key to the European Union goal of getting banks to roll over at least 30 billion euros ($43 billion) of bonds. The debt swap is part of a broader aid package European Union leaders have pledged to pass next month to prevent the euro-region’s first default a year after the Greek bailout that failed to stop the debt crisis.

 “The Germans and the French are the key players,” said Mike Shea, a managing partner and trader at Direct Access Partners LLC in New York. “The market is looking for some kind of clarity. Nobody expects a permanent solution right now, but if the German banks are on board with the French plan it indicates that we are closer to some kind of resolution.”

Nike jumped 10 percent to $89.90. Chief Executive Officer Mark Parker has boosted sales and reduced marketing costs from a year earlier, when Nike promoted around the World Cup, to fight rising costs for cotton, labor and transportation that have reduced profitability in the apparel industry this year.

“Nike had strong earnings,” said Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which oversees $3.8 billion. “We’re coming into earnings season, which is going to be good. What is going to drive the stock market is going to be earnings. U.S. companies are doing very well.”

Alcoa is the first Dow average company to report second- quarter earnings on July 11. Earnings at S&P 500 companies rose 13 percent in the three-month period ending June 30, according to a Bloomberg survey with analysts. Net income will rise 20 percent in 2011, the data showed.               

The Morgan Stanley Cyclical Index rose 1.5 percent as 29 of its 30 stocks rallied. The Dow Jones Transportation Average of 20 stocks, a proxy for economic growth, added 1.4 percent. The S&P GSCI Index of 24 commodities advanced 2.2 percent as crude oil rebounded from a four-month low and metals rallied.

Caterpillar, the world’s largest maker of construction equipment, gained 3 percent to $103.84. Exxon Mobil increased 2.2 percent to $79.63. Alcoa advanced 2.4 percent to $15.65.

Home Depot climbed 2.4 percent, the third-biggest gain in the Dow, to $36.06. The home-improvement retailer closed at the highest level since May 31.

Accenture Plc rose 3.2 percent to $59.65. The world’s second-largest technology-consulting firm will replace Marshall & Ilsley Corp. in the S&P 500 after the close of trading on July 5, S&P said. The change is being made because Bank of Montreal is acquiring Marshall & Ilsley in a deal expected to be completed around that date.                     

 LinkedIn Corp. soared 12 percent to $85.56. JPMorgan Chase & Co. predicted that the shares would climb to $85 in the next 18 months, giving them an “overweight” rating, while Bank of America Corp. has a “buy” recommendation and an estimate of $92. UBS AG, which also assigned a “buy” rating, expects the stock to increase to $90. Morgan Stanley projected $88, with an “overweight” rating.

Pfizer Inc. rose 1.9 percent to $20.55. The world’s biggest drugmaker said the U.S. Food and Drug Administration accepted the company’s filing for review of axitinib for patients with advanced kidney cancer.

The S&P 500 may extend its gains from a three-month low to as much as 4.1 percent after a trend measure sent out its first buy signal since April, according to Piper Jaffray Cos.

The Moving Average Convergence/Divergence line, calculated by subtracting the S&P 500’s average level during the past 26 days from the average over the past 12 days, crossed last week above the “signal line” that plots the 9-day average difference between the two. That suggests the gain is likely to continue and help drive the S&P 500 to its 50-day moving average, or 1,317, said Craig W. Johnson, a technical market strategist with Piper Jaffray in Minneapolis.

“People know the summer doldrums probably won’t carry through into the fall,” he said in an interview. “They’re trying to use pullbacks toward the 200-day average as the opportunity buying stocks.”

 Have a wonderful evening everyone.

Be magnificent!

Man cannot be broken down into emotions, intellect, or action.

Man is a whole.

When these three elements of intellect, feelings, and action are in harmony, they make up man.

 -Swami Prajnanpad, 1891-1974

 

As ever,

 Carolann

 Fortunately Nature, kind and patient as she is,

has never put the dire question as to the meaning

of their lives into the mouths of most people. 

And where nobody asks, nobody needs to answer.

                         -Carl Gustav Jung, 1875-1961 

 

 

Dear Friends,

 Tangents:  Birthday: Helen Keller, June 27, 1880

 Words of Wisdom from Helen Keller:

One can never consent to creep when one feels the impulse to soar.

 The world is full of suffering, but it is also full of people overcoming it.

 Many persons have a wrong idea of what constitutes true happiness.  It is not attained through self-gratification but through fidelity to a worthy purpose.

 We could never learn to be brave and patient, if there were only joy in the world.

 When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us.

 The best and most beautiful things in the world cannot be seen or even touched.  They must be felt within the heart.

Photos of the day 

June 27, 2011

Monica Ocampo of Mexico scores a goal against England during their Women’s World Cup Group B soccer match in Wolfsburg, Germany. Ina Fassbender/Reuters

Members of the Vienna State Opera Ballet (Wiener Staatsopernballett) perform on stage during a dress rehearsal of Nureyev Gala at the State Opera in Vienna, Austria. The Ballet will premiere on June 28, 2011. Lisi Niesner/Reuters

Market Commentary:

Canada

By Inyoung Hwang and Victoria Stilwell

June 27 (Bloomberg) — Canadian stocks swung between gains and losses after three days of declines, as bank shares gained after global regulators issued new capital rules and energy producers fell.

Toronto-Dominion Bank and Bank of Nova Scotia jumped at least 0.3 percent as financial companies advanced. Teck Resources Ltd. declined 0.9 percent as price of copper fell on concern Greece’s debt crisis will curb demand for industrial metals. Suncor Energy Inc. dropped 0.8 percent as oil sank after the International Energy Agency said it’s prepared to release additional crude from stockpiles.

The Standard & Poor’s/TSX Composite Index lost 7.58 points, or 0.1 percent, to 12,901.31 at 11:41 a.m. in Toronto after rising as much as 0.2 percent.

“This week is going to be a fairly volatile week — our eyes continue to be on the European issues that are going on with Greece,” said Youssef Zohny, a money manager at Van Arbor Asset Management Ltd. in Vancouver, which oversees about C$50 million ($51 million). The new capital rules “are seen more positive for Canadian-U.S. banks, so that’s giving a little bit of strength to the Canadian financial sector.”

The S&P/TSX broke a three-week losing streak last week as investors speculated Greece will be able to enact austerity measures and avoid default. Greek lawmakers are starting a three-day debate to approve an austerity package needed for the release of the next phase of an international bailout.

An index of financial stocks in the S&P/TSX rose 0.2 percent. Banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement Saturday. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.

Toronto-Dominion Bank, the country’s second-largest lender by assets, gained 0.3 percent to C$78.95. Bank of Nova Scotia climbed 0.5 percent to C$57.36.

 “Now we have clarity on the amount of capital needed for those financial institutions,” said Bob Decker, a money manager at Aurion Capital Management in Toronto, which oversees C$5.5 billion ($5.6 billion). “Just to know what the number is has created some confidence. There’s basically a wait-and-see attitude to find what the solution is going to be on these Grecian debts.”

Potash Corp of Saskatchewan Inc. increased 1.9 percent to C$52.88 as Horst Hueniken at Stifel Nicolaus & Co. said fertilizer stocks may continue to gain. Potash, the largest fertilizer producer by market value, has advanced 2.7 percent this year.

Investment in agriculture must rise by $90 billion a year to meet the world’s growing food needs, according to a study sponsored by businesses including Monsanto Co., DuPont Co., Archer Daniels Midland Co. and Deere & Co.

 The “investment gap” requires more private-sector involvement in agricultural and rural development, according to a report issued today by the Global Harvest Initiative, a collaboration between companies and nonprofits such as the World Wildlife Fund.

Teck, Canada’s largest base-metals and coal producer, lost 0.9 percent to C$45.54.

Energy stocks slumped 0.6 percent, the second-biggest decline in the S&P/TSX. Suncor lost 0.8 percent to C$36.70. Talisman Energy Inc. fell 1.3 percent to C$18.32. The IEA said June 23 its member states including the U.S. and Germany would release oil stockpiles for the third time in the agency’s history. The agency will act again if needed, Executive Director Nobuo Tanaka said June 25.

Yellow Media Inc. declined 18 percent, the most in the S&P/TSX. The directory publisher was cut to “underperform” from “neutral” at Credit Suisse Group AG, which cited a potential dividend cut and an accelerating decline in print business.

US

By Rita Nazareth and Cecile Vannucci

June 27 (Bloomberg) — U.S. stocks advanced, breaking a three-day losing streak for the Standard & Poor’s 500 Index, as regulators issued capital rules to safeguard the global financial system and technology companies rallied.

Bank of America Corp., U.S. Bancorp, Huntington Bancshares Inc. rose at least 2.7 percent as lenders climbed. Microsoft Corp. jumped 3.7 percent, helping to lead a gauge of technology shares in the S&P 500 to the biggest gain within 10 groups.

Amazon.com Inc. added 4.5 percent after Morgan Stanley added the world’s largest online retailer to its “Best Ideas” list.

The S&P 500 gained 0.9 percent to 1,280.10 at 4 p.m. in New York. The benchmark index for American equities had fallen 2.1 percent over the last three days. The Dow Jones Industrial Average rose 108.98 points, or 0.9 percent, to 12,043.56 today.

More than 6 billion shares changed hands on U.S. exchanges at 4:32 p.m., about 4.8 percent more than a week ago.

The requirements for banks “are less onerous than had been feared,” said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana.

“Sooner they’ll be able to return capital to shareholders through dividends and buybacks.”

The S&P 500 had retreated 7 percent from this year’s high at the end of April through June 24 amid concern about Europe’s debt crisis. Financial institutions in the measure slumped 9.9 percent, the second-biggest decline among 10 groups.                    

 Stocks rose today as global regulators said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement on June 25. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.

“The banks are going to have a greater chance of success reaching those capital thresholds,” said Keith Wirtz, Cincinnati-based chief investment officer for Fifth Third, which oversees $17.4 billion. “They’re going to allow the banks to earn their way into a better balance sheet condition.”

Equity index futures pared gains before the market opened after consumer spending unexpectedly stagnated as employment prospects dimmed and rising inflation caused Americans to cut back, a Commerce Department report showed in Washington today.

Purchases rose 0.3 percent in May, the same as in the prior month. Economists had forecast a gain of 0.1 percent, according to the median of 63 estimates compiled by Bloomberg.

“I don’t think these little squiggles on the domestic economy are going to make that much difference,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees more than $9 billion. “The focus will continue to be on two things: sovereign debt and Greece. Until this is resolved, I don’t think anybody can feel comfortable anywhere, including the United States.”

Greek lawmakers will vote on a five-year austerity plan this week that must pass before the European Union and the International Monetary Fund will agree to provide further aid.

Failure to pass the plan may lead to the euro area’s first sovereign default as Greece needs to cover 6.6 billion euros ($9.4 billion) of maturing bonds in August.

The first session of the three-day debate began in Athens today. The lawmakers will probably vote on June 29. They also need to pass an implementation law, which provides the details of how the five-year plan will be applied, before June 30.                         

The KBW Bank Index gained 1.4 percent as 20 of its 24 stocks advanced. U.S. Bancorp added 2.7 percent to $24.57.

Huntington Bancshares rallied 3.6 percent to $6.32.

Bank of America rose 3.1 percent to $10.85. The biggest U.S. lender was “massively undervalued” as the stock traded for less than the cash on its balance sheet is worth, said Richard Bove, an analyst with Rochdale Securities LLC.

“Under the bleakest of scenarios Bank of America’s book value will rise in the next three years,” Bove, who is based in Lutz, Florida, wrote today in a note to clients. “At some point the market will adjust to the company’s real values.”

Technology shares in the S&P 500 rose 1.4 percent, the biggest gain within 10 groups.

Microsoft climbed 3.7 percent to $25.20 before a presentation tomorrow by Chief Executive Officer Steve Ballmer, who is expected to introduce Microsoft’s next-generation cloud service for its Office software. Apple Inc. rose 1.7 percent to $332.04 after Morgan Stanley said the company’s order reductions will ease and production of iPhones and iPads will begin “ramping aggressively” from August through year-end.

Spending on information technology by companies and governments in the U.S. will grow 5.6 percent in 2011, according to a survey by International Data Corp., about double the estimated increase for gross domestic product. Of the executives surveyed by the research firm, 31 percent said spending on security initiatives was a top initiative this year, while 19 percent chose business analytics.

Amazon gained 4.5 percent to $201.25. Morgan Stanley raised its share-price estimate for the company to $245, citing potential for operating margin expansion.

Stanley Black & Decker Inc. added 0.3 percent to $69.50 after agreeing to buy Niscayah AB for 7.6 billion kronor ($1.2 billion), outbidding rival Securitas AB to secure expansion in the market for electronic security systems. Investors will receive 18 kronor a share in cash under the terms of the offer, New Britain, Connecticut-based Stanley said. The price is 47 percent higher than the Niscayah’s closing price prior to the $910 million bid from Securitas. 

Have a wonderful evening everyone.

Be magnificent!

 

 Meditation is one of the greatest arts in life, perhaps the greatest,

and one cannot possibly learn it from anybody else,

that is the beauty of it.

It has no technique and therefore no authority.

When you learn about yourself, watch yourself, watch the way you walk,

how you eat, what you say, the gossip, the hate, the jealousy –

if you are aware of all that in yourself, without any choice,

that is part of meditation.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 The nearest way to glory…

is to strive to be what you

wish to be thought to be

    -Socrates, c. 470-399 BC

Dear Friends,

 Tangents:  I read this article recently and thought it interesting; hope you do too.

 The King’s Visit

   by Peter Grier

During his state visit to Britain May 24-26, President Obama gave Queen Elizabeth II a leather-bound album of mementos from her parents’ trip to the United States in 1939. The queen seemed to like it, and even stuffy British commentators thought the gesture classy. But little news coverage noted that the 1939 royal tour of America—which occurred 72 years ago this week—was a triumph of public relations and one of the most important diplomatic events in the history of US-British relations. If it were made into a movie, “The King’s Visit” could be just as dramatic and moving as “The King’s Speech.”

It would be the same king in both films, of course – King George VI.   The darkening atmosphere would be the same, as the night of World War II was drawing across Europe. But the pivotal character would be Franklin D. Roosevelt instead of speech therapist Lionel Logue.  The prime obstacle to be overcome would be, not a stammer, but Americans’ historical memory of the redcoats.

No reigning British monarch had ever set foot on US soil until King George and his wife, Queen Elizabeth, crossed the border from Canada on June 7, 1939. Many US voters were isolationist and wanted no part of a European war. FDR thought the sight of a real king might change their minds. “I think it would be an excellent thing for Anglo-American relations,” he said in his breezy invitation to “My dear King George.”

The canny FDR was right. Crowds lined D.C. streets for a glimpse of the modest king. Newsreels noted that the last time the British had marched through the streets of Washington, they burned the White House.  This time, they burned only a few hot dogs, the dish President Roosevelt famously served the royal couple during their visit to his home in Hyde Park, N.Y.

Three months later, Britain and Germany were at war. Americans sympathized with Britain’s plight, due in no small part to the royal visit, according to the FDR library’s history of the visit. “Britons were no longer strangers or the evil colonial rulers from the past but familiar friends and relatives with whom Americans could identify,” concludes the history.

First Lady Michelle Obama addressing graduates of Spelman College earlier this month:

That is the story of Spelman College: that unyielding presumption of promise, that presumption of brilliance, that presumption that every woman who enrolls at this school has something infinitely valuable to offer this world….That legacy is now your inheritance.  And I’ve chosen that word – inheritance – very carefully, because it’s not an entitlement  that you can take for granted.  It’s not a gift with which you can do whatever you please.  It is a commitment that comes with a certain set of obligations, obligations that don’t end when you march through that arch today….

I want you to think about women like [Spelman graduates] Marian Wright Edelman and Janet Bragg….Instead of focusing on  what they didn’t have, they focused on what they did have: their intellect, their courage, their determination, their passion.  And with few advantages and long odds, with doors closed to them and laws stacked against them, still they achieved, still they triumphed, still they carved a glorious path for themselves in this world.  And graduates, every single one of you has an obligation to do the same.

Photos of the day 

June 24, 2011

President Barack Obama signs a robot after speaking at Carnegie Mellon University in Pittsburgh.

Carolyn Kaster/AP

A visitor looks at a LEAP turbine during the 49th Paris Air Show at the Le Bourget airport near Paris. LEAP is next-generation engine family for single-aisle jets selected by Airbus to power A320neo. Gonzalo Fuentes/Reuters

Market Commentary:

Canada

By Matt Walcoff

June 24 (Bloomberg) — Canadian stocks fell for a third day, led by energy companies, as gold futures dropped to a five- week low and crude oil failed to rebound from yesterday’s 4.6 percent plunge.

Goldcorp Inc., the world’s second-biggest gold producer by market value, fell 2.8 percent as concern Greece’s debt crisis will spread to other European countries boosted the U.S. dollar.

Nexen Inc., an oil and gas producer with operations on five continents, lost 2 percent a day after the International Energy Agency said it will release of 60 million barrels of crude.

 The Standard & Poor’s/TSX Composite Index slipped 70.69 points, or 0.5 percent, to 12,908.89 at 4 p.m. in Toronto. It gained 0.9 percent this week.

“Two things are going on: The risk trade is starting to come off a bit — when that happens there’s a movement toward safer currencies such as the U.S. dollar — and then the worry that Greece is going to default,” said Tony Demarin, chief investment officer at BCV Asset Management in Winnipeg, Manitoba, which oversees C$300 million ($305 million).

The S&P/TSX broke a three-week losing streak as investors speculated Greece will be able to enact austerity measures and avoid default. European leaders meeting in Brussels today attempted to stanch the crisis, vowing to stave off a Greek default as long as Prime Minister George Papandreou pushes through a package of budget cuts next week.

Base-metals producers climbed this week, while gold companies rebounded from a two-year low relative to prices of the metal. Gold and silver retreated today as the U.S. dollar gained for a third day against a basket of world currencies. The cost to insure against a sovereign-debt default in Europe rose to a record as Moody’s Investors Service said it may cut its ratings on 13 Italian banks.

Goldcorp fell 2.8 percent to C$46.24. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, dropped 3.4 percent to C$31.34. Iamgold Corp., which mines in West Africa, South America and Quebec, lost 4.4 percent to C$17.73, a five-month low.

Crude oil futures have fallen four straight weeks.“The rest of the world seems to believe we need lower oil prices in order for the economy to start growing again,” Demarin said. “Opening up the petroleum reserve is something they don’t do all that often.” Nexen declined 2 percent to C$19.49, extending its three- day drop to 5.6 percent. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, slipped 1.6 percent to C$38.26.

Niko Resources Ltd., which produces energy in South Asia, lost 3.2 percent to C$62.85 after agreeing to plead guilty to a Canadian charge of bribing a Bangladeshi official. The shares closed at the lowest level since May 2009.

Copper futures advanced as much as 2.5 percent in New York after the U.S. reported a bigger increase in durable-goods orders for May than most economists had forecast.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 3.2 percent to C$127.45. Teck Resources Ltd, the country’s biggest base-metals and coal producer, rose 0.9 percent to C$45.95.

BlackBerry maker Research In Motion Ltd. decreased 3.1 percent to C$28.23, trimming its weekly gain to 3.6 percent. Speculation that RIM may be acquired is unwarranted, Kris Thompson, an analyst at National Bank of Canada, said in a note to clients.

 US

By Rita Nazareth and Cecile Vannucci

June 24 (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index lower for a third straight day, as concern about the European debt crisis intensified and Oracle Corp. dragged down technology shares.

Technology companies in the S&P 500 dropped 1.8 percent as a group. Oracle, the largest maker of database software, sank 4.1 percent after reporting lower hardware sales. Micron Technology Inc. tumbled 14 percent as the maker of computer- memory chips reported sales and profit that missed estimates.

Bank of America Corp. and JPMorgan Chase & Co. slumped at least 1.4 percent, following losses in European lenders.

The S&P 500 fell 1.2 percent to 1,268.45 at 4 p.m. in New York, extending its drop in June to 5.7 percent. The Dow Jones Industrial Average declined 115.42 points, or 1 percent, to 11,934.58 today. More than 10.1 billion shares changed hands on U.S. exchanges as of 5 p.m., the highest since March, as investors bought and sold shares to match Russell Investments’ annual changes to its equity indexes. Russell says about $3.9 trillion is benchmarked to its global stock-market measures.

“The market has been in a correction mode for the month of June,” said Timothy Ghriskey, chief investment officer at the Solaris Group LLC in Bedford Hills, New York, which manages $2 billion. “The focus really has been on the European debt crisis, on Greece and on the potential for contagion.”

The S&P 500 has retreated 7 percent from this year’s high at the end of April amid weaker-than-estimated economic data and concern about Europe’s debt crisis. The index is still up 0.9 percent in 2011 on government stimulus measures and better-than- expected earnings.             

 Stocks fell as banks dragged on Europe’s benchmark index after Moody’s Investors Service said it may downgrade 13 Italian lenders because they would be vulnerable to a cut in the government’s credit rating. The euro dropped a third day and bond yields rose in Spain and Italy. Declines in the financial and technology companies overshadowed faster-than-forecast growth in U.S. durable-goods orders and European leaders’ pledge to support Greece if the nation approves austerity measures.

Equity futures rose earlier after the Commerce Department said orders for durable goods, or equipment meant to last at least three years, rose 1.9 percent, beating the median economist forecast of 1.5 percent. Demand for non-military capital equipment also beat expectations after revised April readings showed a smaller decline than previously reported.                     

“We’re getting indications that this is only a temporary soft spot for the economy,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “I do see a better economic picture in the back half of this year.”

A gauge of technology companies in the S&P 500 dropped 1.8 percent as 70 of its 74 stocks retreated. Oracle slumped 4.1 percent to $31.14. Chief Executive Officer Larry Ellison bought Sun Microsystems Inc. last year to capitalize on demand for the servers and databases used in data centers. While the hardware results may reflect Oracle’s effort to pare less-profitable machines from the lineup, they were disappointing enough to overshadow better-than-predicted performance in profit and sales of new software licenses.

Micron Technology tumbled 14 percent to $7.21. The price of dynamic random access memory, or DRAM, for personal computers dropped as supplies increased and demand from makers of consumer laptops and desktop PCs remained sluggish, the Boise, Idaho- based company said. Orders are also slowing for chips used in inexpensive mobile phones, pushing down prices, Micron Chief Executive Officer Steve Appleton said.

The KBW Bank Index of 24 stocks fell 1 percent. Bank of America, the largest U.S. lender by assets, retreated 1.8 percent to $10.52. JPMorgan declined 1.5 percent to $39.49.

The pace of profit growth by U.S. companies will slow as the cost of labor increases and stock investors should be wary of sovereign-debt concerns, according to Citigroup Inc.’s Tobias Levkovich. “The rate of growth is going to diminish meaningfully,” said Levkovich, Citigroup’s New York-based chief U.S. equity strategist, in an interview today on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene. “Margin pressures are driven by labor-cost changes, so as we’re starting to come and bring on some workers back, this is actually starting to chop into margins.”

Levkovich recommended avoiding consumer-discretionary stocks, including retail and media companies, as well as health- care shares as the government considers budget cutbacks. He said investors should be cautious about buying equities until there’s more clarity on the debt situations in Greece and the U.S. 

Have a wonderful weekend everyone.

 Be magnificent!

 The healing of the mind takes place gradually on contact with nature,

with the orange on the branch, the blade of grass eating its way into the cement,

and the hills hidden by the clouds.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

It pays to be obvious, especially if you

Have a reputation for subtlety.

       -Isaac Asimov,1920-1992 

 

Dear Friends,

 Tangents: Michael Bloomberg, Mayor of New York City, addressing graduates of The George Washington University in Washington, D.C. earlier this month: 

As you think about your career, whatever you do, don’t worry about mapping it all out.  Just don’t play it safe.  Don’t be the person who quits a start-up company, or a band, before giving it a chance to make it big.  And don’t be afraid to start over or change direction.  The more risks you take, the happier you will be, even if they don’t work out,  And I can assure you, sometimes they won’t.  But I can also assure you this: No matter what job you have, no matter who your employer is, the harder you work, the luckier you will get….My advice is relatively simple: Continue learning.  Continue asking difficult questions.  Continue thinking independently.  Continue volunteering your time to help others.

Photo of the day

June 23, 2011

A motocross rider participates in the ‘Rocket Ride’ race during Erzberg Rodeo near the village of Eisenerz in the Austrian province of Styria. Erzberg Rodeo is one of the biggest Enduro races in the world and takes place from June 23 until June 26, 2011. Lisi Niesner/Reuters

Market Commentary: 

Canada

By Matt Walcoff

June 23 (Bloomberg) — Canadian stocks fell for a second day after European Central Bank President Jean-Claude Trichet said the continent is at a “red” level of risk and the U.S. reported an increase in initial jobless claims.

Nexen Inc., an oil and gas producer with operations on five continents, dropped 2.1 percent as crude futures slumped to a four-month low. Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 1.5 percent as world financial stocks retreated. Barrick Gold Corp., the world’s biggest gold-mining company, declined 1.4 percent as the U.S. dollar rose against 14 of 16 other major currencies.

 The Standard & Poor’s/TSX Composite Index decreased 80.98 points, or 0.6 percent, to 12,979.58. The index had rallied 2.1 percent on June 20 and June 21 on speculation Greece will pass austerity measures to address its debt crisis.

“You get these momentary distractions, like we’ve figured out a solution, then the next day you realize, ‘Oh darn, there isn’t a Santa Claus,’” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.02 million) each for more than 250 families. “We’re piled to the outer solar system in debt, and banks are full of all these bad bonds.”

The stock benchmark fell 7.5 percent this quarter through yesterday as concern that Greece will default on its debts mounted and data on employment and manufacturing in the U.S. indicated a slowdown in the economic recovery. The S&P/TSX hasn’t ended a quarter with a drop of more than 6.2 percent since 2008.

When asked yesterday the level of the European Systemic Risk Board’s planned risk “dashboard,” board chairman Trichet said “red.”

“The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union,” Trichet said after a board meeting in Frankfurt. First-time unemployment claims in the U.S. climbed to 429,000 last week from 420,000 the week before, the Labor Department said today in Washington. None of the 47 economists in a Bloomberg survey had forecast a reading that high.

The Thomson Reuters/Jefferies CRB Commodity Price Index declined to the lowest level since January as 16 of 19 commodities in the index retreated. Crude oil sank 4.6 percent in New York.                   

Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, decreased 2.1 percent to C$18.53. Husky Energy Inc., Canada’s third-largest energy company by revenue, plunged 5.7 percent, the most in two years, to C$26.55 after saying it will sell shares at C$27.05 each.

Every S&P/TSX bank and all but one insurer retreated. TD fell 1.5 percent to C$78.50. Royal Bank of Canada, its larger rival, dropped 1.3 percent to C$53.82. Manulife Financial Corp., North America’s fourth-biggest insurer, declined 1.2 percent to C$16.

The U.S. dollar gained as much as 1.6 percent against the euro after Markit Economics’s composite index of euro-area purchasing managers’ surveys trailed all 16 estimates in a Bloomberg survey.

Gold futures fell the most since May 5, ending a seven-day streak of gains, and silver slumped 4.7 percent. Barrick dropped 1.4 percent to C$42.98. Goldcorp Inc., the world’s second- largest gold producer, slipped 1.3 percent to C$47.59. European Goldfields Ltd., which is developing precious- and base-metal projects, declined 6.4 percent to C$9.24.                   

BlackBerry maker Research In Motion Ltd. increased 5.5 percent to C$29.14. RIM’s smartphones are less likely than competitors’ to develop hardware problems, WDS, a Poole, England-based company that tracks customer-support calls, said in a statement today.

RIM shares remain down 50 percent for the year. Teck Resources Ltd., the country’s biggest base-metals and coal producer, climbed 3.1 percent to C$45.54. The company said it may buy back up to 40 million shares over the next year.

TMX Group Inc., the owner of the Toronto Stock Exchange, advanced for a fifth day, rallying 2.4 percent to a three-year high of C$45.30. Maple Group Acquisition Corp. raised its unsolicited bid for the company to C$50 a share from C$48 a share.

 US

By Rita Nazareth and Cecile Vannucci

June 23 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a second day, as concern grew that Europe’s debt crisis will hurt banks and an increase in jobless claims added to signs the economy is slowing.

JPMorgan Chase & Co. and Wells Fargo & Co. dropped at least 1.2 percent as European Central Bank President Jean-Claude Trichet said the debt crisis threatens to infect banks. Chevron Corp. and Exxon Mobil Corp. slid more than 1.6 percent as oil tumbled. Stocks pared losses on reports that austerity measures proposed by Greece to win a bailout were endorsed by officials from the European Union and the International Monetary Fund.

The S&P 500 declined 0.3 percent to 1,283.50 at 4 p.m. in New York, after earlier falling as much as 1.9 percent. The Dow Jones Industrial Average retreated 59.67 points, or 0.5 percent, to 12,050 today. About 8.3 billion shares changed hands on U.S. exchanges, 17 percent more than the three-month average.

“It’s discouraging,” said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.8 billion. “The Band-Aid being placed isn’t really to bail out Greece. It’s to bail out the banks that hold Greek paper. If you lead people to think that their banks are going to be insolvent, that creates more problems.”

The benchmark gauge of U.S. stocks fell 4.6 percent this month amid concern that Greece will default on its debt and weaker-than-expected economic reports. The S&P 500 was still up 2.1 percent this year amid government stimulus measures and better-than-expected corporate earnings.                        

Global stocks tumbled today as Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

Measures proposed by Greek Finance Minister Evangelos Venizelos to complete a 78 billion-euro ($111 billion) austerity package required to win a bailout were endorsed by officials from the European Union and International Monetary Fund, said a person familiar with the matter.

A “solidarity levy” of between 1 percent and 5 percent would apply to all Greek wage earners, with members of parliament paying the top rate, Venizelos said at a news conference in Athens today. Self-employed Greeks will have to pay a separate charge estimated at around 300 euros a year on average, he said.

“It would be nice to put that European crisis behind us,” said John Carey, a Boston-based money manager at Pioneer Investments, which oversees about $250 billion. “Some market participants may be reassured by the dedication of the European countries to addressing the issues. It may be they patch together some near-term way of addressing it. I’m not terribly hopeful that they can put this to bed any time soon.”

Stocks also fell as applications for jobless benefits increased by 9,000 to 429,000 last week, Labor Department figures showed, exceeding the highest estimate in a Bloomberg News survey of economists. Purchases of new U.S. houses fell in May for the first time in three months, showing the industry is struggling to gain momentum. Sales dropped 2.1 percent to a 319,000 annual pace last month, figures from the Commerce Department showed.                       

“We’re just ending QE2 and the intent of that was to build employment and sustain the economy,” Huntington’s Bateman said. “That hasn’t accomplished half of those objectives.”

The S&P 500 yesterday snapped a four-day rally after the Federal Reserve lowered its forecast for economic growth and said it will end its $600 billion bond-purchase program this month as planned. The second round of so-called quantitative easing, nicknamed “QE2” by investors, helped propel a 23 percent rally in the S&P 500 from when Fed Chairman Ben S.

Bernanke foreshadowed the plan on Aug. 27.

The S&P 500 traded today near its average price of the last 200 days of 1,262.65, a level monitored by analysts who study charts to make forecasts. A decline below the 200-day moving average could herald more losses, according to Schaeffer’s Investment Research.

“This is a key level,” said Ryan Detrick, senior technical strategist at Schaeffer’s in Cincinnati. “With all of the uncertainty and all the things that are out there, it makes it that much more important. Fear is definitely coming back.”

 The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, jumped 4.2 percent to 19.29.

The KBW Bank Index declined 1.1 percent as 21 of its 24 stocks retreated. JPMorgan retreated 1.5 percent to $40.07. Wells Fargo dropped 1.2 percent to $27.04.

Energy producers declined. Oil tumbled, erasing its gains for the year, after the International Energy Agency said its members would release crude from strategic reserves.

Chevron, the second-largest U.S. oil company, dropped 1.7 percent to $99.36. Exxon Mobil retreated 1.7 percent to $78.44.

 The Bloomberg U.S. Airlines Index of 11 stocks rallied 3.7 percent amid expectations for lower costs as oil fell. US Airways Group Inc. gained 5.1 percent to $8.91. AMR Corp. added 5.2 percent to $6.05.

Bed Bath & Beyond Inc. rose 5.3 percent to $56.93. The home furnishings retailer said profit will rise 15 percent to 20 percent in the year ending February 2012, increasing its estimate from a range of 10 percent to 15 percent.

Bristol-Myers Squibb Co. jumped 5.7 percent to $29.33. The pharmaceutical company’s blood thinner apixaban, being developed with Pfizer Inc., prevented more strokes with less major bleeding than traditional treatment in patients with irregular heartbeats in a key study. Pfizer rose 1.8 percent to $20.65.

  Have a wonderful evening everyone.

Be magnificent!

There will have to be rigid and iron discipline

before we achieve anything great and enduring,

and that discipline will not come by mere academic argument

and appeal to reason and logic.

Discipline is learnt in the school of adversity.

 

-Mahatma Gandhi, 1869-1948

As ever,

 Carolann

 Joy is not in things; it is in us.

       -Richard Wagner, 1813-1883 

Dear Friends,

 Tangents:  I’ve been in Vancouver the past couple of days attending a course at UBC on Financial Statement Analysis.  The instructor answered one of my questions with the statement, “Accounting is an art, not a science.”   Interesting perspective, but is obviously true nonetheless.  The emphasis during the course was on studying financial statements in order to determine the viability of a company and how companies like Enron and WorldCom (and perhaps) Sino-Forest get past the Auditors; what to look for, how to stand on guard….I picked up a copy of The Vancouver Sun this morning and a headline caught my eye, “ 7-billionth person expected this fall.”   The statistics are startling:

• About 1.1 billion people will migrate from the countryside into Asia’s cities in less than 20 years, according to the Asian Development Bank (ADB).

 

• India needs to build the equivalent of a city of Chicago every year to provide enough commercial and residential space for its migrants, according to McKinsey Global Institute (MGI) research.

 

• One hundred new cities from China will join the list of the top 600 urban centres – which generate about 60 per cent of global GDP – in the next 15 years, says MGI.

 

Journalist Tom Brokaw gave the commencement speech at St. Lawrence University this month.  He said,

“You cannot get through this world alone.  You need each other  – and we need you to celebrate one another in a common cause of restoring economic justice and true value, advancing racial and religious tolerance, creating a healthier planet.

  We do that by listening and reasoning, not by shouting and fighting.  Beware of ideological tyranny and uncompromising certainty.  Do not become hostage to the orthodoxy of others.  This country was built on big, bold ideas that served the common welfare.”

Photo of the day

June 22, 2011

Farmers harvest rice at a paddy field in Ha Hoi village, 12.5 miles south of Hanoi. Vietnam has contracted to sell around 100,000 tonnes of 25 percent broken rice to several African nations so far this month, helping to keep prices stable at the start of a harvest. Kham/Reuters

Market Commentary:

 

Canada

By Matt Walcoff

June 22 (Bloomberg) — Canadian stocks fell for the first time in three days after the U.S. Federal Reserve cut its growth forecasts and corn, wheat and copper futures dropped.

Bank of Montreal, Canada’s fourth-largest lender by assets, declined 1.5 percent after the Fed lowered its 2011 forecast for gross domestic product increase by 0.4 percentage points. Barrick Gold Corp., the world’s largest producer of the metal, gained 1.4 percent as gold futures rose for a seventh day. Bombardier Inc., a maker of trains and airplanes, fell 4.8 percent after rival Airbus SAS won an order for 80 single-aisle aircraft from Republic Airways Holding Inc.

The Standard & Poor’s/TSX Composite Index slipped 2.76 points, or less than 0.1 percent, to 13,060.56.

“The market’s still pretty edgy,” said Irwin Michael, a money manager at ABC Group of Funds in Toronto, which oversees about C$1 billion ($1.03 billion). “I don’t know whether people expected an extension of QE2,” the second round of asset purchases begun in November.

 The stock benchmark rallied 2.1 percent June 20 and yesterday for the biggest two-day gain in seven months as Greek Prime Minister George Papandreou won support for a Cabinet shuffle. The S&P/TSX tumbled 10 percent from April 5 to June 17 as world equities retreated on concern a Greek debt default will derail the global recovery.

US

By Rita Nazareth and Cecile Vannucci

June 22 (Bloomberg) — U.S. stocks declined, halting a four-day rally, after the Federal Reserve lowered its forecast for economic growth and said it plans to finish its $600 billion bond-purchase program this month as scheduled.

Adobe Systems Inc., the world’s largest maker of graphic- design software, retreated 6.3 percent after reporting lower- than-expected Europe sales. Sprint Nextel Corp. decreased 2.3 percent as Sanford C. Bernstein & Co. said the company faces risks from its strategy for fourth-generation phones. FedEx Corp., operator of the world’s biggest cargo airline and considered a proxy for the economy, advanced 2.6 percent after forecasting earnings that may top analysts’ projections.

The Standard & Poor’s 500 Index lost 0.7 percent to 1,287.14 at 4 p.m. in New York, after rallying 2.4 percent over the previous four days. The Dow Jones Industrial Average dropped 80.34 points, or 0.7 percent, to 12,109.67 today.

“The Fed is pretty conscious of the fact that the economy has softened,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “Even though the economy may stabilize, it’s a less exciting picture right now. Stock players are going to be a little more reluctant to take risks.”

The S&P 500 has retreated 5.6 percent from this year’s high at the end of April amid weaker-than-estimated economic data and concern about Europe’s debt crisis. The benchmark gauge for American equities was still up 2.4 percent in 2011 on government stimulus measures and better-than-expected earnings.               

Fed officials lowered their forecasts for growth and employment this year and next, projecting the economy will expand 2.7 percent to 2.9 percent this year, down from forecasts ranging from 3.1 percent to 3.3 percent in April. U.S. central bankers said inflation, excluding food and energy, will be somewhat higher than previously forecast. They said the pace of recovery is likely to “pick up over coming quarters.”

“The economic recovery is continuing at a moderate pace, though somewhat more slowly than the committee had expected,” the Federal Open Market Committee said today in a statement.

“The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings.”

The S&P 500 surged 23 percent since Fed Chairman Ben S. Bernanke’s Aug. 27 speech in Jackson Hole, Wyoming, where he foreshadowed the second round of bond purchases, known as quantitative easing or QE, to boost the economy.                         

In a Twitter post this morning, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said the Fed at its Jackson Hole meeting this August “will likely hint” at a third round of quantitative easing and an effort to limit borrowing costs through interest-rate caps.

“The economy would have to decelerate materially from here for the Fed to do another round of quantitative easing,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $48 billion. “The economy will continue in a low trajectory of recovery. The underlying fundamentals remain in place.”

Adobe fell 6.3 percent to $30.01. The San Jose, California- based company dealt with uneven overseas sales in the second quarter while readying a new version of its flagship Creative Suite software. Europe was weaker than anticipated primarily because customers in Scandinavia and the U.K. held back purchases, Chief Financial Officer Mark Garrett said on a conference call yesterday.

Adobe also said profit for the third quarter may be as low as 50 cents a share, compared with the 54-cent average analyst projection, excluding certain items.

Sprint Nextel declined 2.3 percent to $5.12. Investors are optimistic about a turnaround, according to Craig Moffett, an analyst at Sanford C. Bernstein. “We remain concerned that the stock does not fully discount the financing risks associated with building a 4G network, and that subscriber forecasts remain overly optimistic given deterioration in overall post-paid market trends,” he wrote in a report today.

FedEx climbed 2.6 percent to $91.44. The company is benefiting from a pickup in worldwide shipping and higher pricing. The express unit’s overall revenue per package, or yield, added 10 percent to $22.69 in the quarter through May, FedEx said.

“The FedEx data today is as good as anything,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, which manages $1.5 billion. “Boxes are still moving and that’s a sign that business is getting done.”

CarMax Inc. gained 7 percent, the most in the S&P 500, to $32.66. The largest U.S. seller of used cars sold more vehicles at higher prices in its first fiscal quarter.

U.S. corporate profit margins are so high that a return to normal will cut about 3 percentage points a year from any future stock-market gains, according to Pierre Lapointe, a strategist at Brockhouse & Cooper Inc.

Margins in the first quarter were 11.3 percent overall and 13 percent in the non-financial category, based on Commerce Department data. These were the highest readings since 2007, before the latest recession started. Both were about two points higher than the average since the 1970s.

“We see no way around margin contraction,” Lapointe and economist Alex Bellefleur wrote yesterday in a report with a similar chart. U.S. companies are vulnerable even though they are increasingly generating profits overseas, they wrote.

Have a wonderful evening everyone.

Be magnificent!

“All things are linked together through cause and effect.  There is no such thing as an accident.

When we cannot find the link between cause and effect in an event, we call it an accident.” 

-Swami Prajnanpad, 1891-1974

 

As ever,

 Carolann 

“Work and struggle and never accept

an evil that you can change.”

           -André Gide, 1869-1959

 

Dear Friends, 

The summer solstice shouldn’t come as a surprise. It arrives at pretty much the same time every year. But some of the little-known facts behind and surrounding the solstice are fascinating. Summer in the Northern Hemisphere will officially arrive on Tuesday June 21, at 1:16 p.m. EDT (17:16 Universal Time ): the June solstice.  At the same time, winter officially begins for the Southern Hemisphere.

At that moment, the sun will reach the point where it is farthest north of the celestial equator. To be more precise, when the summer solstice occurs, the sun will appear to be shining directly overhead at a point on the Tropic of Cancer (latitude 23.5 degrees north) in the Great Bahama Bank, roughly halfway between Andros Island and central Cuba.

 “A perfect summer day is when the sun is shining, the breeze is blowing, the birds are singing, and the lawn mower is broken.”

— James Dent

 
Photos of the Day:

Farmers push a boat carrying their pigs in a flooded area of Lanxi City, Zhejiang Province June 21 2011. REUTERS/Lang Lang

 

A man celebrates the summer solstice at the market for the summer solstice at the Kokinko megalithic observatory June 21, 2011. REUTERS/ Ognen Teofilovski

Market Commentary:

 Canada

(Reuters) – Toronto’s main stock index ended sharply higher on Tuesday, posting its biggest one-day gain in three months on the back of stronger commodity prices that rose on hopes for a deal to resolve Greece’s debt crisis

Consensus grew that Prime Minister George Papandreou would survive a confidence vote, the first of three tests the Greek government must survive to avert the euro zone’s first sovereign default. The vote is due around 5 p.m. EDT (2100 GMT). The optimism whetted investor appetite for riskier assets and drove global stocks and commodity prices higher.

“The market is discounting the fact that the Greek prime minister will survive tonight’s confidence vote, so a relief rally on the back of that,” said Fergal Smith, managing market strategist at Action Economics. He warned however that market players were talking about Tuesday’s bounce being a low-volume, rally and whether it could be sustained.

Materials and energy issues rose 3.1 percent and 1.8 percent respectively. The two groups together make up about half of the TSX index.

Potash Corp was the most influential gainer on the index, building on the previous session’s advance as it rose 3.5 percent to C$52.38. Canadian Natural Resources was close behind, climbing 3.5 percent to C$39.15, while Teck Resources surged 5.2 percent to C$45.47. Toronto-Dominion Bank gave the strongest showing among banks, rising 1.6 percent to C$80.17. Smith noted that progress on the debt ceiling talks in the United States was also positive for the market, as well as signs that U.S. vehicle assembly has been recovering faster than anticipated, which supported the view that growth will rebound in the second half of the year.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 205.62 points, or 1.6 percent, at 13,063.32. It was the biggest one-day gain since March 21. Nine of the TSX’s 10 main groups were higher. Health care stocks were down 0.9 percent.

Smith said significant near-term resistance would be found around the 200-day moving average, which sits just below 13,300. “Temporarily, it looks like we’ve hit a bottom here, because bad news is being somewhat forgiven and good news is being treated pretty heartily,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. Though he also cautioned that the confidence may not last long.

“Something else could hit us over the head and we’re back down. But, having said that, it’s better than if we keep going down, down, down.”

Among the decliners, EnCana was the biggest weight on the index, falling 1.4 percent to C$29.06. The company called off a proposed C$5.4 billion deal to sell half its holdings in a prolific shale gas region in British Columbia to PetroChina, saying it would seek new partners.

Sino-Forest was the second heaviest laggard, sinking 27 percent to C$1.99 after its biggest shareholder, billionaire hedge fund manager John Paulson, dumped his entire 14 percent stake in the company late Monday.

Research In Motion, which has reportedly begun handing out layoff notices, jumped more than 9 percent to C$27.74 after falling more than 26 percent following Friday’s disappointing results and outlook. RIM’s recent sharp selloff has fueled speculation that the company is looking like a more attractive takeover target.

Looking ahead to Wednesday, the market will shift its focus to the second day of the Federal Open Market Committee’s meeting, with a news conference by Federal Reserve Chairman Ben Bernanke. The U.S. central bank is expected to cut its growth forecast for 2011, but Bernanke will likely continue to argue the slowdown is temporary and offer no hints at a third round of quantitative easing.

(Reporting by Claire Sibonney)

US

(Reuters) – Stocks posted gains for the fourth day on Tuesday on growing hopes that Greece will avoid a debt default, adding momentum to the market’s recent rebound.

The Nasdaq had its biggest percentage gain since October, while the S&P 500 marked its best day in two months in what investors believe could be continued short-term buying from deeply oversold levels. The Nasdaq reclaimed positive territory for the year and led the market’s advance, boosted by a jump in semiconductor stocks. A semiconductor index .SOX shot up 2.5 percent, its best gain since April.

Consensus grew that Prime Minister George Papandreou’s cabinet would survive a confidence vote after the U.S. market close. The confidence vote is seen as the first step in moving closer to a resolution of Greece’s debt crisis.

It could pave the way for more aid and also remove a source of constant worry about global banks’ exposure to the euro zone’s debt problems. The PHLX KBW Bank Index gained 1.1 percent after touching a 52-week high earlier in the day.

“If you’re an investor, you don’t want this Greek debt crisis to touch off another round of financial contagion around the world,” said Michael Sheldon, chief market strategist of RDM Financial, in Westport, Connecticut.

The Dow Jones industrial average rose 109.63 points, or 0.91 percent, to 12,190.01 at the close. The Standard & Poor’s 500 Index gained 17.16 points, or 1.34 percent, to 1,295.52. The Nasdaq Composite Index climbed 57.60 points, or 2.19 percent, to 2,687.26.

The Nasdaq ended Tuesday’s session above its 50- and 200-day moving averages, for the first time since May 31.

The Dow and the S&P 500 finished last week with gains after six weeks of declines. The Nasdaq, however, ended the week in the minus column.The S&P 500 is down 5 percent since its May 2 high.

During the session, the Nasdaq also got a lift from U.S.-traded shares of Research In Motion Ltd, which gained 10.3 percent to $28.55 after falling about 7 percent on Monday.

The vote in Greece’s parliament was due around 5 p.m. EDT (2100 GMT). Officials said the Greek government had until July 3 to approve new steps to get the next installment of 110 billion euros in aid from the European Union and the International Monetary Fund.

Analysts cautioned, however, there could be steep downside potential if the vote doesn’t go as expected. A default by Greece “would be another domino falling from the financial crisis,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

Among stock gainers, Best Buy Co Inc rose 2.7 percent to $32.38 after the electronics retailer raised its dividend and approved a stock-repurchase plan. On the downside, Walgreen Co fell 4.2 percent to $43.28 after it failed to renew a deal with pharmacy benefits manager Express Scripts Inc. Express Scripts shares rose 0.4 percent to $54.99.

The Federal Open Market Committee began a two-day meeting, with an announcement expected Wednesday afternoon, followed by Federal Reserve Chairman Ben Bernanke’s new conference. The Fed is expected to cut its growth forecast for 2011, but Bernanke probably will continue to argue the slowdown is temporary.

Advancing stocks outnumbered declining ones on the NYSE by nearly 6 to 1. On the Nasdaq, advancers beat decliners by about 4 to 1.

(Reporting by Caroline Valetkevitch; Additional reporting by Ashley Lau; Editing by Jan Paschal)

 Be magnificent!

“The most primitive work of art also can express the strongest experience, and it speaks to us, if only we let it.” –Ludwig Von Mises

 As Always,

Kyle for Carolann

Dear Friends, as another day draws to a close here is the Newsletter June 20^th, 2011

 “When you are sorrowful look again in your heart, and you shall see that in truth you are weeping for that which has been your delight”.  ~Kahlil Gibran 

And in Today’s Canadian Birthdays… Anne Murray 1945-
Singer Anne Murray was born on this day at Springhill, Nova Scotia in 1945. Murray has sold over 24 million records; her major hits include Love Song [Grammy 1974], You Needed Me [Grammy 1978], Could I Have This Dance [Grammy 1980], A Little Good News [Grammy 1983]; as well as Snowbird, You Won’t See Me, He Thinks I Still Care, Shadows In the Moonlight, Danny’s Song, You Won”t See Me, and What Would It Take; has won numerous Juno and American Music Awards; lives in Toronto and just released new self-titled album, Anne Murray;

Photo’s of the day:

 

An aerial view of the 49th Paris Air Show at Le Bourget airport, near Paris. The Paris Air Show runs from June 20-26. Pascal Rossignol/Reuters

Venus Williams of the US reaches to hit a return to Akgul Amanmuradova of Uzbekistan at the Wimbledon tennis championships in London. Eddie Keogh/Reuters

Market Commentary:

Canada

By Matt Walcoff 

The Canadian dollar fluctuated versus its U.S. counterpart as oil, Canada’s biggest export, erased losses and stocks rose after a European leader eased concern that Greece won’t get aid it needs to avoid a default.

Canada’s currency earlier fell to almost the lowest level in three months versus the U.S. dollar as investors took refuge in the greenback on speculation European governments won’t succeed in preventing a Greek default, damping demand for higher-yielding assets. The Canadian dollar rose against its Australian and New Zealand counterparts.

“Overall risk aversion will still play out, and we’re very much watching the European situation,” said John Curran, a senior vice president in Toronto at CanadianForex Ltd., an online foreign-exchange dealer. “Anything that comes out in that regard will have an effect on the Canadian dollar.”

Canada’s currency, sometimes called the loonie for the image of the bird on the C$1 coin, depreciated as much as 0.6 percent to 98.50 cents per U.S. dollar before trading little changed at 97.98 cents at 5 p.m. in Toronto. It closed on June 17 at 97.94 cents, after touching 98.99 cents the day before, the weakest level since March 17. One Canadian dollar purchases $1.0204 U.S. cents.

It gained 0.3 percent versus the Australian dollar to C$1.0370 and appreciated 0.3 percent to 79.38 cents per New Zealand dollar. Canada’s dollar dropped 0.3 percent against the Mexican peso to 12.1121.

The loonie erased its loss versus the U.S. dollar after Luxembourg Prime Minister Jean-Claude Juncker said he’s received assurances that Greece will do all that’s needed to win aid from the European Union and the International Monetary Fund.

Crude, Stocks

Crude oil for July delivery traded at $93.46 a barrel in New York, up 0.5 percent, after earlier dropping as much as 2 percent. The Standard & Poor’s 500 Index rose 0.5 percent after earlier falling 0.3 percent.

Canadian government bonds fell, pushing the yield on the benchmark 10-year note up two basis points to 2.96 percent. The price of the 3.25 percent security due in June 2021 dropped 18 cents to C$102.44.

The euro region’s top economic policy makers, on the eve of a confidence vote that threatens to topple Greek Prime Minister George Papandreou’s government, pushed the Mediterranean nation to pass laws to cut its deficit and sell state assets. They left open whether Greece will get the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline. Decisions on the payout and a three-year follow-up package were put off until early next month.

Juncker Gets Assurance

Juncker, who heads the euro-area finance ministers group, told reporters in Luxembourg that Papandreou assured him the Greek government will do everything necessary to ensure delivery of financial aid.

Canadian Finance Minister Jim Flaherty said today he sees the possibility of Europe’s sovereign-debt crisis spreading.

“There is a real danger of contagion stemming from the situation in Europe, and we know that delay causes more difficulties, makes the situation more expensive and creates more strife,” Flaherty said in a speech to an insurance conference in Toronto.

The Canadian dollar will trade in a seasonal range between 95 cents and parity versus the U.S. dollar, said Firas Askari, head currency trader in Toronto at Bank of Montreal’s BMO Capital unit.

Euro ‘the Catalyst’

“How the euro will hold up is the catalyst for all major pairs, until it’s resolved one way or another,” he said, referring to the Greek crisis.

The Canadian dollar sank to the lowest level in three months last week versus its U.S. counterpart as weaker-than- forecast data signaled the American economy is slowing, and crude, Canada’s biggest export, dropped the most in a month. Canada ships about three-quarter of its exports to the U.S.

The loonie tumbled on June 16 as the Federal Reserve Bank of Philadelphia’s general economic index unexpectedly fell in June to minus 7.7, the lowest level since July 2009, from 3.9 in May. Readings less than zero signal contraction. The data followed the New York Fed’s Empire State Index a day earlier, which showed manufacturing in its region also fell this month.

Sales of existing homes in the U.S. probably dropped in May to the lowest level of the year, an annual rate of 4.8 million, according to the median forecast in a Bloomberg News survey of economists before a report tomorrow by the National Association of Realtors.

Canadian retail sales increased 0.4 percent in April after stalling the previous month, according to the median forecast in a separate Bloomberg survey before Statistics Canada reports the data tomorrow. The leading indicators index rose 0.5 percent last month, compared with a gain of 0.8 percent in April, economists estimated before another report by the statistics agency tomorrow.

US

By Rita Nazareth

U.S. equities climbed for a third day, while the euro erased losses and European stocks pared declines, amid European assurances that a solution will be found to spare Greece from default. Treasuries reversed gains.

The Standard & Poor’s 500 Index increased 0.5 percent to 1,278.36 at 4 p.m. in New York and the Stoxx Europe 600 Index lost 0.5 percent, recovering more than half of a 1.1 percent slide. The 10-year Treasury note yield was up one basis point at 2.95 after sinking as much as six points. The S&P GSCI Index of commodities fell for a fourth day, with wheat, heating oil and coffee leading declines. The euro was little changed at $1.4301 after earlier sinking as much as 0.8 percent.

The 17-nation shared euro currency also erased its decline versus the yen as Luxembourg’s Jean-Claude Juncker said Italy was not in danger from the debt crisis. Juncker said Greek Prime Minister George Papandreou had assured him the government would do everything to ensure financial aid from the European Union and International Monetary Fund before the Greek parliament resumes debating a motion of confidence in the government.

“We may be past the point of maximum pessimism,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “Looking at the consequences of not funding Greece, they will do it,” she said. “The goal is making sure that the global financial system stays operating. The market is a whole lot cheaper than it was. Still, we’re going to have ups and downs on a daily basis. It’s not going to be calm and smooth sailing for the next several months.”

Greece Negotiations

Earlier losses in stocks and the euro were triggered by European officials’ failure to agree on a Greek loan payout. Euro-area finance ministers who met yesterday in Luxembourg put off a decision on whether Greece will get the full 12 billion euros ($17 billion) promised for July and pushed for the nation to press ahead with budget cuts. Prime Minister Papandreou faces a confidence vote this week.

Assurances by Luxembourg’s Juncker, who leads the group of euro-area finance ministers, helped reverse the market declines. Juncker said private investors will be “present” in any second rescue package for Greece, though he said he doesn’t know if they’ll be “enthusiastic.”

The IMF is focused on getting Greece’s first bailout program on track, Acting Managing Director John Lipsky told reporters in Luxembourg today. Greece hasn’t approached the agency to ask for additional aid, he said.

Third Straight Gain

The S&P 500 rose for a third straight day after snapping a streak of six weekly losses on June 17. The index is down 6.3 percent from an almost three-year high at the end of April, trimming its 2011 gain to less than 2 percent, as lower-than- forecast data on jobs growth and manufacturing spurred concern the economic expansion is slowing.

Caterpillar Inc. (CAT) rose 2.3 percent for the top gain in the Dow Jones Industrial Average after being raised to “strong buy” at Raymond James & Associates. DuPont Co. and Microsoft Corp. (MSFT) also climbed more than 0.8 percent to help lead gains in 25 of 30 Dow stocks.

Goldman Sachs Group Inc. reduced its second-quarter growth forecast for the world’s largest economy to 2 percent from 3 percent. Reports this week will probably show home sales dropped in May to the lowest level of the year, while orders placed with factories increased, according to economists surveyed by Bloomberg.

Falling Commodities

The S&P GSCI index of 24 commodities fell 0.3 percent for a fourth straight decline, the longest selloff since May 6, as wheat, heating oil and coffee fell at least 1.7 percent. New York-traded oil rose 25 cents, or 0.3 percent, to settle at $93.26 a barrel after sliding as much as 2 percent earlier. Copper fell 0.5 percent.

Bank shares were the biggest drag of 19 industry groups in Europe’s Stoxx 600, with Banca Popolare di Milano Scrl plunging 7.4 percent and Banca Monte dei Paschi di Siena SpA tumbling 2.6 percent.

The Swiss franc strengthened against its 16 major peers. The Australian dollar fell versus all of its biggest counterparts, losing 0.5 percent against the U.S. currency.

The U.S. currency rose against higher yielding counterparts such as the Australian and New Zealand dollars as strategists speculated that the Federal Reserve won’t signal a third round of quantitative easing after a meeting on June 22. The Federal Open Market Committee has kept its benchmark rate unchanged between zero and 0.25 percent since December 2008.

Greek 10-year bonds slid, driving the yield up 40 basis points to 17.34 percent. The extra yield, or spread, investors demand to hold the securities instead of benchmark German bunds increased 40 basis points to 1,438 basis points.

Italian-German Spread

The Italian-German spread widened three basis points after Moody’s put Italy’s Aa2 rating on review for a downgrade June 17, citing economic growth challenges, risks associated with efforts to reduce debt and the potential for higher borrowing costs.

The Markit iTraxx SovX Western Europe Index of credit- default swaps erased earlier gains, dropping 1.3 basis point to a mid-price of 221.

The MSCI Emerging Markets Index slid 0.4 percent, falling for a fourth day. The Bombay Stock Exchange Sensitive Index sank 2 percent after a report that the government sought to tax gains on investments routed through Mauritius. Turkey’s ISE National 100 Index lost 1.2 percent after regulators increased provisions that lenders must make against some consumer loans. Russia’s Micex Index slipped 1.2 percent on lower oil.

The MSCI Asia Pacific Index slid 0.4 percent as energy and raw-material producers led losses. BHP Billiton Ltd., Australia’s biggest oil producer, sank 1.4 percent in Sydney. Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, lost 2 percent in Hong Kong after Walter Kwok, a former chairman, said the city’s property prices may fall as much as 15 percent by the end of the year.

Japanese power companies advanced after the government said it may allow atomic reactors to restart following the worst nuclear accident in 25 years.

 Be magnificent!

 “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” -Martin Luther King

 As always, 

 Summer, for Carolann

 

 

 

Dear Friends, 

Tangents:

 I attended the 125^th anniversary party for Mercedes-Benz early Friday evening put on by the local dealership – they had the first Benz model ever made shipped over for the event.  It looked like a bicycle….Wow – have we ever come a long way in car design!   They had an old gull-wing like former Prime Minister Trudeau drove and we were reminiscing about the image of Trudeau driving it with the top down and his neck scarf blowing in the wind.   This month  also marks the anniversary of UNIVAC, the first commercially successful computer.  It had its first initial public workout in Philadelphia in June, 1951.  Five years in the making by J. Presper Eckert and John Mauchly (investors or the earlier ENIAC), UNIVAC (universal automatic computer) was 14 ½ feet long, 7 ½ feet wide and 8 feet high.  Bought by the Census Bureau, it spat out demographic data at 120 facts per second.  Forty-six UNIVACS, with prices starting at $600,000, were sold for inventory, payroll, insurance and other business applications.

Photos of the day

June 17, 2011

 

Jack Merriam plays with the interactive ‘Silver Clouds’ art installation in The Prints of Andy Warhol (From A to B and Back Again) exhibit at the Washington Pavillion in Sioux Falls, S.D., on Friday. The exhibit, which opened Friday and runs through Sept. 11, features 63 original works, one interactive art installation and a video by Andy Warhol.Devin Wagner/Argus Leader/AP

 

Jacquie O’Brien cleans up during installation of a sculpture by Nancy Rubins at the Albright-Knox Art Gallery in Buffalo, N.Y. on Friday. The yet untitled sculpture is made from more than 60 used aluminum canoes and other boats. David Duprey/AP

Market Commentary:

Canada

By Matt Walcoff

June 17 (Bloomberg) — Canadian stocks fell, completing a third-straight weekly decline, after Research In Motion Ltd. cut its earnings forecasts and oil futures dropped to the lowest level in almost four months.

RIM, the BlackBerry maker, plunged 22 percent. Royal Bank of Canada, Canada’s biggest lender by assets, increased 1.2 percent after people familiar with the situation said it is in advanced talks to sell its U.S. retail unit to PNC Financial Services Group Inc. Suncor Energy Inc., Canada’s biggest oil and gas producer, declined 0.9 percent as oil slumped after the International Monetary Fund cut its estimate of U.S. growth.

The Standard & Poor’s/TSX Composite Index slipped 63.18 points, or 0.5 percent, to a seven-month low of 12,789.95, extending its weekly retreat to 2.3 percent.

“The U.S. has slowed down dramatically,” said Blair Falconer, a money manager who oversees about C$800 million ($816million) for HSBC Securities (Canada) Inc. in Toronto. “It looks like we’re going to have an extended slow-growth period.”

The S&P/TSX sank 6.9 percent this month through yesterday as the risk of a default on Greek government debt climbed and data on employment and manufacturing trailed economists’ forecasts. The stock benchmark has tumbled 10 percent since April 5, meeting the common definition of a correction. RIM sank 22 percent, the most since September 2008, to C$27.24. The company forecast 2012 earnings of $5.25 a share to$6 a share, excluding certain items, after estimating $7.50 a share in April. At least five analysts cut their ratings on the stock.                       

Celestica Inc., which makes electronics for companies including RIM, slumped 7.5 percent, the most in two years, to C$7.91. Jim Suva, an analyst at Citigroup Inc., lowered his rating on Celestica to “sell” from “hold,” citing RIM’s outlook in a note to clients.

Royal Bank rallied 1.2 percent to C$54.33 after people who spoke on condition of anonymity said PNC is likely to prevail over a rival bid from BB&T Corp. The business may fetch as much as $3.7 billion, Peter Routledge, an analyst at National Bank Financial, said in April.

The S&P/TSX Energy Index fell to a six-month low as oil futures extended their weekly drop to 6.3 percent. Suncor declined 0.9 percent to C$37.17. Cenovus Energy Inc., Canada’s fifth-largest energy company, lost 1.5 percent to C$32.65.

Magna International Inc., Canada’s biggest auto-parts maker, rose 5.1 percent to C$47.47 for a fifth-straight gain as lower fuel prices boosted world transportation-equipment stocks.

Fertilizer producers dropped for a second day a day after the U.S. Senate voted to eliminate a tax credit for ethanol. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 2.8 percent to C$49.55. Agrium Inc. lost 2.6 percent to C$78.01.              

 First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, advanced 3.2 percent to C$119.01 after saying it split its shares five-to-one effective Aug 9, pending shareholder approval.

Bridgewater Systems Corp., which makes software for wireless carriers, soared 28 percent, the most in three years, to C$8.10 after agreeing to be bought by Amdocs Ltd. for C$8.20.

Mosaid Technologies Inc., a semiconductor developer, sank 14 percent, the most since 2005, to C$26.97 after forecasting 2012 earnings below analysts’ estimates. Brian J. Piccioni, an analyst at Bank of Montreal, and Sean Peasgood, an analyst at Wellington West Capital Inc., cut their ratings on the shares to “market perform.”

 US

By Rita Nazareth

June 17 (Bloomberg) — U.S. stocks snapped a six-week decline as European leaders moved closer to a compromise on a financial rescue for Greece and an index of leading American economic indicators advanced more than forecast. Wells Fargo & Co. and Fifth Third Bancorp rose at least 1.9 percent, following gains in European banks. The Bloomberg U.S. Airlines Index of 11 stocks gained 2.7 percent as oil fell to the lowest level in four months. Research In Motion Ltd. tumbled 21 percent, sparking a slump in technology shares, after forecasting revenue and profit that missed analysts’ estimates.

The Standard & Poor’s 500 Index advanced 0.3 percent to 1,271.50 at 4 p.m. in New York. The benchmark gauge has added less than 0.1 percent since June 10, preventing the longest weekly slump since March 2001. The Dow Jones Industrial Average increased 42.84 points, or 0.4 percent, to 12,004.36 today.

“This may be an excellent entry point for stock investors,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “There are expectations that an agreement on Greece’s bailout may be reached. If we can get rid of the fears over Europe, it all comes down to — do we believe the economy will reaccelerate in the second half of this year? If that’s the case, stocks have room to rally.”

The S&P 500 has retreated 6.8 percent from this year’s high at the end of April amid weaker-than-expected economic data and concern about Europe’s debt crisis. The decline threatened the 2011 gain for the S&P 500 this week and left the index up 1.1 percent this year.

 Global stocks rose today as Chancellor Angela Merkel retreated from German demands that bondholders be forced to shoulder a “substantial” share of a Greek rescue, saying she’ll work with the European Central Bank to avoid disrupting markets.

“We would like to have a participation of private creditors on a voluntary basis,” Merkel told reporters in Berlin today at a joint press conference with French President Nicolas Sarkozy. This “should be worked out jointly with the ECB and there shouldn’t be any dispute with the ECB on this.”

Merkel and Sarkozy signaled a reconciliation between German calls for investors to help bail out Greece with warnings from the ECB and France that a compulsory move risked triggering the euro area’s first sovereign default. Attention now shifts to Athens, where Prime Minister George Papandreou overhauled his Cabinet to try and secure passage of austerity measures needed for a bailout.                      

Stocks extended gains after data showed that the index of U.S. leading indicators rebounded in May after declining for the first time in almost a year, a sign economic growth may pick up by the end of 2011. The Conference Board’s gauge of the outlook for the next three to six months rose 0.8 percent after a revised 0.4 percent decline in April, the New York-based group said today. Economists forecast a 0.3 percent gain, according to the median estimate in a Bloomberg News survey.

Benchmark gauges rose even after the Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 71.8 from 74.3 in May. Economists forecast a reading of 74, according to the median estimate in a Bloomberg News survey.

“The economy is not as good as hoped, not as bad as feared,” said Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages about $161 billion. “It’s most likely a soft patch and the economy is going to do better toward the end of the year. We expect a volatile ‘risk-on, risk-off’ market.”                         

 A gauge of banks in the S&P 500 rose 1.3 percent, the biggest gain within 24 industries. Wells Fargo added 2 percent to $27.33. Fifth Third advanced 2.2 percent to $12.55.

 Airlines rallied amid expectations for lower costs as crude oil fell. U.S. oil supplies rose to the highest level in 31 years for the month of May as refineries processed less crude amid a decline in gasoline demand, according to the American Petroleum Institute.

Ten of 11 stocks in the Bloomberg U.S. Airlines Index gained. United Continental Holdings Inc. added 5.8 percent to $24.04. AMR Corp. gained 1.3 percent to $5.69.

Energy shares had the second-biggest decline in the S&P 500 within 10 industries, falling 0.3 percent as a group. Halliburton Co. dropped 0.8 percent to $46.02. Occidental Petroleum Corp. retreated 0.6 percent to $102.19.

Gauges of computer companies and chipmakers had the two biggest declines in the S&P 500 within 24 industries. RIM tumbled 21 percent to $27.75, the lowest since September 2006. RIM is losing market share in the U.S. to Apple Inc.’s iPhone and handsets running Google Inc.’s Android software, in part because it hasn’t introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models.

Marvell Technology Group Ltd., the maker of chips for personal computers and mobile phones, slumped 4.2 percent to $13.21. Jabil Circuit Inc., a contract electronics manufacturer, dropped 1.7 percent to $18.29.

Credit-rating companies declined after the Wall Street Journal reported that the U.S. Securities and Exchange Commission is considering laying civil fraud charges against some of the firms for their actions on mortgage-backed bonds, which helped trigger the financial crisis.

Moody’s Corp. slipped 5 percent to $36.35 for the biggest loss in the S&P 500. McGraw-Hill Cos. retreated 3.6 percent to $39.61.

 Have a wonderful weekend everyone.  Happy Fathers’ Day!

 Be magnificent!

 The healing of the mind takes place gradually on contact with nature,

with the orange on the branch, the blade of grass eating its way into the cement,

and the hills hidden by the clouds.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 I think, therefore

Descartes exists.

   -Saul Steinberg, 1914-1999