October 6, 2014 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office today, I will be writing the newsletter of her behalf.

PHOTOS OF THE DAY

A member of the Samaritan sect decorates a traditional hut known as a sukkah with fruits and vegetables on Mount Gerizim, on the outskirts of the West Bank City of Nablus. A sukkah is a ritual hut used during the week-long Jewish holiday of Sukkot which begins Monday at sundown. The Samaritans, who trace their roots to the northern Kingdom of Israel in what is now the northern West Bank, observe religious practices similar to those of Judaism. Abed Omar Qusini/Reuters

Exhibition curator Stephanie Stepanek talks about two paintings in the new exhibit ‘Goya: Order and Disorder’ during a press preview of works by the Spanish painter Francisco Goya at the Museum of Fine Arts in Boston, Massachusetts. The two paintings are portraits of the Duchess and Duke of Alba. Brian Snyder/Reuters

Market Closes for October 6^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Oct. 6 (Bloomberg) — Canadian stocks fell to a four-month low as declines among industrial shares and energy producers offset an advance in gold miners.

     Finning International Inc. tumbled 3.1 percent after analysts at Canaccord Genuity Corp. cut their rating for the stock to a hold from a buy. Air Canada jumped 3.9 percent after reporting gains in capacity and traffic in September. Torex Gold Resources Inc. rose 3.8 percent as gold increased from the lowest price this year.

     The Standard & Poor’s/TSX Composite Index fell 46.66 points, or 0.3 percent, to 14,743.12 at 4 p.m. in Toronto, the lowest close since June 3. The equity gauge has risen 8.2 percent this year.

     Eight of 10 industries in the benchmark gauge declined on trading volume 3.6 percent below the 30-day average today.

     Energy stocks fell 0.4 percent as a group, erasing earlier gains for a fifth straight decline. Oil rebounded from declines after gasoline futures climbed on reports that units at Irving Oil Corp.’s Saint John, New Brunswick, refinery will be shut for unplanned repairs through Nov. 20.

     The Canadian plant has the capacity to process 298,800 barrels a day of oil and exports over half of its refined products to the U.S. Northeast. The refinery will keep its largest fluid catalyst cracker closed, according to two people familiar with the repairs.

     Brent crude earlier fell to a 27-month low after Saudi Arabia cut its oil prices to all destinations, prompting speculation the world’s biggest exporter won’t lead supply cuts by the Organization of Petroleum Exporting Countries.

     Air Canada soared 3.9 percent to C$8.18 after reporting a system load factor of 84.7 percent in September, compared with 83.2 percent a year ago, on higher system capacity. Load factor is a measure of airline efficiency relative to capacity.

     Postmedia Network Canada Corp., operator of the National Post, jumped 11 percent to C$2.50 after agreeing to buy 175 newspapers and trade publications for C$316 million ($282 million) from Quebecor Inc.

     The sale includes English-language publications Toronto Sun and Calgary Sun, as well as the Canoe.com website and real- estate properties.

US

By Oliver Renick

     Oct. 6 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index halting a two-day advance, as small-cap shares resumed a selloff and investors awaited the start of corporate earnings season to assess the strength of the economy.

     Micron Technology Inc. fell 4 percent after Samsung Electronics Co. said it will spend $15 billion building a chip plant in South Korea. GT Advanced Technologies Inc. sank 93 percent after the company filed for bankruptcy. Hewlett-Packard Co. jumped 4.7 percent after saying it will split into two companies. CareFusion Corp. surged 23 percent as Becton, Dickinson & Co. agreed to buy the company for $12.2 billion.

     The S&P 500 fell 0.2 percent to 1,964.84 at 4 p.m. in New York, erasing an earlier 0.5 percent gain. The Dow Jones Industrial Average retreated 17.72 points, or 0.1 percent, to 16,991.97. The Russell 2000 Index of small companies dropped 0.9 percent after the gauge capped its fifth straight weekly decline.

     “We see stocks trading a little nervously today and this week before third-quarter earnings,” Jim Russell, a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said in a phone interview. “We’re anxious to see how company managements comment on the strong U.S. dollar and overseas revenue.”

     Alcoa Inc. unofficially starts the U.S. earnings season on Oct. 8. Eight other S&P 500 companies will post results this week, including  Yum! Brands Inc. and PepsiCo Inc. Profit at companies in the gauge rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.

     The S&P 500 climbed 1.1 percent on Oct. 3, paring a weekly decline, after data showed the U.S. jobless rate declined to a six-year low and employers hired more workers than economists had estimated. The dollar strengthened last week to a four-year high before weakening today.

     Stocks tumbled last week amid signs of economic weakness in Europe and geopolitical turmoil as the Federal Reserve is on course to end its bond-buying program this month. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.

     The Federal Open Market Committee releases minutes from its Sept. 16-17 meeting on Oct. 8.

     Selling last week was heaviest among small-cap stocks, with the Russell 2000 sliding 1.3 percent. The fifth weekly drop was its longest streak since 2008. The gauge closed Oct. 1 more than 10 percent below its record from March, meeting the common definition of a correction, before rallying in the final two days of the week.

     Losses today came as GT Advanced Technologies plunged 93 percent to less than $1. The maker of lab-grown sapphire used in mobile-device screens and parts supplier for Apple Inc. said it would continue operations during reorganization.

     “That came as a big sucker punch out of the blue,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It underscores how fragile any rally in the small caps is at this juncture. The small caps are behaving like frightened bunnies.”

     About 6.3 billion shares changed hands on U.S. exchanges today, 9.4 percent below the three-month average. Last week saw the busiest trading in six months for U.S. equities, with an average 7.2 billion shares moving each day.

     The Chicago Board Options Exchange Volatility Index rose 5.2 percent to 15.31 today. The gauge known as the VIX slid 2 percent last week.

     Seven of the 10 main industries in the S&P 500 retreated today, with consumer-discretionary stocks sliding 0.6 percent for the biggest loss. Phone stocks jumped 0.4 percent to pace gains.

     H&R Block Inc. fell 5.6 percent for the biggest decline in the S&P 500. The tax preparer said the sale of its banking unit to BofI Federal Bank is being slowed by a regulatory approval process. The firm had predicted the deal would close before tax season begins.

     Micron Technology fell 4 percent and SanDisk Corp. dropped 2.7 percent after Samsung announced plans for the new chip factory.

     Hewlett-Packard jumped 4.7 percent after announcing a split separating its corporate hardware and services operations, which will be led by current chief Meg Whitman, from the personal- computer and printer business. The latter will be led by Dion Weisler, currently vice president in charge of those operations.

     CareFusion soared 23 percent. Becton, Dickinson agreed to pay $58 a share for the San Diego-based company that provides drug management and patient safety services to hospitals. That’s a 26 percent premium to its Oct. 3 closing price. Becton, Dickinson climbed 7.9 percent.

     Durata Therapeutics Inc. rallied 75 percent as Actavis Plc announced a deal to acquire the maker of a skin-infection treatment.

Have a wonderful evening everyone.

Be magnificent!

“In oneself lies the whole world and if you know how to look and learn, the door is there and the key is in your hand. Nobody on earth can give you either the key or the door to open, except yourself.”  Jiddu Krishnamurti

As ever,

Karen

“The purpose of our lives is to be happy.” Dalai Lama

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