Author: Carolann

 

Dear Friends, 

Tangents:

 Gary went to a weekend conference in Toronto and took the direct flight from Victoria last Friday morning.  He told me that he knew a lot of the passengers on the plane because they were patients of his; they were servicemen who were going east for services to commemorate Veterans Day.   Some of them knew of the memorial we had helped establish with Gary’s dad, a WW II Navy Vet, for all Canadian War Veterans in Guelph. 

 Martinmas, Veterans’ Day, Armistice Day, November 11^th:

 St. Martin of Tours, France was a popular bishop in the Middle Ages.  The English shortened the name of his feast day from Martin’s Mass to Martinmas, and since the day fell at a time when people wanted to celebrate harvesting and wine making, it became a day for feasting and celebration.  A goose was often roasted for the occasion.  November 11 became Armistice Day in 1918 to mark the armistice between the Allies and the Central Powers that ended World War I.  The United States, England, and France celebrated the day jubilantly; many were sure there’d never be another war.  Now in England, France and Canada, in particular, the day commemorates those who died in both World War I and II.  In 1954, the United States changed the day to Veterans’ Day, to commemorate those who have served in the armed forces during all the country’s wars.  –from The Book of Holiday Around the World.

 

Photo of the day

November 8, 2011

Fallen leaves lay on the ground in a Field of Remembrance in Loughborough, central England. Darren Staples/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 8 (Bloomberg) — Canadian stocks swung between gains and losses as banks and base-metals shares rose and gold producers fell after Italy’s president said Prime Minister Silvio Berlusconi will resign.

Royal Bank of Canada, the country’s largest lender by assets, advanced 1 percent. TransCanada Corp., the owner of the country’s largest pipeline system, slipped 1.6 percent after a U.S. State Department official said the department is considering whether to seek a rerouting of the proposed Keystone XL pipeline. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, increased 3.2 percent as copper and zinc climbed.

The Standard & Poor’s/TSX Composite Index rose 10.52 points, or 0.1 percent, to 12,472.50 at 3:13 p.m. Toronto time, after falling as much as 0.2 percent earlier.

Berlusconi “has been perceived to be obstructionist with respect to the tougher parts of the austerity program, so him being gone would bring in a caretaker government that could potentially implement the austerity in a way that’s palatable to both the opposition and the governing party,” Bob Decker, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.5 billion). “The solvency issue is at the heart of the weakness of the markets.”

The S&P/TSX dropped 13 percent from April 5 to yesterday as oil declined 12 percent and copper sank 17 percent in part on concern the European debt crisis will weaken the global economy. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.                   

Financial stocks rose after Italian President Giorgio Napolitano said Berlusconi will resign after the country’s parliament approves the prime minister’s austerity plans.

Royal Bank gained 1 percent to C$46.44. Toronto-Dominion Bank, its largest domestic rival, advanced 0.8 percent to C$73.89. Manulife Financial Inc., North America’s fourth-biggest insurer, increased 1.1 percent to C$12.68.

TransCanada lost 1.6 percent to C$40.97 a day after a State Department official, speaking on condition of anonymity, said the U.S. may try to reroute the Keystone XL pipeline around Nebraska’s Sandhills region. Some environmentalists and property owners oppose the proposed link between Alberta’s oil sands and the Gulf of Mexico.

Canadian Oil Sands Ltd., the largest owner of the Syncrude project, retreated 1.7 percent to C$22.19.                         

SNC-Lavalin Group Inc., Canada’s largest construction and engineering company, climbed 2.7 percent to C$52.35 after winning a contract worth more than C$650 million for a treatment plant at an oil-sands site.

Niko Resources Ltd., which produces oil and gas in South Asia, surged 5.5 percent to C$57.36 after signing a contract with Diamond Offshore Drilling Inc. to explore offshore Indonesia.

Base-metals companies in the S&P/TSX advanced to the highest intraday since Sept. 9. Teck increased 3.2 percent to C$40.41. First Quantum Minerals Ltd., the country’s second- biggest publicly traded copper producer, climbed 2.7 percent to C$22.68.

Gold stocks in the S&P/TSX retreated from the highest close since Sept. 21 as the metal erased its gains after Napolitano’s statement.                        

Goldcorp Inc., the world’s second-largest gold producer by market value, slipped 0.6 percent to C$53.97. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, decreased 1.1 percent to C$37.18. Minefinders Corp., which produces precious metals in Mexico, slumped 7.7 percent to C$14.78 after reporting earnings that trailed the average analyst estimate in a Bloomberg survey.

China Gold International Resources Corp. gained 5.1 percent to C$3.51 after saying it may acquire a gold and copper mine in Central Asia as early as next month.

Construction company Aecon Group Inc. rallied 7.8 percent to C$9.91 after touching C$10.09, the highest intraday price since March 17. The company reported third-quarter profit that beat the average analyst estimate in a Bloomberg survey by 33 percent, excluding certain items.

US

By Rita Nazareth

Nov. 8 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a second day, as Prime Minister Silvio Berlusconi’s offer to resign boosted optimism Italy will appoint a new leader who can tame the debt crisis.

All 10 groups in the S&P 500 advanced as financial, energy and technology companies rallied at least 1.1 percent. JPMorgan Chase & Co., Occidental Petroleum Corp. and Intel Corp. added more than 1.9 percent. A gauge of homebuilders in S&P indexes jumped 3.8 percent as Toll Brothers Inc. gained 7.4 percent after the luxury-home builder said revenue increased.

The S&P 500 climbed 1.2 percent to 1,275.92 as of 4 p.m. New York time, after falling as much as 0.5 percent earlier today. The benchmark gauge of American equities has increased 1.8 percent in two days. The Dow Jones Industrial Average advanced 101.79 points, or 0.8 percent, to 12,170.18 today.

 “Berlusconi is a bit of a cartoon character with respect to world leaders,” Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “There’s a handful of adults in Europe who are working very hard. The market has a clear view that Berlusconi is not helpful with what Europe needs moving into the future. He is part of the problem, not the solution.”

President Giorgio Napolitano said Berlusconi has agreed to quit after the parliament approves the country’s austerity plans next week. The government has yet to present the final text of the amendment to the budget law with the austerity measures.

Berlusconi’s resignation came after he failed to muster an absolute majority on a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber of Deputies today.                       

“The reality is Berlusconi is not effective and he needs to go,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “It seems to me that any rational prime minister would realize that he shouldn’t be prime minister of Italy anymore.”

Greece prepared for a new prime minister to lead an interim government of national unity as state-run NET TV and To Vima newspaper reported that former central banker Lucas Papademos will accept the post. Prime Minister George Papandreou said a Greek national unity government will be named “soon” and told his ministers to get ready to resign, spokesman Elias Mosialos said today in Athens.

Stocks rose yesterday as the European Central Bank’s Juergen Stark said the region’s debt crisis will be under control in two years. Benchmark gauges dropped last week amid concern Europe’s crisis was worsening as the Group of 20 nations failed to agree on increasing the International Monetary Fund’s resources to fight the crisis.

The KBW Bank Index rose 2.4 percent, reversing an earlier loss of as much as 0.1 percent. The Morgan Stanley Cyclical Index added 1.2 percent on speculation that steps taken by European leaders to solve their debt crisis will avert a global recession. The Dow Jones Transportation Average of 20 stocks gained 1.2 percent. JPMorgan advanced 2.3 percent to $35.02.

Occidental Petroleum climbed 2.8 percent to $101.29. Intel rose 1.9 percent to $24.75.

Toll Brothers gained 7.4 percent to $19.43, the highest level since August. Homebuilding revenue for the three months ended Oct. 31 rose to $427.7 million from $402.6 million a year earlier, the Horsham, Pennsylvania-based company said today in a statement. Analysts expected Toll to have revenue of $414.2 million, the average of 15 estimates in a Bloomberg survey.

Priceline.com Inc. surged 8.6 percent, the most in the S&P 500, to $552.85. The biggest U.S. online travel agency reported third-quarter profit and sales topped analyst estimates.

Excluding some costs, profit was $9.95 a share, compared with the $9.30 average of 20 analyst estimates compiled by Bloomberg.

Rockwell Automation Inc. jumped 6.5 percent to $74.33 after the maker of factory-automation software projected 2012 sales growth that may exceed analysts’ estimates on demand from automobile, food and beverage producers.

DryShips Inc. advanced 9.9 percent to $2.99. The Greek owner of deep-water drilling rigs and vessels that haul iron ore and coal reported third-quarter earnings excluding some items of 16 cents a share, beating the average analyst estimate by 13 percent.

 Activision Blizzard Inc. added 1.4 percent to $13.93. The world’s largest video-game maker released its eighth “Call of Duty” game, “Modern Warfare 3.” The game may sell as many as 6 million copies in the first day, according to Arvind Bhatia, an analyst at Sterne Agee & Leach Inc.                          

After the close of regular trading, the company reported profit that beat analysts’ estimates and raised its full-year forecast, citing new titles including the new “Call of Duty.”

The S&P 500’s failure to keep pace with record corporate earnings may signal the benchmark equity gauge will surge if it returns to its historical relationship with profits.

Four years ago, when the S&P 500 lagged behind trailing 12- month corporate profits, the measure went on to reach an all- time high of 1,565.15. While combined earnings by companies in the index have exceeded the previous peak reached in 2007, the measure itself is 19 percent below that October 2007 record.

Companies have “increased efficiency, productivity and profit margins,” said David Goerz, the chief investment officer at Highmark Capital Management Inc., in a telephone interview yesterday. “That’s resulted in strong performances at a time when investors are very skeptical about the future. It’s not surprising that the market would be trading at a significant discount.” He said, “There’s a lot of upside for the U.S. equity market.”

Russell indexes started updating following an hour-and-a- half outage after Nasdaq OMX Group Inc. resolved a problem.

Measures such as the Russell 2000 Index and Russell 1000 Index resumed updating at 11:04 a.m. New York time, according to data compiled by Bloomberg and a notice on Nasdaq OMX’s website.

Have a wonderful evening everyone!

Be magnificent!

The end to be sought is human happiness combined with full mental and moral growth.

This end can be achieved under decentralization.

Centralization as a system is inconsistent with a non-violent structure of society.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

You can’t say civilization don’t advance, however,

for in every war they kill you a new way.

                      -Will Rogers, 1879-1935

 

 

Dear Friends,

Tangents:

 

Birthday: Joni Mitchell, b. November 7^th, 1943

…Don’t it always seem to go

That you don’t know what you’ve got

‘Til it’s gone

They paved paradise

To put up a parking lot…

           ~Joni Mitchell, Big Yellow Taxi

Photo of the day

November 7, 2011

A Kenyan man smiles as he holds a yellow balloon handed out as part of an art project by American artist Yazmany Arboleda in Nairobi, Kenya. Thousands of yellow balloons are floating above commuters in downtown Nairobi, in the third in a series of seven art projects around the world known as ‘Monday Morning.’ Khalil Senosi/AP.

Market Commentary:

Canada

By Matt Walcoff

Nov. 7 (Bloomberg) — Canadian stocks rose after a decline last week as gold producers gained amid political turmoil in Greece and Italy.

Goldcorp Inc., the world’s second-biggest gold producer by market value, increased 3.6 percent as the metal advanced to a six-week high. Cameco Corp., the world’s largest uranium producer, fell 6.5 percent after its third-quarter profit missed the average analyst estimate in a Bloomberg survey.

The Standard & Poor’s/TSX Composite Index climbed 53.73 points, or 0.4 percent, to 12,461.98.

“The political environment is driving the stock market,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($984 million). “Gold has been around for thousands of years. When we have political instability, it’s been the safe haven.”

The index decreased 0.9 percent last week as financial stocks retreated while European officials debated the bailout of Greece and companies including Manulife Financial Corp. and Sun Life Financial Inc. reported earnings that trailed analysts’ average estimates. The S&P/TSX has slipped 7.3 percent this year through Nov. 4 after surging 50 percent the previous two years.

 The yield on Italian 10-year government bonds rose to a euro-era record today on concern Prime Minister Silvio Berlusconi’s government is collapsing.                    

Three members of Berlusconi’s party have defected to the opposition in the past week, and six others called for the prime minister to resign in a letter to newspaper Corriere della Sera. As many as 20 are ready to leave the coalition, Repubblica daily reported yesterday, without citing anyone.

Italian Interior Minister Roberto Maroni told a talk show yesterday he fears the coalition no longer commands a majority in parliament.

The S&P/TSX Gold Index advanced to the highest close since Sept. 21. Barrick Gold Corp., the world’s largest gold producer, gained 2.5 percent to C$53.54. Goldcorp climbed for a fifth day, increasing 3.6 percent to C$54.30. Silver Standard Resources Inc., which mines in Latin America, jumped 7.5 percent to C$21.03 as silver rose.

Cameco slumped 6.5 percent, the most since March 16, to C$20.35 after reporting third-quarter earnings that missed the average analyst estimate by 19 percent, excluding certain items. The company also cut its 2011 uranium-production forecast.                     

Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, decreased 5 percent to C$42.76. The shares soared 16 percent in the previous two sessions after the company topped analysts’ earnings estimates. Investors may have underestimated the effect of “special accounting” for some royalties in the company’s statement, David Risinger, an analyst at Morgan Stanley, said in a note to clients today.

Petrominerales Ltd., an oil and gas producer with operations in Colombia, fell for a sixth day, dropping 4.6 percent to C$22.97. Nathan Piper, an analyst at Royal Bank of Canada, cut his 12-month share-price estimate to C$46 from C$48, after the company missed third-quarter earnings estimates on Nov. 3.

Oil and gas explorer America’s Petrogas Inc. soared 19 percent to C$2.35 after Guy Gordon, an analyst at Byron Capital Markets, began coverage of the company with a “speculative buy” rating.                  

Gasfrac Energy Services Inc., an oilfield-services company, surged 17 percent, the most since February 2009, to C$8.22. The company’s third-quarter earnings doubled the average estimate among analysts in a Bloomberg survey, excluding certain items.

Canadian National Railway Co., the country’s largest railroad, rose 1.1 percent to C$80.61 after saying it will buy back as many as 5.65 million shares from a third-party seller by March 31.

The S&P/TSX Telecommunication Services Index advanced to the highest since May 2008 after BCE Inc. and Telus Corp. reported third-quarter profit that surpassed analysts’ average estimates on Nov. 3 and Nov. 4, respectively.

Rogers Communications Inc., Canada’s largest wireless carrier, increased 0.9 percent to C$38.09. Regional carrier Bell Aliant Inc. climbed 0.7 percent to C$27.65.

US

By Rita Nazareth

Nov. 7 (Bloomberg) — U.S. stocks rose, following the first weekly retreat in the Standard & Poor’s 500 Index since September, as the European Central Bank’s Juergen Stark said the region’s debt crisis will be under control in two years.

Home Depot Inc. and Hewlett-Packard Co. gained at least 2.6 percent for the biggest advances in the Dow Jones Industrial Average. Amgen Inc., the largest biotechnology company, jumped 5.9 percent after saying it is planning to buy back as much as $5 billion in shares. First Solar Inc., the world’s largest maker of thin-film solar panels, dropped 3.7 percent as two Chinese solar companies cut forecasts for shipments.

The S&P 500 advanced 0.6 percent to 1,261.12 at 4 p.m. New York time, recovering from an earlier decline of as much as 1 percent. The benchmark gauge slumped 2.5 percent last week. The Dow increased 85.15 points, or 0.7 percent, to 12,068.39 today.

“The Europeans are doing some heavy lifting,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $44 billion, said in a telephone interview. “The leadership has a good understanding of what needs to be done and they’ve set a goal for themselves. They are now going through the sausage-making process of crafting a solution.”

Italian 10-year borrowing costs surged to a euro-era record amid concern the region’s third-largest economy is struggling to manage its debt loads, while growth in Europe is faltering.

Investors are betting Prime Minister Silvio Berlusconi may be forced to resign if he fails to win majority support in tomorrow’s vote on the 2010 budget report.                     

Stark, a member of the ECB’s executive board, speaking at an event in Lucerne, Switzerland, said the debt crisis may be under control within two years to the point there will be “no need for further political actions.”

 “There’s maybe a sense that enough has been done in Europe,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $333 billion, said in a telephone interview. “It’s certainly not the cure, but it may calm down the market.”

Greek Prime Minister George Papandreou agreed yesterday to step down, paving the way for the creation of a new government to get international aid and avert a default. European finance chiefs met in Brussels today to work on a plan to raise the region’s bailout fund.

Stocks slumped on Oct. 31 and Nov. 1 as Papandreou announced his desire to hold a vote on a European Union bailout.

After rallying two straight days, the S&P 500 dropped on Nov. 4 as the Group of 20 nations failed to agree on increasing the International Monetary Fund’s resources to fight the crisis.

Some of the biggest companies rose today. Home Depot increased 2.6 percent to $37.34. Hewlett-Packard gained 3.4 percent to $27.88.

Amgen rallied 5.9 percent to $58.43. The stock repurchase plan, amounting to about 10 percent of the company, is part of a current $10 billion buyback program, Amgen said in a regulatory filing today. The drugmaker will raise debt to help fund it. The offer starts tomorrow at a range of $54 to $60 a share, and Amgen will have about $2 billion of net debt afterwards, said Mark Schoenebaum, an analyst with ISI Group.

Dish Network Corp., the second-largest U.S. satellite-TV provider, gained 5 percent to $24.66, after awarding a special dividend that allayed investors’ concerns the company will invest billions in a wireless network.

Jefferies Group Inc. added 1.4 percent to $12.24. The New York-based firm cut gross holdings in sovereign securities of Portugal, Italy, Ireland, Greece and Spain by almost 50 percent since last week’s close of trading, to show how easily it can reduce funds at risk. Jefferies slumped 18 percent last week as Egan-Jones Ratings Co. downgraded the firm’s debt, citing large “sovereign obligations” relative to equity.

Financial shares tumbled the most in the S&P 500 last week, losing 5.4 percent, on concern about potential losses from Europe and as MF Global Holdings Ltd. filed for bankruptcy protection after making bets on European sovereign debt. CME Group Inc. is reducing the initial margin required to back futures trades to ease the bulk transfer of accounts held by MF Global customers.

“The decision to roll back margin requirements is a positive,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said in an e-mail.

“Otherwise there would have been a tremendous amount of margin calls, which could have caused a good amount of selling in other markets to pay for the margin calls.”

 First Solar declined 3.7 percent to $47.74. Yingli Green Energy Holding Co. and Renesola Ltd. cut forecasts for shipments and wrote down inventory, the latest in a series of industry warnings. Solar companies around the world are cutting profit forecasts as plunging prices spurred on by a surge in Chinese manufacturing capacity crimps margins.

S&P 500 companies are poised to report the biggest annual sales increase on record even as analysts reduce their estimate for growth in 2012. Revenue in the benchmark gauge of American common equity will rise 11 percent to $1,052.42 a share in 2011, according to more than 10,000 forecasts compiled by Bloomberg.

Projections for next year have been cut 1 percent in the past month after 43 percent of S&P 500 companies from 3M Co. to Amazon.com Inc. missed third-quarter forecasts, the most since 2009, data show.

Bulls say record gains in sales mean the economy is doing well enough for equities to rally after price-earnings ratios fell 20 percent below the six-decade average. To bears, the deceleration in growth shows the European debt crisis is curbing the economy and that stocks will resume declines after the S&P 500 posted its biggest monthly rally since 1991.

“Everybody thinks the world’s coming to an end, but corporate America is doing great and it’s a function of good sales,” Eric Green, a Philadelphia-based fund manager at Penn Capital Management, which oversees about $6 billion, said in a telephone interview on Nov. 3. “It’s not unusual that you get these short-term slowdowns during panicky markets. The sales estimates coming down is a good thing because it allows to companies to meet or beat more easily.”

Have a wonderful evening everyone.

Be magnificent!

 

To slight a single human being is to slight those divine powers

and thus harm not only that being but with him the whole world.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Keep calm and carry on.

     -King George VI, 1895-1952

     advice to his countrymen during World War II

 

Dear Friends,

Tangents:

I went with a friend to a “Lunch and Learn” today at a place on Fort Street,  The London Chef.  It is a wonderful experience whereby you learn to make certain dishes, orchestrated by chef and co-owner of  The London Chef, Dan Hayes.  We had southern Spanish inspired salad of poached octopus with mint, potatoes and olive oil to start, followed by risotto with fresh chanterelles and squash.  

A couple of  things I learned was that risotto is always stirred anti-clockwise so that, according to the Italians, love pours from the heart into the dish.  And you must always stir in the same direction.  Also, never cut chanterelles, you must rip them up.  Scoop the risotto onto the dish and then lift the dish and bang the bottom with your other hand to spread in on the plate.

Octopus was the starter because of Sandy Mayzell’s crie de coeur, Dancing with the Octopus….

Photo of the day:

People enjoy Autumn sunshine in Victoria Tower Gardens in London. Luke MacGregor/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 4 (Bloomberg) — Canadian stocks fell, completing a weekly drop, after the country reported a drop in jobs and the Group of 20 failed to agree on boosting the International Monetary Fund’s resources to fight Europe’s debt crisis.

Royal Bank of Canada, the country’s largest lender by assets, decreased 2.4 percent as the unemployment rate rose from a post-2008 low. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 1.3 percent as energy stocks retreated. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, gained 2.1 percent after an analyst at Toronto-Dominion Bank raised his share-price estimate.

The Standard & Poor’s/TSX Composite Index slipped 60.10 points, or 0.5 percent, to 12,408.25. The index extended its weekly decline to 0.9 percent.

“Nothing has changed — it’s all on Europe,” Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Financial Corp.’s money-management unit, said in a telephone interview from Toronto. The unit oversees $210 billion. “This risk of Europe is holding the markets back from an extension of the rally in October. Until we get greater clarity, we’ll still be trading in a range.”

 Financial companies led this week’s S&P/TSX declines as European officials debated the bailout of Greece and companies including Sun Life Financial Inc. reported earnings that trailed analysts’ estimates. Canada’s stock benchmark gauge is set to underperform the S&P 500 for the first year since 2003.                        

Canadian payrolls decreased by 54,000 jobs in October, Statistics Canada said today, in the biggest monthly decline since February 2009. Most economists in a Bloomberg survey had forecast a gain in employment and none estimated a loss of more than 20,000 positions. The unemployment rate climbed to 7.3 percent from 7.1 percent.

Royal Bank fell 2.4 percent to C$45.85 to complete its biggest weekly plunge since February 2009. Toronto-Dominion, Canada’s second-largest lender by assets, declined 1.3 percent to C$72.95. Manulife, the country’s biggest insurer, dropped 2.4 percent to C$12.79.

Mortgage insurer Genworth MI Canada Inc. jumped 7.4 percent, the most since it began trading in July 2009, to C$23.70 after raising its quarterly dividend. The company also said it will pay a special dividend of 50 Canadian cents a share.

G-20 leaders meeting in Cannes, France, were unable to agree on a way to bolster the IMF’s ability to stop the spread of Europe’s debt crisis, German Chancellor Angela Merkel said.                         

The S&P/TSX Energy Index completed its first weekly drop since Sept. 23, ending the longest streak of weekly gains since May 2009. Canadian Natural lost 1.3 percent to C$37.73 after surging 9.3 percent yesterday. Suncor Energy Inc., the country’s largest oil and gas producer, decreased 0.9 percent to C$32.89.

Pacific Rubiales Energy Corp., which operates in Colombia, retreated 5.6 percent to C$21.65 after saying the country’s tax agency inspected its Bogota offices.

Open Range Energy Corp., a natural gas explorer, surged 18 percent from yesterday’s adjusted close to C$2.08 after the spinoff of Poseidon Concepts Corp. became effective. Poseidon, formerly Open Range’s services and supply business, advanced to C$11.52 after opening at C$11.20.

Exall Energy Corp., which explores for oil in Alberta, rallied 31 percent, the most since December 2008, to C$1.86 after reporting a new discovery.

First Quantum increased 2.1 percent to C$22.81, extending its three-day climb to 15 percent. Greg Barnes, an analyst at TD, raised his 12-month share-price estimate to C$29 from C$27, citing the potential of First Quantum’s Enterprise nickel project in Zambia.

Alamos Gold Inc., which mines in Mexico, dropped 5.3 percent to C$17.06 after its third-quarter earnings trailed the average analyst estimate in a Bloomberg survey.

DragonWave Inc., which makes wireless data products, jumped 42 percent, the most since May 2008, to C$5.14 after agreeing to buy Nokia Siemens Networks’ microwave-transport business for 15 million euros ($20.7 million) in cash and shares.

Westport Innovations Inc., which develops natural gas engine technologies, rose 6.4 percent to C$29.79 a day after CNBC’s Jim Cramer recommended the shares.

US

By Inyoung Hwang

Nov. 5 (Bloomberg) — U.S. stocks fell, driving the market to its first weekly drop since September, as Greece’s reluctance to accept another bailout and a disagreement over boosting the International Monetary Fund’s resources threatened Europe’s efforts to halt its debt crisis.

All 10 groups in the S&P 500 fell this week as financial stocks plunged 5.4 percent. Jefferies Group Inc. retreated 18 percent amid concern about its investments in Europe while Bank of America Corp. and JPMorgan Chase & Co. dropped more than 7.4 percent. Abercrombie & Fitch Co. plunged 24 percent, its biggest loss in three years, after the teen-clothing retailer said sales fell at flagship stores in Europe last quarter.

The S&P 500 slid 2.5 percent to 1,253.23, the first weekly decline since the period ended Sept. 30. The benchmark equity index dropped 2.5 percent on Oct. 31, trimming the measure’s biggest monthly rally since 1991 to 11 percent. The Dow Jones Industrial Average retreated 247.87 points, or 2 percent, to 11,983.24 this week.

Stocks declined because of “the ping-pong match going on in Greece,” Chris Hyzy, the New York-based chief investment officer at U.S. Trust Co., which oversees about $360 billion, said in telephone interview. “Investors are very concerned about what that means for counterparty risk around the world and then ultimately how that factors into the broader economy and profits.”                      

Equities plunged worldwide on Oct. 31 and Nov. 1 after Greek Prime Minister George Papandreou scheduled a referendum on the European Union’s expanded rescue plan, spurring concern the deal will unravel. After rallying two straight days, the S&P 500 dropped yesterday when the G-20 disagreed on increasing the IMF’s resources, fueling pessimism European leaders won’t have enough aid to bail out indebted nations. Stocks had rallied throughout October on optimism the crisis would ebb.

After U.S. exchanges closed yesterday, Papandreou won a confidence vote in parliament. He will now attempt to shore up support for an international rescue after Greece’s main opposition party rejected his offer to form a new government.

The S&P 500 lost 0.6 percent yesterday even after the U.S. jobless rate fell to a six-month low of 9 percent. Economists projected the figure would remain at 9.1 percent, according to the median projection in a Bloomberg survey. Payrolls increased by 80,000 in October, missing the economist forecast of 95,000, following gains in the prior two months that were revised up by 102,000, U.S. Labor Department figures showed.

“It’s a seesaw number,” Hyzy said of the payrolls figures. “Revisions being upward have muted the effect of it being below expectations.” He added: “Profits and payrolls are taking the backseat to the third P, which is policy” from governments in the U.S. and Europe.

Per-share earnings beat estimates at about three-quarters of the companies in the S&P 500 that released results since Oct. 11, data compiled by Bloomberg show. Profit grew 16 percent for the group on an 11 percent increase in sales.

The S&P 500 advanced 3.5 percent on Nov. 2 and Nov. 3 after the Federal Reserve said it’s prepared to take action if needed to safeguard the economic recovery and the European Central Bank unexpectedly lowered interest rates.

Financial shares tumbled the most in the S&P 500 this week, losing 5.4 percent, on continued concern about potential losses from Europe.                 

Jefferies dropped 18 percent to $12.07. Egan-Jones Ratings Co. downgraded the investment bank’s debt, citing large “sovereign obligations” relative to equity. The shares added 0.5 percent yesterday after Jefferies said it will increase disclosure of European holdings to counter investor concern the assets could hobble the firm.

MF Global Holdings Ltd. was delisted from the New York Stock Exchange after the futures brokerage filed for bankruptcy on Oct. 31. The company collapsed after revealing a $6.3 billion bet on Italian, Spanish, Belgian, Portuguese and Irish debt, which led to credit downgrades, margin calls and regulators’ demands to boost capital. Its stock fell 79 percent to 26 cents in over-the-counter trading.

Bank of America fell 12 percent to $6.49 and JPMorgan declined 7.4 percent to $33.97, leading this week’s losses in the Dow average.

Raw-material and energy in the S&P 500 companies declined 2.7 percent and 2.5 percent, respectively. Alcoa Inc., the largest U.S. aluminum producer, slumped 5.5 percent to $10.93.

Exxon Mobil Corp., the energy producer that is the world’s most valuable company by market value, lost 3.6 percent to $78.52.

Abercrombie & Fitch had the biggest drop in the S&P 500, falling 24 percent to $58.21. The clothing retailer said it was hurt by a “slowing trend” in Europe and that same-store sales in Japan and Canada continued to decline.

MEMC Electronic Materials Inc. fell 22 percent to $5.19. The second-largest U.S. maker of polysilicon lowered its earnings outlook for this year because of an oversupply of the material used in solar panels.

Suntech Power Holdings Co., the biggest maker of silicon- based solar modules, retreated 11 percent to $2.74. It may reduce manufacturing output in the first quarter because of a seasonal dip in demand. First Solar Inc. slumped 8.2 percent to $49.59.

Have a wonderful weekend everyone.

Be magnificent!

Propaganda can never tell the truth; truth can never be propagated.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

Man’s loneliness is but

his fear of life.

-Eugene O’Neill, 1888-1953

 

Dear Friends,

Tangents:

-from Globe Life:

Go easy on yourself

From a Daily Beast review of 30 Lessons for  Living: Tried and True Advice from the Wisest Americans, by gerontologist Karl Pillemer:  “If you don’t get it right the first time, don’t wallow in regrets.  Make like the legendary Kitty Carlisle Hart, who adhered to a daily ritual.   As soon as she woke up, she looked squarely into the mirror and said out loud: ‘Kitty, I forgive you.’  She lived to be 96.”

 

Photo of the day 

November 3, 2011

Saint Peter’s Basilica is pictured in front of the moon in Rome , Italy. Alessandro Bianchi/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 3 (Bloomberg) — Canadian stocks rose for a second day after Greece halted a vote on its bailout, the European Central Bank cut its main interest rate and profit at companies including Canadian Natural Resources Ltd. beat estimates.

Canadian Natural, Canada’s second-biggest energy company by market value, jumped 9.3 percent as crude oil and natural gas climbed. Valeant Pharmaceuticals International Inc., the country’s largest drugmaker, rallied 13 percent after its third- quarter profit excluding certain items surpassed the average analyst estimate by 15 percent. Yamana Gold Inc., Canada’s fourth-biggest gold producer by market value, gained 4.4 percent after raising its dividend.

 The Standard & Poor’s/TSX Composite Index increased 226.59 points, or 1.9 percent, to 12,468.35.

“The earnings are good — not phenomenal, but good,” Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($198 million). “And any time you bring down interest rates to the low levels there are, any risk assets become a lot more attractive.”

The index had slipped this week after surging 5.4 percent in October as Greek Prime Minister George Papandreou said he will subject his country’s bailout plan to a referendum. The S&P/TSX is set to underperform the S&P 500 for the first year since 2003 as energy stocks have declined on concern the global economy will slow. Canada is the world’s sixth-largest oil producer, according to the U.S. Energy Department.                         

The ECB lowered its main refinancing rate to 1.25 percent from 1.5 percent. Among 55 economists in a Bloomberg News survey, six had forecast a cut. Stocks extended their gains today after Greek Finance Minister Evangelos Venizelos said the country won’t hold the referendum.

Crude oil advanced to a three-month high and natural gas climbed for the first time in three days on the New York Mercantile Exchange. PetroBakken Energy Ltd., a western Canadian energy producer, increased 7.6 percent to C$9.20.

Canadian Natural gained 9.3 percent to C$38.23 after reporting third-quarter earnings that beat the average estimate of analysts in a Bloomberg survey by 19 percent, excluding certain items. Suncor Energy Inc., the country’s largest oil and gas producer, rose 4.4 percent to C$33.20 after its profit excluding certain items topped the average analyst estimate by 39 percent.

Valeant surged 13 percent, the most since January, to C$44.08. SXC Health Solutions Corp., a pharmacy-benefits manager, jumped 6 percent to C$47.99 after beating the average analyst estimate for third-quarter adjusted earnings by 2.3 percent and raising its 2011 forecasts for earnings and revenue.                     

Dundee Precious Metals Inc., which operates in Bulgaria and Armenia, rallied 12 percent, the most since October 2009, to C$8.91 after surpassing its average profit estimate by 24 percent, excluding certain items.

Among companies that missed analysts’ earnings estimates, Sun Life Financial Inc., Canada’s third-largest insurer, fell 4.8 percent to C$22.85, the lowest in 31 months, after reporting its first quarterly loss in two years. Manitoba Telecom Services Inc., a Winnipeg, Manitoba-based phone company, sank 7.2 percent, the most since August 2010, to C$30.37 after missing the average forecast by 10 percent.

Industrial Alliance Insurance and Financial Services Inc.  lost 6.8 percent to C$26.80, the lowest since July 2009, after analysts at BMO, Canaccord Financial Inc. and National Bank of Canada cut their ratings on the company. The shares plunged 11 percent yesterday after the insurer’s earnings missed the average analyst estimate by 31 percent, excluding certain items.                          

 Gold stocks in the S&P/TSX climbed as the metal advanced to a six-week high after the ECB decision.

Barrick Gold Corp., the world’s largest company in the industry, increased 2.4 percent to C$52.40. Yamana Gold rose 4.4 percent to C$16.28 after boosting its quarterly dividend 11 percent. Lake Shore Gold Corp., which mines in Ontario, soared 16 percent to C$1.89.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, rallied 9 percent to C$22.35.

The company’s Enterprise nickel project in Zambia may produce 40,000 to 70,000 metric tons a year, First Quantum said in a statement today.

Most financial companies other than Sun Life and Industrial Alliance gained. Bank of Nova Scotia, Canada’s third-largest lender by assets, advanced 1.9 percent to C$52.93. Bank of Montreal, the No. 4 lender, increased 1.1 percent to C$58.70.

Manulife Financial Corp., North America’s fourth-largest insurer, surged 4.5 percent to C$13.11.

US

By Rita Nazareth

Nov. 3 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as Greece moved closer to accepting a bailout and the European Central Bank unexpectedly lowered interest rates.

Qualcomm Inc. jumped 7.5 percent as the biggest maker of mobile-phone chips forecast sales that beat analysts’ projections. Kraft Foods Inc. added 3.3 percent after raising its earnings estimate. Estee Lauder Cos. jumped 18 percent after the maker of Clinique skin care raised its profit forecast, boosted its dividend and set plans for a stock split.

The S&P 500 climbed 1.9 percent to 1,261.15 at 4 p.m. in New York, extending its two-day gain to 3.5 percent and erasing its 2011 decline. The Dow Jones Industrial Average increased 208.43 points, or 1.8 percent, to 12,044.47 today.

“They’re pushing the Greeks to the wall,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion of assets, said in a telephone interview. “It’s a sobering up moment. On top of that, the ECB’s decision to cut rates will take some of the pressure off of the upcoming financing for the Spanish and Italian markets.”

Stocks tumbled earlier this week as Greek Prime Minister George Papandreou announced on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact. A two-day slump sent the S&P 500 to the level where three rallies stopped in August and September, the top of a price range that prevailed for 10 weeks. The index rose above that level last week amid progress on Europe’s bailout plans.

Greek Finance Minister Evangelos Venizelos, speaking to party lawmakers in Parliament in Athens today, said the nation won’t hold a referendum. Just hours after saying Greeks need to decide on whether their future is in the euro, Papandreou said the country belongs in the currency bloc.

     “Papandreou absolutely blinked in this game of chicken,”

Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “The interesting thing is that it took him so long to blink. The world’s markets told him he was wrong and he still persisted for an extended period of time. It was insane.”

Global stocks also rose as ECB officials unanimously lowered the benchmark interest rate by 25 basis points to 1.25 percent, confounding 51 of 55 economists in a Bloomberg News survey. ECB President Mario Draghi said the rate cut happened partly because “what we’re observing now is slow growth heading toward a mild recession.”                       

Earlier today, benchmark gauges erased a rally as a report showed that service industries in the U.S. expanded at a slower pace and consumer confidence plunged, supporting Federal Reserve Chairman Ben S. Bernanke’s forecast yesterday that the economic recovery will be “frustratingly slow.”

A Labor Department report today showed first-time claims for unemployment benefits declined last week to a one-month low of 397,000. Employment probably cooled in October, indicating the U.S. recovery remains too weak, economists said before a report tomorrow. Payrolls climbed by 95,000 workers after a 103,000 September increase, according to the median forecast of economists surveyed by Bloomberg News.

All 10 groups in the S&P 500 rallied as energy and industrial shares had the biggest gains, adding at least 2.4 percent. Gauges of utility, health care and consumer staples companies advanced less than the benchmark gauge.

Optimism about corporate earnings also helped send stocks higher. About three quarters of the S&P 500 companies that reported results since Oct. 11 beat analysts’ projections, according to data compiled by Bloomberg.                         

Qualcomm jumped 7.5 percent to $56.11. The company, which gets most of its profit from licenses on technology used in so- called 3G phones, is benefiting as more consumers switch to the technology — especially in developing countries.

Kraft added 3.3 percent to $35.78. Food companies such as Kraft, Sara Lee Corp. and General Mills Inc. have raised prices on many products this year to make up for higher costs for ingredients such as corn, coffee and sugar.

Estee Lauder jumped 18 percent, the biggest advance in the S&P 500, to $118.92. The company said it will split its common stock 2-for-1 in January, and raise the annual dividend to $1.05 a share. Sales in the fiscal first quarter gained 18 percent, helped by stronger demand in all of the company’s markets and a weaker U.S. dollar that aided results overseas.

DirecTV climbed 6.2 percent to $47.63. The largest U.S. satellite-television provider reported a 7.7 percent increase in third-quarter profit after a football promotion helped it gain U.S. subscribers.

Jefferies Group Inc. lost 2.1 percent to $12.01, paring an earlier decline as it said it has no “meaningful net exposure” to European sovereign debt. Its shares plunged as much as 20 percent, triggering stock-market circuit breakers. Egan-Jones Ratings Co. cut the firm’s credit grade, citing a “changed environment” after the collapse of MF Global Holdings Ltd. and concern that Jefferies’s $2.7 billion in “sovereign obligations” on Aug. 31 is large relative to equity.

Abercrombie & Fitch Co. tumbled 20 percent, the most in the S&P 500, to $59.26. The New Albany, Ohio-based teen-clothing retailer reported a slowing trend for same-store sales in Europe, including flagship stores that had declines. Japan and Canada same-store sales also dropped.

The S&P 500 is caught in a “battle” between technical measures sending conflicting signals on whether stocks will rise or fall, Janney Montgomery Scott LLC said.

 The biggest monthly rally since 1991 failed to keep the benchmark measure of U.S. equities above its 200-day average, according to data compiled by Bloomberg. At the same time, its 50-day average began rising for the first time since June. The index closed at 1,237.90 yesterday, 2.8 percent below its 200- day level and 3.8 percent above the 50-day figure.

The charts “underscore the battle we’re seeing between the market’s longer-term declining moving averages and its short- term rising moving averages,” Dan Wantrobski, the Philadelphia- based director of technical research at Janney, wrote in a report yesterday. “Due to the close proximity the price action of each benchmark now shares with these indicators, we will likely have an answer soon.”

Have a wonderful evening everyone.

Be magnificent!

The supreme consideration is man.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Generosity is giving more than you can,

and pride is taking less than you need.

                 -Kahlil Gibran, 1883-1931 

 

Dear Friends,

Tangents:

DAY OF THE DEAD (Dia de los Muertos), November 2^nd:

The spirit lives on….love never dies.

Photo of the day 

November 2, 2011

A woman with a ‘Calavera’, or skull, painted on her face takes part in a Day of the Dead celebration in Mexico City. Each year, Mexicans observe the holiday by gathering together to remember deceased relatives and friends. Jorge Silva/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 2 (Bloomberg) — Canadian stocks rose for the first time in three days as energy and financial shares gained after European leaders moved to prevent their debt-crisis strategy from unraveling.

Suncor Energy Inc. increased 1.6 percent as crude oil climbed for the first time in four days after Greek Prime Minister George Papandreou was summoned to a Group of 20 meeting to hear there is no alternative to budget cuts. Bank of Nova Scotia, the country’s third-largest lender by assets, advanced 1.6 percent. Barrick Gold Corp., the world’s largest producer of the metal, gained 1.8 percent as the U.S. Dollar Index declined from a three-week high.

The Standard & Poor’s/TSX Composite Index rose 84.48 points, or 0.7 percent, to 12,199.58 at 2:15 p.m. Toronto time.

The index fell 3.2 percent over the past two days as Papandreou said he will subject his country’s bailout plan to a referendum.

“The shock and awe from the Greek decision to do a referendum had its moment in the sun, and now the market has digested that and is looking beyond it,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees about C$250 million ($246 million). “We’re in the final throes here of a resolution.”

 The S&P/TSX dropped 15 percent from April 5 to yesterday as base metals and financial shares declined in part on concern Europe’s debt crisis will weaken the global economy. Energy, raw-materials and financial companies make up 76 percent of Canadian stocks by market value, according to Bloomberg data.

Parandreou, whose country is not a G-20 member, will attend the group’s meeting that begins in Cannes, France, tomorrow.

Among the other leaders in attendance will be French President Nicolas Sarkozy, who said yesterday the bailout strategy crafted last week is the “only way to resolve Greek debt problems.”

Canada’s benchmark stock gauge gained as much as 1.7 percent today before the U.S. Federal Open Market Committee released a policy statement that didn’t include a new round of asset purchases.

The S&P/TSX Energy Index rebounded from the lowest close since Oct. 20. Suncor climbed 1.6 percent to C$31.42. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, rose 1.9 percent to C$34.64.

Western Canadian oil and gas producer Trilogy Energy Corp. surged 5.6 percent to C$34.63 after at least five analysts raised their share-price estimates.

Bank of Montreal’s Gordon Tait, who increased his estimate to C$36 from C$30, cited “continued positive results” from the company’s operations in the Kaybob area of Alberta and the “increasing potential” of its Duvernay shale-gas development.

Enerflex Ltd., which provides products and services to the energy industry, jumped 6.4 percent to C$10.67 after saying it won a contract worth about $228 million for a gas-processing plant in Oman.

Gold stocks in the S&P/TSX advanced to the highest intraday since Sept. 23. Barrick increased 1.8 percent to C$51.21.

Goldcorp Inc., the world’s second-biggest company in the industry by market value, climbed 1.9 percent to C$50.90.

NovaGold Resources Inc., which is developing gold and base- metals properties in Alaska and British Columbia, gained 1.6 percent to C$9.55.

Wesdome Gold Mines Ltd., which operates in Ontario, tumbled 19 percent, the most intraday since 2008, to C$2.10 after saying third-quarter production and sales trailed its forecasts.                          

The S&P/TSX Diversified Metals & Mining Index rose. Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 1.8 percent to C$38.65. First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, advanced 4.4 percent to C$20.73. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, rallied 3.1 percent to C$21.04.

Potash Corp. of Saskatchewan Inc. rebounded 1.6 percent to C$47.31 after sinking 7.7 percent in the previous three days.

Potash prices will rise next year due to low inventories and historically high corn futures, P.J. Juvekar, an analyst at Citigroup Inc., wrote in a note to clients.

 Financial companies in the S&P/TSX climbed for the first time in four days. Scotiabank advanced 1.6 percent to C$51.97.

Toronto-Dominion Bank, the country’s second-largest lender by assets, rose 0.7 percent to C$73.33. Brookfield Asset Management Inc., Canada’s biggest real-estate company, gained 2.3 percent to C$29.06.

Industrial Alliance Insurance and Financial Services Inc. sank 6.6 percent to C$29.39 after reporting third-quarter earnings that trailed the average analyst estimate in a Bloomberg survey by 31 percent, excluding certain items. The shares earlier plunged as much as 8.4 percent, the most intraday since December 2009.

US

By Rita Nazareth

Nov. 2 (Bloomberg) — U.S. stocks advanced, rebounding from a two-day drop in the Standard & Poor’s 500 Index, as the Federal Reserve said economic growth strengthened and it is prepared to take action if needed to safeguard the recovery.

Gauges of commodity and financial shares had the biggest gains in the S&P 500 among 10 industries, rising at least 2.2 percent. Bank of America Corp., Chevron Corp. and Alcoa Inc. rallied more than 2.4 percent. MasterCard Inc. jumped 7 percent as profit beat analysts’ estimates. MF Global Holdings Ltd. tumbled 79 percent in its first day of over-the-counter trading after the futures brokerage filed for bankruptcy, prompting the New York Stock Exchange to delist the shares. The S&P 500 increased 1.6 percent to 1,237.90 as of 4 p.m.

New York time. The benchmark gauge for American equities fell 5.2 percent over the previous two days. The Dow Jones Industrial Average added 178.08 points, or 1.5 percent, to 11,836.04 today.

“People are focused on two comments — the economy has firmed and the Fed stands ready to take action,” Mark Bronzo, who helps manage $24 billion at Security Global Investors in Irvington, New York, said in a telephone interview. “In addition, the fact that they are not taking action now makes you more comfortable that the economy is doing OK.”

The Federal Open Market Committee said “economic growth strengthened somewhat in the third quarter,” while also saying “significant downside risks” remain to the outlook. Stocks extended gains as Fed Chairman Ben S. Bernanke said additional purchases of mortgage-backed securities are a “viable option” if the state of the economy warrants further easing.                      

Fed officials lowered their outlook for U.S. economic growth in 2012 and forecast that unemployment will average from 8.5 percent to 8.7 percent in the final three months of next year. Forecasts for 2012 growth in U.S. gross domestic product from the five Fed Board members and 12 reserve bank presidents centered around 2.5 percent to 2.9 percent, measured from the fourth quarter of this year to the fourth quarter of next year.

For this year, the central tendency forecast for U.S. growth was 1.6 percent to 1.7 percent.

“They are going with no rocking of the boat as long as the improvement continues,” Bruce McCain, who helps oversee about $20 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland, said in a telephone interview. “There’s a lot more concern at this point that the Fed would try too hard to juice up things and perhaps complicate an inflation picture that clearly is becoming better. The Fed wants to have as much powder dry as they can simply because if Europe blows up they want to have something in reserve.”

Benchmark gauges rebounded after the biggest two-day drop in almost a month on concern Europe’s crisis was worsening.

Greek Prime Minister George Papandreou triggered the latest upheaval in the two-year-long crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact.

Papandreou, his hold on power weakening, was summoned to Cannes, France, for emergency talks on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the “only way to resolve Greek debt problems” is through a deal hammered out in a six-day crisis-management marathon. German Chancellor Angela Merkel said today that policy makers “must bring calm to the euro.”

 The Morgan Stanley Cyclical Index climbed 1.8 percent on expectations the economy will be able to avoid a recession. The Dow Jones Transportation Average gained 1.3 percent. The KBW Bank Index increased 3.3 percent. Bank of America added 5 percent to $6.72. Alcoa jumped 3.2 percent to $10.70. Chevron rose 2.4 percent to $104.54.                    

MasterCard gained 7 percent to $357.66. Chief Executive Officer Ajay Banga, 51, is pushing to wrest market share from larger rival Visa Inc. New U.S. regulations on transaction fees charged to merchants for debit-card purchases also give retailers more say on how those transactions are routed, which may erode Visa’s dominance.

Phone stocks gained after the U.S. House voted to bar new state and local taxes on wireless services. Sprint Nextel Corp. climbed 9.2 percent to $2.72. AT&T Inc. increased 1.3 percent to $29.08.

AOL Inc. rallied 13 percent to $15.02. The Internet company that’s struggling to halt a sales slide reported third-quarter earnings that exceeded analysts’ estimates by 65 percent.

MF Global, quoted under the symbol “MFGLQ,” tumbled 79 percent to 25 cents, in its first day of over-the-counter trading after the futures brokerage filed for bankruptcy, prompting the New York Stock Exchange to delist the shares.

 The stock hasn’t changed hands during a regular trading session since Oct. 28. NYSE Euronext suspended the stock before the New York Stock Exchange opened on Oct. 31. MF Global filed the eighth-largest U.S. bankruptcy this week after failing to find a buyer over the weekend. The futures broker suffered a ratings downgrade and loss of customers after revealing it had investments related to $6.3 billion in European sovereign debt.

Whether the U.S. economy falls into a recession or expands more slowly matters little when it comes to stock-market strategy, according to Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC.

Playing defense has been more rewarding in the past six months than investing in shares of cyclical companies, which are more susceptible to changes in the pace of economic expansion.

Makers of food, beverages, tobacco and other consumer staples are in the defensive category, along with health-care, telephone and utility stocks.

“Investors seem to spend too much time trying to ascertain the probability of a recession occurring,” Bernstein wrote in a report two days ago. A slowdown is enough to justify defensive strategies, favoring shares of companies whose sales and earnings growth is relatively stable, the report said.

Have a wonderful evening everyone.

Be magnificent!

That economics is untrue which ignores or disregards moral values.

The extension of the law of nonviolence in the domain of economics means nothing less

than the introduction of moral values as a factor to be considered with regulating international commerce.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Sorrow and silence are strong, and

patient endurance is godlike.

-Henry Wadsworth Longfellow, 1807-1882 

 

 

Dear Friends,

 Tangents:

 We were in Seattle on Saturday to see the opera Carmen and stopped by the Friesen Gallery earlier in the day.  We had a wonderful conversation with Andria Friesen; I was telling her about an article I had read in the FT that morning on William Aquavella, an art dealer in NYC, who represented and was friends with the artist Lucian Freud.   She said she was going to the shows this year in NYC and was going to visit him. 

When we arrived back at the hotel after the opera, there was a book from her which I had a chance to look through last night.  It is her compilation of art and poetry about trees, entitled Speak for the Trees. 

This is from that book and accompanies a photograph of a beautiful painting by Forrest Moses, October Memories.

              I love this decaying autumn

Yellow leaves tumble in wind and rain

Spots of white sway over rivers and lakes

You cannot get to those rivers and lakes

        It is hard labor to transplant trees

Silently a pair of wild ducks come flying

                   All this becomes a painting.

                                      -Su Tung-Po

Photo of the day 

November 1, 2011

A man walks through the Oakland section of Pittsburgh. With temperatures in the 30’s and high humidity a thick fog shrouded the Pittsburgh area, making rush hour slow going. Gene J. Puskar/AP

Market Commentary:

Canada

By Matt Walcoff

Nov. 1 (Bloomberg) — Canadian stocks fell a second day after a Chinese factory index dropped and concern mounted that Greek politics will make it harder for the country to avoid default.

Royal Bank of Canada, the country’s biggest lender by assets, retreated 3.3 percent as financial stocks fell for a third day. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.6 percent as crude futures decreased the most intraday in a month. Teck Resources Ltd., the country’s biggest base-metals and coal producer, slumped 4.7 percent after China’s Purchasing Managers’ Index trailed all 16 economist forecasts in a Bloomberg survey.

The Standard & Poor’s/TSX Composite Index dropped 136.96 points, or 1.1 percent, to 12,115.10 after the biggest drop in almost a month yesterday.

“The debt crisis appears to be widening,” Robert McWhirter, a money manager at Selective Asset Management Inc. in Toronto, said in a telephone interview. McWhirter oversees about C$140 million ($138 million). “It has always been, ‘Let’s try to get Greece fixed up and put a firewall around the other countries.’ People seem to be having doubts that is going to be the case.”

The S&P/TSX increased 5.4 percent in October, the biggest monthly gain since May 2009, after seven straight months of losses. Crude oil surged 18 percent and copper advanced 15 percent as European leaders reached an agreement intended to prevent the continent’s sovereign debt crisis from weakening banks and the economy. Energy and raw-material companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

 The China Federation of Logistics and Purchasing’s manufacturing index declined to 50.4, the lowest in almost three years, from 51.2 in September. Readings above 50 signal expansion.

Six members of Greek Prime Minister George Papandreou’s party urged him to resign in a letter after he called for a referendum on a new bailout package. Papandreou faces a confidence vote Nov. 4.

Stocks pared their losses after Dow Jones Newswires reported that a member of Papandreou’s Socialist Party said the referendum plan was “basically dead.” Angelos Tolkas, a spokesman for the Greek government, later told NET TV Papandreou will proceed with plans for the vote. All eight S&P/TSX banks retreated at least 1.7 percent.

Royal Bank decreased 3.3 percent to C$47.04. Toronto-Dominion Bank, its largest domestic rival, slipped 3.1 percent to C$72.88. Manulife Financial Corp., North America’s fourth- largest insurer, slumped 5.6 percent to C$12.42.

Crude oil retreated and natural gas tumbled the most since Sept. 15 on the New York Mercantile Exchange. Suncor decreased 2.6 percent to C$30.92. Encana Corp., the country’s largest natural gas producer, fell 4.2 percent to C$20.71. Bankers Petroleum Ltd., which operates in Albania, sank 6.2 percent to C$4.97. Base-metals and coal producers in the S&P/TSX dropped for a second day after jumping 21 percent last week.

Teck declined 4.7 percent to C$38.09. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, lost 5.6 percent to C$19.73. Mercator Minerals Ltd., which operates in Arizona, sank 12 percent to C$1.78. Uranium One Inc., a mining company controlled by Moscow-based ARMZ Uranium Holding, plunged 6.7 percent to C$2.80.

Gold stocks rallied as the U.S. Dollar Index retreated from the highest intraday level since Oct. 12 after the report casting doubt on Papandreou’s referendum proposal.

Goldcorp Inc., the world’s second-biggest company in the industry by market value, gained 3 percent to C$49.95. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, surged 8.6 percent to C$21.46. Jaguar Mining Inc., which operates in Brazil, soared 15 percent to C$5.93 after falling 9.2 percent yesterday.

Magna International Inc., Canada’s largest auto-parts maker, fell 5.3 percent to C$36 after General Motors Co. and Ford Motor Co. reported sales that trailed analysts’ average forecasts.

US

By Rita Nazareth

Nov. 1 (Bloomberg) — U.S. stocks dropped, driving the Standard & Poor’s 500 Index to the biggest two-day slump in a month, on concern that a Greece referendum pledged by Prime Minister George Papandreou may threaten Europe’s bailout.

All 10 groups in the S&P 500 fell as gauges of financial, energy and industrial shares lost at least 3 percent. Citigroup Inc. and Morgan Stanley retreated more than 7.6 percent, following a 6.2 percent tumble in European lenders. Exchange operators slumped after U.S. lawmakers said they will propose a tax on financial transactions such as stock and bond trades.

The S&P 500 decreased 2.8 percent to 1,218.28 as of 4 p.m. New York time, extending its two-day retreat to 5.2 percent, the biggest drop since Oct. 3. The Dow Jones Industrial Average declined 297.05 points, or 2.5 percent, to 11,657.96 today.

“I just don’t get it,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “A Greek referendum is a very risky proposition. Everybody thought last week that this crisis was behind us on a near-term basis, but Europe is going to be front and center.”

Today’s decline followed the best monthly gain for the S&P 500 since 1991. The drop cut the index’s price to 12.8 times reported earnings, 22 percent below its five-decade average of 16.4, according to data compiled by Bloomberg. The index trades close to the level where three rallies stopped in August and September, the top of a price range that prevailed for 10 weeks.

Greece’s referendum poses a threat to financial stability in the euro region and increases the risk of a “disorderly” default, Fitch Ratings said. Stocks extended losses as government spokesman Angelos Tolkas said Papandreou will proceed with plans for a referendum on the Greek financing package.                        

Papandreou’s announcement threatens to overshadow a Nov. 3- 4 Group of 20 summit in Cannes, France. German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece today and called on Europe to implement the package of measures thrashed out in Brussels last week. The plan, designed to aid Greece and stem the wider debt crisis, is “more necessary than ever today,” they said in a joint statement issued in Berlin and Paris. “It’s frustrating,” David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview.

“The danger of having a referendum is that it could be defeated, in which case Greece presumably would end up defaulting on its debt. Europe is not addressing the basic problem. They are not giving the peripheral countries a way out of a recession.”                        

American banks tumbled following losses in European lenders. The KBW Bank Index slumped 4.9 percent as all of its 24 stocks retreated. Citigroup dropped 7.7 percent to $29.17. Morgan Stanley lost 8 percent to $16.23.

MF Global Holdings Ltd., which the New York Stock Exchange is delisting following the brokerage’s bankruptcy filing, will begin trading tomorrow on the over-the-counter venue run by OTC Markets Inc. MF Global shares haven’t changed hands during a regular trading session since Oct. 28, before yesterday’s Chapter 11 filing.

Stocks also fell after data showed a Chinese manufacturing index dropped to the lowest level since February 2009. In the U.S., manufacturing grew less than forecast in October, depressed by a drop in inventories that may set U.S. factories up for stronger growth heading into 2012.

The Morgan Stanley Cyclical Index lost 3.2 percent amid concern about an economic slowdown. The Dow Jones Transportation Average slid 2.6 percent. General Electric Co. retreated 4.1 percent to $16.02. Exxon Mobil Corp. slumped 2.8 percent to $75.94.

Exchange operators sank. Senator Tom Harkin, an Iowa Democrat, and Representative Peter DeFazio, an Oregon Democrat, said they will introduce bills tomorrow in their respective chambers to impose a transaction tax on financial firms. NYSE Euronext declined 6.8 percent to $24.76, while Nasdaq OMX Group Inc. fell 2.8 percent to $24.36. CME Group Inc. slumped 8.6 percent to $251.88.

MetroPCS Communications Inc. fell 9.9 percent, the most in the S&P 500, to $7.66. The pay-as-you-go U.S. wireless carrier reported third-quarter profit that missed analysts’ estimates as subscriber growth slowed for the second consecutive quarter.

Baker Hughes Inc. tumbled 7.7 percent to $53.54. The oilfield contractor reported third-quarter earnings excluding some items of $1.18 a share, missing the average analyst estimate by 3 percent, according to Bloomberg data.

Advanced Micro Devices Inc. sank 9.1 percent to $5.30. The Sunnyvale, California-based maker of chips for Apple Inc.’s computers failed to persuade a U.S. judge to halt a patent dispute S3 Graphics Co. has against Apple at the U.S. International Trade Commission, according to a filing with the trade agency.                      

 Volatility indexes are rising again after plunging in October. The benchmark European gauge rose the most in two days since May 2010. The VStoxx Index, which measures the cost of Euro Stoxx 50 Index options, rose 22 percent to 42.96, extending its two-day increase to 37 percent. The Chicago Board Options Exchange Volatility Index, or VIX, soared 16 percent to 34.77, bringing its two-day gain to 42 percent.

“The market doesn’t like unknowns, and the situation in Greece today was a definite unknown,” Stephen Solaka, who oversees about $50 million including options as co-founder of Belmont Capital Group in Los Angeles, said in a telephone interview. “Bad news is OK, as long as it’s known. Unknown news or surprises cause issues, cause sell-offs and fears to appear. Fear is back on the table.”

Have a wonderful evening everyone.

Be magnificent!

Non-possession is allied to non-stealing.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

We don’t see things as they are,

we see things as we are.

   -Anaïs Nin, 1903-1977

 

Dear Friends,

Tangents:  Happy Hallowe’en!

First Witch: When shall we three meet again?

In thunder, lightning, or in rain?

Second Witch: When the hurlyburly’s done,

When the battle’s lost and won.

Third Witch: That will be ere the set of sun.

First Witch: Where the place?

Second Witch: Upon the heath.

Third Witch: There to meet with Macbeth.

First Witch: I come, Greymalkin.

Second Witch: Paddock calls.

Third Witch: Anon!

All: Fair is foul, and foul is fair:

Hover through the fog and filthy air.

          -William Shakespeare,

                       Macbeth I.i.

 

Photos of the day

October 31, 2011

Co-hosts, from left, Meredith Vieira as Queen Elizabeth II; Hoda Kotb as Princess Eugenie; Kathie Lee Gifford as Princess Beatrice; Savannah Guthrie as Prince Charles; Al Roker as Prince Harry; Matt Lauer as Prince William; and Ann Curry as Kate Middleton are shown on the NBC “Today” television program’s annual Halloween show, in New York. Richard Drew/AP.

Candles illuminate a tomb on the eve of ‘All Saints Day,’ in the public cemetery, in Pamplona northern Spain. Alvaro Barrientos/AP.

Market Commentary:

Canada

By Kaitlyn Kiernan and Matt Walcoff

Oct. 31 (Bloomberg) — Canadian stocks fell, paring a monthly gain, as energy and raw material producers declined with commodity prices after Japan moved to weaken its currency against the U.S. dollar.

Barrick Gold Corp., the world’s largest producer of the metal, lost 2.6 percent as the U.S. Dollar Index surged the most since December 2008. Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 4 percent. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, slid 6.1 percent after the industrial metal declined as investors awaited details on European leaders’ revamped strategy for curbing the region’s debt crisis.

 The Standard & Poor’s/TSX Composite Index decreased 267.45 points, or 2.1 percent, to 12,252.06.

“On the last day of the month anything can happen,” Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm manages C$1 billion ($963 million). “The strength in the U.S. dollar has caused gold to come off. So much of the Canadian economy is still raw materials and not finished products that a move here or there makes a difference.”

The S&P/TSX rallied 5.4 percent this month for its biggest increase since May 2009 after falling each of the previous seven months. Oil and raw materials shares led gains as investors speculated European leaders’ move to boost the region’s rescue fund will prevent the debt crisis from weakening banks and the broader economy.

Japan sold yen for the third time this year and pledged more sales after the currency’s gain to a post-World War II high against the dollar threatened a recovery from the March earthquake and nuclear disaster.  The S&P/TSX Materials Index retreated, ending a six-day streak of advances.

Gold producers fell after the metal dropped as the U.S. dollar surged, reducing demand for the precious metal as an alternative investment. Barrick lost 2.6 percent to C$49.21.

Goldcorp Inc., the world’s second-largest company in the industry by market value, slipped 2.3 percent to C$48.50. Semafo Inc., which mines in West Africa, decreased 8.1 percent to C$7.65.

Energy shares retreated the most in four weeks as oil dropped. Suncor declined 4 percent to C$31.75. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, declined 5.2 percent to C$34.14. Precision Drilling Corp., Canada’s largest contract drilling company, tumbled 7.4 percent to C$11.56.

Copper producers fell as the metal dropped after surging the most since at least 1988 last week. First Quantum lost 6.1 percent to C$20.91. Teck Resources Ltd., Canada’s largest base- metals and coal producer, decreased 3.7 percent to C$39.96. Lundin Mining Corp., which operates in Europe, retreated 4.6 percent to C$3.91.                       

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, sank 4.9 percent to C$47.18 as corn and wheat fell. Agricultural commodities declined as a stronger dollar eroded prospects for U.S. exports.

The S&P/TSX Industrials Index fell 2.6 percent, trimming the biggest monthly advance since November 2001. The index lost 19 percent in the third quarter, its worst slide since 2002.

Canadian Pacific Railway Ltd., the country’s second-biggest railroad, decreased 7.1 percent, the most since December 2008, to C$61.61 after jumping 7.9 percent Oct. 28, when William Ackman’s Pershing Square Capital Management LP bought a 12 percent stake in the company.

Cameron Doerksen, an analyst at National Bank of Canada, cut his rating on the shares to “underperform” from “sector perform,” while Turan Quettawala, an analyst at Bank of Nova Scotia, reduced his rating to “sector perform” from “sector outperform.” In a note to clients, Doerksen said Pershing Square’s acquisition may lead to management changes that are unlikely to affect earnings in the near term.                      

Canadian National Railway Co., the country’s largest railroad, lost 2.3 percent to C$78.08, trimming its biggest monthly gain since October 2006. Bombardier Inc., the maker of trains and airplanes, decreased 6.6 percent to C$4.12 after rallying 8.1 percent Oct. 28.

Grande Cache Coal Corp., which mines in Alberta, surged a record 68 percent to C$9.87 after China’s Winsway Coking Coal Holdings Ltd. and Japan’s Marubeni Corp. agreed to buy the Calgary-based metallurgical coal producer for C$10 a share in cash.

Cline Mining Corp., which is developing coal mines in Canada and the U.S., rallied 19 percent, the most this year, to C$2.11. The company may be the next in the industry to be acquired, Marc Johnson, an analyst at M Partners Inc., said in a note to clients.

Natural gas-pipeline company Pacific Northern Gas Ltd. rose a record 20 percent to C$36.67 after agreeing to be bought by AltaGas Ltd., a natural gas extraction and transmission company, for C$36.75 a share in cash. AltaGas fell 1.7 percent to C$29.41.

Technology-patent owner Wi-LAN Inc. gained 8 percent to C$7.42 after saying it doesn’t intend to raise its C$532 million bid for Mosaid Technologies Inc. Mosaid agreed Oct. 27 to be bought by Sterling Partners for C$590 million.

US

By Rita Nazareth

Oct. 31 (Bloomberg) — U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline in almost a month, amid concern European leaders will struggle to raise funds to contain the region’s sovereign debt crisis.

Stocks extended losses in the final hour of trading after Greek Prime Minister George Papandreou said he will put the European Union’s new agreement on financing for Greece to a referendum. Morgan Stanley and Citigroup Inc. dropped more than 7.5 percent, following the biggest weekly gain since July 2010 for financial shares in the S&P 500, as European banks retreated. Alcoa Inc. and Chevron Corp. tumbled at least 4.1 percent to pace declines in commodity shares.

The S&P 500 dropped 2.5 percent to 1,253.30 as of 4 p.m. New York time, erasing its 2011 gain and capping the biggest decline since Oct. 3. The benchmark gauge for U.S. equities rose 11 percent in October, the best month since 1991, snapping a five-month retreat. The Dow Jones Industrial Average lost 276.10 points, or 2.3 percent, to 11,955.01 today.

 “We’ve been on a buying stampede,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St.

Petersburg, Florida, said in a telephone interview. His firm manages $300 billion. “The market was due for a pullback,” he said. “Europe did get a rescue that buys them more time, but they are not anywhere near a resolution to their crisis.”

Stocks rose last week after European leaders agreed to expand the region’s bailout fund and U.S. economic growth accelerated. Earlier this month, the S&P 500 came within 1 percent of extending a drop from its peak in April to 20 percent, the common definition of a bear market. Since then, it has risen 14 percent.                      

China can’t play the role of “savior,” the official Xinhua news agency said yesterday, as investors awaited the country’s response to Europe’s request for money to boost its bailout fund. Japanese Finance Minister Jun Azumi said today the government took unilateral steps to weaken the yen. Group of 20 leaders will gather Nov. 3-4 in Cannes, France, while central bankers from Australia, the U.S. and Europe will hold interest- rate policy meetings this week.

Papandreou’s gambit risks pushing the country into default if rejected by voters, and raises the ante with dissidents inside his own party. His popularity has plunged after a raft of austerity measures cut pensions and wages, increased taxes and sparked a wave of social unrest. An opinion poll published Oct. 29 showed most Greeks believe the accord on a new bailout package and a debt writedown is negative.

The Organization for Economic Cooperation and Development urged Group of 20 governments and central banks to “act decisively” to restore confidence as it lowered its growth forecasts for the U.S. and the euro area.

European stocks slumped, paced by losses in banks, as Italian and Spanish bonds declined. The KBW Bank Index retreated 4.1 percent. Morgan Stanley fell 8.7 percent to $17.64. Citigroup dropped 7.5 percent to $31.59.

MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.

“The spike in the yield on the Italian note coupled with the actions to ring fence MF Global put investors back on the defensive,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion of assets, said in an e-mail. “This morning’s report of a decline in the Chicago business barometer reminded all that the economic fundamentals are still tenuous.”                     

The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 58.4 in October from 60.4 the prior month. A level of 50 is the dividing line between expansion and contraction. Economists forecast the gauge would drop to 59, according to the median of 55 estimates in a Bloomberg News survey. Projections ranged from 56 to 62.5.

The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 3.2 percent. The Dow Jones Transportation Average, a proxy for the economy, slid 2.4 percent.

Gauges of energy and raw material producers in the S&P 500 retreated at least 4.1 percent on concern about slower demand and as the dollar rallied, reducing the appeal of commodities as an alternative investment. Alcoa dropped 7 percent to $10.76. Chevron erased 4.2 percent to $105.05.

Yahoo! Inc. tumbled 5.6 percent to $15.64. The company is leaning toward selling its Asian assets and redistributing proceeds to shareholders, rather than selling itself to a group of buyers, according to people familiar with the situation. Dana Lengkeek, a spokeswoman for Yahoo, declined to comment.                        

Barton Biggs, the hedge fund manager who bought stocks when the market bottomed in 2009, boosted bullish bets on equities in his Traxis Global Equity Macro Fund after European leaders took action to contain the debt crisis.

The fund’s net long position has risen to 80 percent, Biggs, the founder of Traxis Partners LP, said in an interview with Betty Liu on Bloomberg Television’s “In the Loop” program. That compares with 65 percent on Oct. 17 and 40 percent about a month before that, and near 85 percent six months prior. Investors remain too pessimistic, meaning the rally will continue as they change their mind, he said.

“There’s a tremendous amount of money that’s trapped out of stocks,” Biggs said today. The rally is “going to continue for a while.”

American companies are beating Wall Street profit estimates for the 11th straight quarter, enough to revive a bull market that analysts say will eclipse any rally in the past 12 years. Price targets for companies in the index from more than 10,000 estimates suggest the S&P 500 will advance 13 percent to 1,447.93 in a year.

Companies from Google Inc. to Peabody Energy Corp. are delivering higher earnings at a time when Bill Gross, the co- chief investment officer of Pacific Investment Management Co., is warning that Europe’s debt crisis will spur a recession.

While more than $6.3 trillion has been erased from global equities since May, analyst forecasts imply the benchmark measure will post its biggest rally since the 1990s technology bubble, when the gain since March 2009 is included.

“This is looking like it’s going to be a really decent quarter,” Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles & Co. in Boston, which manages about $150 billion, said in an Oct. 25 interview. “Valuations are very, very low relative to history, and you don’t have to make heroic assumptions on multiples to get reasonable returns.”

The S&P 500 traded at 11.7 times reported income on Oct. 3, within 14 percent of its price-earnings ratio at the bottom of the financial crisis in March 2009, Bloomberg data show. The index gained 3.8 percent last week.

Have a wonderful evening everyone.

Be magnificent!

It is this desire to express himself that leads him to search for riches and power.

But he must understand that to accumulate material wealth is not to find this fulfillment.

What brings him back to himself is the interior light, and not exterior objects.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Firmness of purpose is one of the most necessary sinews

of character and one of the best instruments of success. 

Without it, genius wastes its efforts in a maze of

inconsistencies.

                   -Lord Chesterfield, 1694-1773

 

 

Dear Friends,

 

 

Tangents:

 

 

A Recent News Story From Reuters:

 

The world’s 7 billionth person will be born into a population more aware than ever of the challenges of sustaining life on a crowded planet but no closer to a consensus about what to do about it.

To some demographers the milestone foreshadows turbulent times ahead: nations grappling with rapid urbanization, environmental degradation and skyrocketing demand for healthcare, education, resources and jobs.

To others, a shrinking population, not overpopulation, could be the longer-term challenge as fertility rates drop and a shrinking workforce is pushed to support social safety for an aging populace.

“There are parts of the world where the population is shrinking and in those parts of the world, they are worried about productivity, about being able to maintain a critical mass of people,” Babatunde Osotimehin, executive director of the U.N. Population Fund, told Reuters.

“Then there are parts of the world where the population is growing rapidly. Many of these countries face challenges in terms of migration, poverty, food security, water management and climate change and we need to call attention to it.”

The United Nations says the world’s seven billionth baby will be born on October 31.

 

 

 

Market Commentary:

CANADA

By Matt Walcoff and Kaitlyn Kiernan

Oct. 25 (Bloomberg) — Canadian stocks fell for the first time in three days, led by financial and energy shares, as U.S.

home prices and consumer confidence declined and investors awaited a summit of European leaders tomorrow.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, dropped 2 percent as energy shares fell. Toronto-Dominion Bank, the country’s second- largest lender by assets, lost 1.7 percent after the S&P/Case- Shiller index of U.S. home prices declined more than forecast.

Barrick Gold Corp., the world’s biggest gold producer, gained 3.4 percent as the metal climbed for a third day.

The Standard & Poor’s/TSX Composite Index dropped 52.53 points, or 0.4 percent, to 12,109.75. “Uncertainty is still with us until we get better news, and we may not even get certainty tomorrow,” Tony Demarin, the chief investment officer at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$300 million ($295 million). “Gold is an asset class that protects you against the uncertainty of what’s going to happen there.” The S&P/TSX rallied 2.8 percent to a one-month high in the previous two days as investors speculated European leaders will reach a deal to prevent the continent’s sovereign debt crisis from weakening banks and the broader economy. The index is heading for its first monthly gain since February.

Another Summit

The EU finance ministers’ meeting scheduled for tomorrow was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled, EU President Herman Van Rompuy said.

The S&P/Case-Shiller index of U.S. home prices declined 3.8 percent in August from last year, S&P said today. Economists had forecast a retreat of 3.5 percent, according to the median estimate in a Bloomberg survey.

The U.S. Conference Board reported that its gauge of consumer confidence fell to the lowest level since March 2009.

The index trailed all 76 forecasts in a Bloomberg survey of economists. Canadian Natural lost 2 percent to C$33.84. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, decreased 2.6 percent to C$35.46. TransCanada Corp., the owner of Canada’s biggest pipeline system, fell 1.1 percent to C$43.46.

Banks Fall

The six largest S&P/TSX banks dropped. TD lost 1.7 percent to C$73.68. Royal Bank of Canada, its bigger domestic rival, slipped 0.8 percent to C$47.70. Mortgage insurer Genworth MI Canada Inc. decreased 3 percent to C$20.73.

Precious metals gained as economic concerns spurred demand for an investment haven. Barrick advanced 3.4 percent to C$48.05. Goldcorp Inc., the world’s second-largest producer of the metal by market value, increased 3.8 percent to C$48.02. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, climbed 3.7 percent to C$32.56.

Futuremed Healthcare Products Corp. jumped a record 31 percent to C$8.12 after Cardinal Health Inc. agreed to buy the company for C$8.15 a share in cash. Shares of Concord, Ontario- based Futuremed had plunged 25 percent from July 11 to yesterday and closed at a record-low C$5.60 Oct. 6.

US

By Rita Nazareth

Oct. 25 (Bloomberg) — U.S. stocks slid, halting a three- day rally, amid earnings and economic reports that disappointed investors and uncertainty over how much progress European leaders are making in debt-crisis talks. Treasuries rallied, while oil surged on signs of falling supplies.

The Standard & Poor’s 500 Index tumbled the most in three weeks, losing 2 percent to 1,229.05 as of the 4 p.m. close in New York. The Stoxx Europe 600 Index dropped 0.7 percent while the euro slipped from a six-week high, weakening 0.2 percent to $1.3901. Ten-year Treasury yields fell 13 basis points to 2.11 percent. The S&P GSCI Index of commodities added 0.6 percent as oil rose to a 12-week high. Amazon.com Inc. retreated 15 percent after missing profit forecasts.

The cancellation of tomorrow’s meeting of European Union finance ministers spurred concern that a summit of the region’s leaders will fail to produce agreements on how to tame the debt crisis. 3M Co. slid following lower-than-estimated earnings and United Parcel Service Inc. slipped as international shipping growth began to cool, while a gauge of U.S. consumer confidence sank to the lowest since March 2009.

“It’s hard to get excited in this environment,” Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, said in a telephone interview. “You have very anemic growth and you have a big a question mark about the debt situation in Europe.”

EU Meetings

The EU finance ministers’ meeting was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled, EU President Herman Van Rompuy said.

The S&P 500 retreated after three straight gains lifted the benchmark index to the highest level since Aug. 3 and trimmed its year-to-date drop to less than 0.3 percent yesterday. 3M slid 6.3 percent for its worst drop in almost three years and biggest loss in the Dow Jones Industrial Average. Alcoa Inc., Bank of America Corp., Hewlett-Packard Co. and JPMorgan Chase & Co. also slid more than 3 percent as the Dow sank 207 points, or 1.7 percent, to 11,706.62.

MF Global Holdings Ltd. plunged 48 percent, the most since March 2008, after the futures broker said its quarterly loss widened on charges tied to deferred tax assets and a restructuring. Netflix Inc. slumped the most in seven years, sinking 35 percent, after the video-rental service posted bigger-than-forecast user losses following a price increase.

Topping Projections

Earnings have topped the average analyst estimate at about 74 percent of the 144 companies in the S&P 500 that have reported results since Oct. 11, Bloomberg data show. Net income has increased 14 percent for the group and sales have risen 10 percent. Earnings have surpassed estimates by an average 5.9 percent, compared with an average 8.5 percent each quarter since 2009, the data show.

After U.S. exchanges closed, Amazon missed the average analyst profit estimate by 42 percent and said it may post an operating loss of $200 million in the fourth quarter, while analysts projected income. Amazon is sacrificing profit margins in search of sales volume and market-share gains against companies such as Apple Inc.

Amazon shares tumbled 15 percent to $193.10 at 4:44 p.m.

New York time.

Extending Losses

Stocks extended losses in early trading as the Conference Board’s consumer-sentiment index decreased to 39.8 from a revised 46.4 reading in September. The S&P/Case-Shiller index of property values in 20 cities fell 3.8 percent from August 2010, the group said today. The median forecast of 30 economists surveyed by Bloomberg was for a 3.5 percent decline.

Oil in New York jumped 2.1 percent to $93.17 a barrel after surging 4.4 percent yesterday. Futures climbed as much as 3.7 percent, erasing this year’s loss. Supplies at Cushing, Oklahoma, the delivery point for West Texas Intermediate, the grade traded in New York, fell last week, a satellite survey showed.

Silver and gold rallied at least 3 percent on demand for the metals as haven investments, leading gains in nine of 24 commodities tracked by the S&P GSCI. Coffee, lead, zinc, hogs and copper fell more than 1.3 percent for the biggest declines.

The euro weakened against eight of 16 major peers, with the South Korean won and Swiss franc strengthening at least 0.4 percent to lead gains. The dollar slipped as much as 0.5 percent against the Japanese currency to touch a post-World War II low of 75.74 yen, before paring losses in half after the Nikkei newspaper reported that policy members will discuss steps to ease the impact of the strong yen on the Japanese economy.

Have a Wonderful Evening Everyone!

Be Magnificent!

As Always,

Kyle, for Carolann

 

 

Dear Friends,

Tangents:

Birthdays: Dizzy Gillespie, October 21, 1917

             Alfred Nobel, October 21, 1833, established Nobel Prize

What counts in making a happy marriage is not so much

how compatible you are, but how you deal with incompatibility.

                                   -Leo Tolstoy, 1828-1910

-from the Book of Days:  reflections from the past…

Conrad Russell to Katharine Asquith, October 22, 1929:

Your mother and I dined off a tray and then we turned on H.G. Wells on the wireless and we were soon both in the Land of Nod.  I wonder what the point of that sort of listening in is.  We can all read Wells if we want to; he has a vulgar accent and a squeaky scrannel voice.  It’s a wonderful invention for blind and bedridden invalids of course.  Also you can hear the result of the boat race [between Oxford and Cambridge Universities] more quickly.

 

Photo of the day 

October 21, 2011

Migrating cranes fly during sunset near Straussfurt, central Germany.Jens Meyer/AP.

Market Commentary:

Canada

By Matt Walcoff

Oct. 21 (Bloomberg) — Canadian stocks gained, narrowing a weekly decline, as oil and metals rose after euro-area finance ministers began meetings aimed at preventing their sovereign debt crisis from damaging banks and the economy.

Canadian Natural Resources Ltd., the nation’s second- biggest oil and gas producer by market value, climbed 2.7 percent as crude advanced. First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, gained 6.3 percent as the metal rallied after settling yesterday at the lowest since July 2010. Toronto-Dominion Bank, Canada’s second- biggest lender by assets, increased 1.1 percent.

The Standard & Poor’s/TSX Composite Index rose 119.16 points, or 1 percent, to 11,949.49, reducing its weekly loss to 1.1 percent.

“The market’s been moving on rumors there could be a start of a resolution to the difficulties they’re having over there,” Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, said in a telephone interview of negotiations in Europe. The firm oversees about C$1 billion ($991 million). “If there’s actually some meat to the resolution, I could see the markets moving much higher,” he said.

The S&P/TSX slipped this week as European officials struggled to reach an agreement on changes to the continent’s rescue initiatives. Canada’s stock benchmark gauge is set to underperform the S&P 500 this year for the first time since 2003 as base metals and fuels have retreated. Energy and raw- materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.                   

Today’s meeting of euro-area finance ministers will be followed by a gathering of ministers from all 27 European Union countries tomorrow. Leaders of EU countries are scheduled to meet on Oct. 23 and Oct. 26. European governments may offer as much as 940 billion euros ($1.3 trillion) to fight the debt crisis, two people familiar with the discussions said yesterday.

The S&P/TSX Energy Index completed its fourth-straight weekly gain. Canadian Natural climbed 2.7 percent to C$33.31. Encana Corp., the country’s biggest natural gas producer, rose 3.2 percent to C$21.10.

Bankers Petroleum Ltd., which produces oil and gas in Albania, rallied 10 percent to C$4.88 a day after John Malone, an analyst at Ticonderoga Securities LLC, boosted his rating on the shares to “buy” from “neutral.” The company’s share price assumed too low of an oil price, Malone wrote in a note to clients.                       

Precision Drilling Corp, Canada’s largest contract drilling company, sank 5.3 percent to C$10.98 after reporting earnings that trailed the average analyst estimate in a Bloomberg survey by 11 percent, excluding certain items.

Raw-materials companies advanced as the U.S. Dollar Index fell to the lowest in five weeks.

First Quantum increased 6.3 percent to C$15.99 as copper futures surged the most since June 2009. Extorre Gold Mines Ltd., which explores in Argentina, soared 7.8 percent to C$8.02 as gold futures rebounded from the lowest settlement price since Sept. 26. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, climbed 0.9 percent to C$49.63 as wheat gained.

The six biggest S&P/TSX banks and the three largest insurers each rose. TD gained 1.1 percent to C$74.50. Royal Bank of Canada, its bigger domestic rival, advanced 1 percent to C$48.04. Manulife Financial Corp., North America’s fourth- largest insurer, climbed 2.5 percent to C$12.75.

Canadian National Railway Co., the country’s biggest railroad, rose 1.6 percent to C$75.04 to lead the S&P/TSX Industrials Index to its fourth-straight weekly gain, the longest streak since February. CN and Canadian Pacific Railway Ltd. advanced this week as CSX Corp. and Union Pacific Corp. reported profit increases.

US

By Rita Nazareth

Oct. 21 (Bloomberg) — U.S. stocks advanced, giving the Standard & Poor’s 500 Index its longest streak of weekly gains since February, amid speculation of an agreement to contain Europe’s debt crisis and further Federal Reserve stimulus.

Morgan Stanley and Wells Fargo & Co. added at least 2.1 percent as European lenders rallied. Alcoa Inc. and Boeing Co. rose more than 2.8 percent, pacing gains in companies most-tied to the economy. McDonald’s Corp. climbed 3.7 percent after profit jumped as lower-priced items boosted U.S. store sales.

Honeywell International Inc. advanced 5.8 percent as a recovery in commercial aerospace helped earnings climb 44 percent.  The S&P 500 increased 1.9 percent to 1,238.25 as of 4 p.m. New York time, the highest level since Aug. 3. The gauge rose 1.1 percent since Oct. 14, gaining for a third straight week.

The Dow Jones Industrial Average climbed 267.01 points, or 2.3 percent, to 11,808.79 today, erasing its 2011 decline.

“There’s a sense that Europe will come out with something that will calm down imminent fears of the crisis escalating out of control,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $360 billion, said in a telephone interview. “Markets are also digesting Federal Reserve lip service given to additional  quantitative easing moves. However, it appears most investors are unsure whether additional easing is needed.”

Gains accelerated after the S&P 500 climbed past 1,233.10, its intraday peak on Oct. 18. A burst of trading in E-Mini S&P 500 futures occurred at that level, according to data compiled by Bloomberg. Volume jumped to 31,774 contracts at 10:17 a.m. New York time, the most for any minute of the day at that point.

Three rallies since the U.S. government was stripped of its AAA credit rating by S&P have stopped around 1,220.

“The path of least resistance is higher,” Christopher Verrone, head of technical analysis at New York-based Strategas Research Partners, said in a phone interview. “I’m interested to see what happens in the 1,260-1,270 range. That is when we’ll get more information on how durable this advance is.”

France retreated in a clash with Germany over how to expand the power of Europe’s bailout fund after the first meeting in a six-day marathon intended to solve the debt crisis. France’s view that the fund, the European Financial Stability Facility, should get a banking license enabling it to borrow from the European Central Bank, “is not a definitive point of discussion for us,” French Finance Minister Francois Baroin told reporters today in Brussels. “What matters is what works.”

French President Nicolas Sarkozy and German Chancellor Angela Merkel are scheduled to meet tomorrow in Brussels before a summit the next day and a follow-up leaders’ gathering on Oct. 26 to nail down what they’ve called a “comprehensive” plan.

“While we won’t get a definitive response from the Europeans this weekend on how best to deal next with their debt crisis, officials are still holding out hope that just a few extra days will complete the job,” Peter Boockvar, an equity strategist at Miller Tabak & Co., wrote in a note today.

American banks rallied following gains in European lenders. Morgan Stanley rose 2.5 percent to $17.02. Wells Fargo added 2.1 percent to $26.31.

Investors also reacted to comments from Fed Governor Daniel Tarullo, who late yesterday called for resuming large-scale purchases of mortgage bonds, boosting chances of a third round of asset buying aimed at reviving growth. Today, Fed Vice Chairman Janet Yellen said a third round of large-scale securities purchases might become warranted if necessary.

“While the hurdles for QE3 remain high, it’s still on the table as an option,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “It becomes a question of whether or not it’s effective.”

The Morgan Stanley Cyclical Index of companies most-tied to the economy rose 3 percent. The Dow Jones Transportation Average, a proxy for the economy, added 2.2 percent. Alcoa, the largest U.S. aluminum producer, advanced 2.8 percent to $10.23. Boeing climbed 3.4 percent to $64.59.

Earnings reports have also gained investors’ attention today. Profit for S&P 500 companies will climb 16 percent in the third quarter and rise 18 percent to a record $99.25 for all of 2011, according to analyst estimates compiled by Bloomberg.

About three quarters of the S&P 500 companies that reported results since Oct. 11 beat analysts’ estimates.

McDonald’s added 3.7 percent to $92.32. Chief Executive Officer Jim Skinner has sought to draw American diners with low- priced menu items, such as the $1 McDouble burger, as the nation’s 9.1 percent unemployment rate saps consumer confidence. Sales in the U.S. were driven by fruit smoothies, Chicken McNuggets and breakfast foods, the company said.

Honeywell climbed 5.8 percent to $51.28 as the company also increased its full-year forecast. Honeywell and other U.S. manufacturers have posted earnings growth this year amid a slowing economy by keeping costs in check and expanding abroad.

Aerospace sales rose 8 percent in the quarter, the company said. Seagate Technology Plc surged 28 percent, the most since it went public in 2002, to $15.42. ThinkEquity LLC analysts said that the maker of disk drives may gain market share from rival Western Digital Corp. due to recent Thai floods.

Energy and raw material producers gained as the S&P GSCI Index of commodities advanced 1 percent. Freeport-McMoRan Copper & Gold Inc. gained 5.2 percent to $36.58. ConocoPhillips added 2.2 percent to $71.83.

General Electric Co. slid 1.9 percent, the biggest decline in the Dow, to $16.31 as tighter profit margins in industrial businesses from energy to aviation overshadowed third-quarter growth led by the finance unit.                     

Companies transporting holiday merchandise may outperform the stock market as a rise in consumer spending indicates seasonal shopping may be better than forecast.

Retailers were cautious when they placed orders this summer amid concerns the economy was “falling apart” and headed for a double-dip recession, said David Ross, a Baltimore-based transportation analyst at Stifel Nicolaus & Co. Even though September retail sales rose the most in seven months, shares of trucking and airfreight companies still reflect pessimistic forecasts, he said.

 “There is a greater chance of a positive holiday-shopping surprise than a negative one,” said Ross, who maintains “buy” ratings on United Parcel Service Inc. and Old Dominion Freight Line Inc. If retailers are caught short after under-ordering, the peak shipping period — typically July through September — will occur later, he said.

Have a wonderful weekend everyone.

Be magnificent!

It is man’s social nature which distinguishes him from the brute creation.

If it is his privilege to be independent, it is equally his duty to be inter-dependent.

Only an arrogant man will claim to be independent of everybody else and be self-contained.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

I think you should take your job seriously,

but not yourself – that is the best combination.

            -Judi Dench, 1934- 

 

 

Dear Friends,

Tangents:

A thought:

Time drags you along

“Let me start by asking you a simple question: What time is it right now?” Adam Frank writes for National Public Radio.  “To answer this query you probably looked at the clock on your computer or on your cellphone.  It told you something like 9:12 a.m. or 11:22 a.m. or 1:37 p.m.  But what is 1:37 p.m.?  What is the meaning of such an exact metering of minutes?….[D]id 1:37 p.m. even exist 1,000 years ago for peasants living in the Dark Ages of Europe, Song Dynasty China or the central Persian Empire?  Was there such a thing as 1:37 p.m. across the millennia that comprise the vast bulk of human experience?  The short answer is “no.”  But 1:37 exists for you….You feel minutes in a way that virtually none of your ancestors did.  You feel them pass and you feel them drag on with all the frustration, boredom, anxiety and anger that can entail.  For you, those minutes are real.”    

Photos of the day

October 18, 2011

Migrating Common Cranes fly to their night roost at sunset near the village of Linum, Germany. The marshes and lakes in the state of Brandenburg attract tens of thousands of cranes during their autumn migration from their breeding grounds in Russia and Scandinavia to their wintering areas in southwestern Europe. Up to 60,000 birds gather during the peak of migration turning the area into the biggest migration stopover in northern Europe. Thomas Krumenacker/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Oct. 18 (Bloomberg) — Canadian stocks rose from a one-week low, led by energy producers, as crude oil climbed amid optimism that economic growth will stabilize after Bank of America Corp. reported better-than-estimated earnings.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 2.8 percent as crude advanced to a one-month high.

Canadian National Railway Co., the country’s largest railroad, led industrials higher as it rose 3 percent. BlackBerry maker Research In Motion Ltd. climbed 3 percent after unveiling a new operating system.

The Standard & Poor’s/TSX Composite Index advanced 130.07 points, or 1.1 percent, to 12,053.11.

“The turnaround has been driven by the energy sector as crude has been creeping up around the prospect of double-dip recessions around the world being less likely,” Timothy Lazaris, chief executive officer of Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($54.3 million).

The index declined 1.3 percent yesterday as metals and fuels retreated on concern European officials may not have a final plan to address the continent’s debt crisis this year. The S&P/TSX lost 16 percent from April 5 through yesterday as oil slumped 20 percent and copper sank 21 percent. Energy and raw- materials companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.                      

Bank of America Corp., this year’s worst performer in the Dow Jones Industrial Average, swung to a profit from a year- earlier loss on higher revenue, better credit quality and one- time gains, raising hopes that economic growth will stabilize.

The S&P/TSX Energy Index gained 2.4 percent as crude oil advanced. Suncor Energy Inc. jumped 2.8 percent to C$30.60. Canada’s largest oil and gas producer and its partners discovered oil in the Norwegian North Sea in the Butch prospect near the Ula field.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, advanced 2.3 percent to C$32.96.

Enbridge Inc., Canada’s largest pipeline company, rallied 1.6 percent to C$34.90. TransCanada Corp., the owner of Canada’s biggest pipeline system, rose 1.8 percent to C$43.63.

Canadian National Railway Co. led the S&P/TSX Industrials Index higher after Cormark Securities Inc. boosted the railway to “buy” from “market perform,” saying rails will be among the first industries to recover from the economic slowdown.

Canadian National Railway gained 3 percent to C$74.65. Canadian Pacific Railway Ltd., Canada’s second-biggest railroad, rose 4.9 percent to $56.08.

Stocks fell earlier as precious and base metal producers declined on a report that China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009. The gain was less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists and followed a 9.5 percent increase in the previous three months.

Barrick Gold Corp. lost 1 percent to C$47.79. Goldcorp., the world’s second-biggest gold producer by market value, dropped 2.5 percent to C$47.05. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, slipped 3.4 percent to C$31.06.

Teck Resources Ltd., the country’s biggest base-metals and coal producer, lost as much as 4.5 percent as copper futures fell before surging to close 1.9 percent higher at C$35.95.                     

Research In Motion Ltd. advanced 3 percent to C$23.59. The BlackBerry maker, looking to spur consumer interest in its devices after losing sales to Apple Inc. and Google Inc., unveiled a new operating system for its PlayBook tablet computer and new smartphones.

Niko Resources Ltd. surged 8.5 percent, the second-most in the S&P/TSX Index, to C$50.21. The oil and gas producer with operations in South Asia was raised to “outperform” from “market perform” at Raymond James Ltd., which cited improved risks on reserves and exploration potential.

Industrial Alliance Insurance and Financial Services Inc. sank 4.9 percent, the most since July 2009, to C$30.65. The provider of insurance and retirement plans was cut to “hold” from “buy” at Desjardins Securities Inc., which cited the impact of the low-interest rate environment.

Lululemon Athletica Inc. slumped 2.9 percent to C$52.11.

The yoga-wear retailer was rated a new “neutral” at Macquarie Group Ltd, which gave a 12-month price estimate of $51 on the U.S. shares. Macquarie said competition is increasing and the stock is “pricey.”

US

By Rita Nazareth

Oct. 18 (Bloomberg) — U.S. stocks gained, sending the Standard & Poor’s 500 Index to the highest level since August, as Bank of America Corp. paced a rally in financial shares and optimism grew over progress on expanding Europe’s rescue fund.

Bank of America climbed 10 percent after it swung to a profit as credit quality improved. A gauge of homebuilders in S&P indexes jumped 9.6 percent, the most since March 2009, as data showed that industry sentiment increased more than forecast. Caterpillar Inc. and Alcoa Inc. added at least 3.9 percent, pacing gains among companies most-tied to the economy.

Apple Inc. tumbled 5.9 percent after the close of regular trading after profit and sales missed analysts’ expectations.

The S&P 500 added 2 percent to 1,225.38 at 4 p.m. New York time, erasing yesterday’s drop. The benchmark gauge rose to the highest level since Aug. 3, two days before S&P stripped the U.S. of its AAA credit rating. The Dow Jones Industrial Average gained 180.05 points, or 1.6 percent, to 11,577.05 today.

“We could be into one of those buying stampedes,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a telephone interview. His firm manages $300 billion. “It feels that the worst is in the rear-view mirror. Housing is not going to be a thing that sucks you down into a recession. Earnings are still going to look pretty good. Something has to happen in Europe.”

The S&P 500 rose from the threshold of a bear market early this month amid optimism over corporate earnings and steps by European leaders to support banks. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months. The S&P 500 briefly rose above that range, reaching 1,233.10 today.

Profit for S&P 500 companies will climb 17 percent in the third quarter and rise 18 percent to a record $99.76 for all of 2011, according to analyst estimates compiled by Bloomberg. The S&P 500 is trading for 11.1 times forecast earnings for 2012, compared with its five-decade average of 16.4 times reported income, according to data compiled by Bloomberg.

Global stocks rallied. France and Germany are engaged in “intensive talks” on bolstering the European Financial Stability Facility, Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, said today. He declined in an interview to comment on a report in the Guardian that they reached agreement on increasing the size of the fund, saying he won’t comment on intermediate results of the negotiations.

In the U.S., data showed that homebuilders were less pessimistic than forecast in October, as near record-low borrowing costs and price decreases raised hopes the market will turn for the better over the next six months.                          

The Morgan Stanley Cyclical Index of companies most-tied to the economy added 3.3 percent. The Dow Jones Transportation Average advanced 3.1 percent. Alcoa gained 5.9 percent to $10.14. Caterpillar climbed 3.9 percent to $84.72. PulteGroup Inc., the largest U.S. homebuilder by revenue, rallied 11 percent to $4.46.

“It’s reality beating investors’ poor expectations,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “That happens particularly with Bank of America, given that everyone assumed for the worst. It’s not a matter of if, it’s just a matter of when the industry recovers.”

The KBW Bank Index rallied 6.1 percent as all of its 24 stocks advanced. The gauge slumped 3.9 percent yesterday.

Bank of America rose 10 percent to $6.64. The provision for loan losses dropped to $3.4 billion from $5.4 billion a year earlier as credit improved in the card unit and commercial lending, the bank said. The card unit swung to a profit in the quarter, while income rose at the deposit unit, global wealth and investment management, and global commercial banking.

State Street Corp. gained 11 percent to $37.49. The custody bank under pressure from activist investor Nelson Peltz to increase profitability said third-quarter profit rose a stronger-than-expected 11 percent as custody assets increased.

Goldman Sachs Group Inc. added 5.5 percent to $102.25 even after reporting its second quarterly loss in 12 years as the firm lost money on investments and revenue declined from trading, asset management and securities underwriting.

“It’s time to get less bearish,” David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “Investors ought to be able to look forward and recognize that the economy does muddle through. There’s a better underlying story for banks and also there’s housing. There’s a realization that at some stage this thing is going to turn.”

 International Business Machines Corp. tumbled 4.1 percent to $178.90. The biggest computer-services company missed sales estimates for the first time in five quarters. Revenue showed slowing growth in IBM’s software, hardware and services businesses.

 Nasdaq-100 Index futures lost 0.9 percent to 2,342.50 at 5:05 p.m. after the close of regular trading. Apple retreated 5.9 percent to $397.15 as profit missed estimates as the company sold fewer iPhones than analysts’ projected.

Intel Corp. also reported results after the market close.

The shares gained 4.4 percent to $24.43, after rising 0.5 percent in regular trading. The chipmaker forecast fourth- quarter sales that exceeded some analysts’ estimates, citing strong demand for laptop computers in emerging markets.

 The S&P 500 may rise about 4 percent this week before the gain ends, according to Tom DeMark, the creator of indicators meant to identify turning points in the price of securities.

DeMark, whose prediction last month that the S&P 500’s decline would stop at 1,076 proved prescient when the index bottomed at 1,074.77, said the rally that lifted the benchmark as much as 14 percent since then will fizzle. The S&P 500 will rise as high as 1,254 before falling at least 5.6 percent, he wrote in an e-mail today.

Have a wonderful evening everyone.

Be magnificent!

An eye for an eye only end up making the whole world blind.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Never let your sense of morals

keep you from doing what is right.

          -Isaac Asimov, 1920-1992