Author: Carolann

 

Dear Friends,

 “…People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets, their true beauty is revealed only if there is a light from within…”

-Elizabeth Kubler Ross

Photo of the day:

Veterinary physiotherapist Livia Pereira (L) applies cream on a paralyzed lion Ariel as the veterinary chiropractic Camila Morandini works on it at the living room of Pereira’s home in Sao Paulo July 20, 2011. Pereira’s home has turned into a hospital since the 3-year-old lion started a landmark treatment to cure a rare autoimmune disease which paralyzed his legs about a year ago. Through an internet campaign launched on social networking websites such as Facebook and Twitter, Borges has been managing to raise funds to pay for his $11,000 monthly hospital bills. Nearly 60,000 people have clicked on the “like” button on Facebook and hundreds of others made donations to two bank accounts linked to Borges’ foundation aimed at helping abandoned animals. The 310-pound (140-kg) lion started limping over one year ago prompting doctors to carryout a surgery to remove a herniated disc which they believed was causing the problem. But the procedure only made things worse and his rear legs were soon paralyzed as well. As Ariel grew weaker, Borges decided to turn to alternative methods such as chiropractic therapy and acupuncture. According to Pereira, head of the team of vets who have been treating the lion, he has so far responded well to the procedures.

(REUTERS) 

Market Commentary:

Canada

Canada’s inflation rate slowed more than economists forecast in June as carmakers offered larger discounts, hotel rates declined and gasoline prices eased.

The consumer-price index increased 3.1 percent from a year earlier, Statistics Canada said today in Ottawa, following a May increase of 3.7 percent that was the fastest since March 2003. The lowest prediction in a Bloomberg survey of 24 economists was 3.4 percent, with a median forecast of 3.6 percent.

The core inflation rate, which excludes eight volatile items such as gasoline, unexpectedly slowed to a 1.3 percent pace in June from May’s 1.8 percent. Economists forecast it would accelerate to 1.9 percent.

Bank of Canada Governor Mark Carney said this week that inflation will exceed 3 percent, the top of his target range, in “the short term,” while keeping his key interest rate at 1 percent to foster an economic recovery. Policy makers are weighing rising prices against the risks posed by Europe’s debt crisis and slow U.S. growth.

“It certainly gives the Bank of Canada a little bit more flexibility to stay on the sidelines,” said Sal Guatieri, a senior economist at Bank of Montreal in Toronto.

The Canadian dollar fell 0.7 percent to 94.99 cents per U.S. dollar at 12:55 p.m. in Toronto. One Canadian dollar buys $1.0527. The two-year Canadian government bond yield fell six basis points to 1.50 percent.

Currency Weakens

The currency weakened from about 94.35 cents to 94.65 cents during the 40 minutes before Statistics Canada released the CPI data at 7 a.m. Toronto time.

“There was, once again, heavy speculation about the number before the release,” said Sebastien Galy, a senior foreign- exchange strategist at Societe Generale SA in London, via e- mail.

Canada’s statistics agency made economic data available to companies licensed to distribute its data up to 59 seconds before the official publication time for more than six years, according to a KPMG LLP report published yesterday on Ottawa- based Statistics Canada’s website.

“KPMG contacted a number of licensed distributors and concluded that it is unlikely that any data were actively released to their clients prior to the official release time,” a Statistics Canada summary of the report said.

KPMG Investigation

The KPMG investigation was ordered in December by then- Industry Minister Tony Clement after the agency, Canada’s primary source of economic information, said it had allowed distributors to get information as much as 59 seconds before it was released to the public. The agency stopped the practice on Nov. 25 after being alerted to it by Bloomberg News.

“Statistics Canada applies strict security procedures during media lockups to prevent release of protected information prior to official release time,” Peter Frayne, head of Statistics Canada’s media relations in Ottawa, said in an e- mail. “These procedures were followed during this morning’s lockup and we have no indication that anything unusual occurred.”

The currency reached the strongest in more than three years yesterday on speculation the Bank of Canada will increase its policy interest rate this year. The central bank’s statement at its July 19 rate decision dropped the word “eventually” from a phrase about when policy makers will move.

“It’s comforting in so far that some of the immediate pressure on the Bank of Canada” to raise interest rates is lifted, said David Tulk, chief Canada macro strategist at Toronto-Dominion Bank’s TD Securities unit.

Monthly Data

On a monthly basis, consumer prices fell 0.7 percent in June and the core measure fell 0.6 percent. Economists forecast consumer prices would drop 0.2 percent from May and that core prices would be unchanged.

Gasoline prices fell 3.7 percent on the month in June, slowing the year-over-year advance to 28.5 percent from May’s 29.5 percent, Statistics Canada said.

The main factor behind the decline in the annual inflation rate was a 3.1 percent drop in passenger vehicle prices that was due to “larger discounts given by some manufacturers,” the report said.

Traveler accommodation prices fell 2.9 percent in June from a year earlier, compared with a May gain of 3.3 percent.

The Bank of Canada two days ago raised its inflation forecast over the next nine months, saying consumer prices will average 2.8 percent from July through September and slow to 1.9 percent in the second quarter of next year. They also said the core rate, which excludes eight volatile items, will peak at 2.1 percent in the first quarter of 2012.

Underlying Pressures

“The underlying inflationary pressures are stronger in Canada than they are in the United States,” said Paul Fenton, chief economist at Caisse de Depot et Placement du Quebec, Canada’s biggest pension-fund manager and a former Bank of Canada economist, before the report. “Starting to raise interest rates in the fall is the most likely outcome,” he said, adding the central bank “will go at a measured pace.”

Statistics Canada also said today that retail sales rose 0.1 percent in May, compared with economist predictions for a 0.3 percent decline. Gasoline receipts were the highest in almost three years and building material and gardening store sales rose 3.3 percent.

(Bloomberg)

 US

U.S. technology stocks rallied on improving earnings, sending the Nasdaq-100 Index to a 10-year high and extending a weekly gain for the Standard & Poor’s 500 Index, while lower-than-estimated results at Caterpillar Inc. dragged the Dow Jones Industrial Average lower.

AMD rose 19 percent after the chipmaker forecast more sales than analysts estimated. Technology stocks in the S&P 500 gained 1.2 percent, the most among 10 industries, as SanDisk Corp. added 9.6 percent after earnings beat projections. Caterpillar slid 5.8 percent as profit trailed projections because of Japan’s record earthquake and slower demand from China. C.R. Bard Inc. declined 12 percent, the most in the S&P 500, after reporting a loss in the second quarter.

The S&P 500 rose 0.1 percent to 1,345.01 at 4 p.m. in New York and gained 2.2 percent for the week. The Dow Jones Industrial Average dropped 43.25 points, or 0.3 percent, to 12,681.16. Gains in technology stocks pushed the Nasdaq-100 Index up 1.1 percent to a 10-year high.

“You’re seeing fast money gravitate to the large-cap tech names, viewing them as better able to withstand slower economic growth,” said Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York in a telephone interview. “There are a couple stocks weighing on the Dow where the earnings came out a little less than expected but overall, earnings have been pretty good. All eyes are on the budget deficit discussion. It’s not a market people really want to short.”

Aid for Greece

Stocks surged yesterday after euro-area leaders eased the terms of loans for cash-strapped nations and announced the latest aid for Greece after eight hours of talks yesterday. Officials empowered their 440-billion euro ($635 billion) rescue fund to buy debt across stressed nations, helping to erect a firewall around Spain and Italy even as they risked temporary default to lighten the Greek debt burden.

“Policy makers have made an important step,” said Jeffrey Palma, global equity strategist at UBS AG, in an interview on Bloomberg Television’s “In the Loop.” “Is this the be-all end-all package? No, and I think we need to be concerned still that there are medium-term challenges, but I do think it eliminates some of those tail risks.”

Quarterly reports from corporations have helped boost U.S. stocks this week. Among 122 S&P 500 companies that have reported earnings since July 11, 83 percent exceeded the average analyst estimate, according to data compiled by Bloomberg. The S&P 500 climbed 2.1 percent this week through yesterday.

(Bloomberg)

Have a Wonderful Weekend!

 

  

As Always,

 

Kyle, for Carolann.

 

Dear Friends,

 

 “Life is really simple, but we insist on making it complicated.”

– Confucius

Photo of the Day:

Acrobats from the Shenyang Acrobatic Troupe (Circus of China) perform during a rehearsal of Sky Mirage II in Sao Paulo, Brazil. – The Globe and Mail.

Market Commentary:

 

 Canada

 Canada’s dollar appreciated to the strongest in more than three years versus the greenback after statements this week from the Bank of Canada led investors to raise bets interest rates will increase this year.

 The loonie, as the currency is commonly called, weakened against the euro for a second day on reports of progress in addressing the Greek debt crisis. Crude oil, Canada’s largest source of export revenue rose for a third day.

“It’s getting harder and harder for the Bank of Canada to justify the low interest rates as inflation starts to creep up higher,” said Aaron Fennell, a futures specialist at Bank of Nova Scotia’s Scotia McLeod unit, by phone from Toronto. “At some point, they’re going to have to start raising rates and they may have to raise rates quite a bit before we’re said and done to get to a more normal interest rate. Long-term, you have to be bullish the Canadian dollar.”

 The currency rose as much as 0.5 percent to 94.23 cents per U.S. dollar, the strongest level since Nov. 9 2007, and traded at 94.47 cents at 3:04 p.m. in Toronto. It ended yesterday at 94.74 cents. One Canadian dollar buys $1.0585.

Crude oil futures gained 1.2 percent to $99.31 a barrel in New York.

 European Discussions

 European leaders met in Brussels seeking solutions for their 21-month sovereign debt crisis.

French President Nicolas Sarkozy reiterated support for the euro after the summit closed, saying it’s an “irreplaceable” achievement of Europe. He said a bailout fund will operate in secondary markets. Greece will receive additional aid of 109 billion Euros ($157 billion), according to the European Union.

Spooked by a bond market selloff last week, leaders empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after eight hours of talks in Brussels. The fund can also aid troubled banks and offer credit-lines to repel speculators. Leaders pledged a 160 billion euro aid package for Greece, eased the terms of its existing loans and cajoled bondholders into footing part of the bill.

“All eyes are on euro and what’s going on over there and their discussions,” C.J. Gavsie, managing director for foreign exchange trading at Bank of Montreal, said by phone from Toronto.

 Bonds Fall

 Canadian government bonds fell, pushing the yield on benchmark 10-year bonds five basis points higher to 3 percent. The price of the 3.25 percent security due in June 2021 fell 46 cents to C$102.15.

Consumer prices advanced 3.6 percent in June from a year earlier, after a 3.7 percent gain in May, Statistics Canada may report tomorrow in Ottawa, according to the median forecast of 24 economists in a Bloomberg News survey.

The Bank of Canada on July 19 kept its benchmark policy rate at 1 percent and said borrowing costs will rise, omitting the word “eventually,” which had appeared in previous statements. The bank also raised its forecast for inflation.

 “To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” Bank of Canada Governor Mark Carney said in remarks at a press conference yesterday.

The loonie has weakened 1.2 percent this year versus the currencies of nine other developed nations, according to Bloomberg Correlation-Weighted Currency Indexes.

 The S&P/TSX Capped Energy led gains among the benchmarks, adding 1.5% as oil jumped 73 cents, or 0.7%, to settle at $99.13 a barrel. Shares of Suncor Energy Inc.  gained 2.5%. The S&P/TSX Capped Financial Index rose 1.1% as shares of the Bank of Montreal added 1.2%.

 Industrial metals stocks tempered the gains, falling after HSBC’s China manufacturing Purchasing Managers’ Index fell to a 28-month low in July. China makes up a large portion of Canadian commodity exports. 

 The S&P/TSX Capped Metals and Mining Index lost 0.1% as copper futures lost 5 cents, or 1.2%, to settle at $4.38 a pound.

 (Reuters/Marketwatch)

  US

 U.S. stocks rallied, extending a weekly gain for the Standard & Poor’s 500 Index, as European officials announced a plan that will give additional aid to Greece and Morgan Stanley’s results beat estimates.

 Morgan Stanley jumped 11 percent after the world’s largest brokerage posted a smaller-than-estimated loss as trading revenue rose from the first quarter. Motorola Mobility Holdings Inc. soared 12 percent after Carl Icahn urged the handset maker to explore alternatives for its patents. Medco Health Solutions Inc. advanced 14 percent after Express Scripts Inc. agreed to buy the pharmacy-benefits manager for $29.1 billion.

 The S&P 500 added 1.4 percent to 1,343.80 at 4 p.m. in New York, extending its gain this week to 2.1 percent. The Dow Jones Industrial Average climbed 152.50 points, or 1.2 percent, to 12,724.41.

 “It’s a sigh of relief,” said Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, which manages $3.3 billion. “Progress on Europe’s debt situation is allowing the market to remain at these levels. All of the other satellite countries are looking to see how the EU settles the debt situation in Greece because it has ramifications for the European banks. It’s the framework for a package and the markets have reacted positively.”

Greece will receive additional aid of 109 billion euros ($157 billion), according to the European Union. Italian Prime Minister Silvio Berlusconi said the total value of a second Greek bailout is 160 billion euros. French President Nicolas Sarkozy said that measures agreed by euro-region leaders today to aid Greece will not be replicated to help other countries.

 Euro, Stocks

 The euro and equities strengthened as European Union said Greece will receive aid worth 160 billion euros ($230 billion) and leaders agreed to increase the power of their regional rescue fund to allow it to act on a precautionary basis, finance the recapitalization of banks and buy bonds in the secondary market.

The S&P 500 extended gains as the New York Times reported that President Barack Obama and House Speaker John Boehner were close to a “major budget deal,” boosting optimism the world’s biggest economy will avoid defaulting on its debt. Spokesmen for Obama and Boehner denied the report.

 The S&P 500 had its biggest rally since March on July 19 as Obama endorsed a bipartisan deficit-reduction plan from the so- called Gang of Six senators. The index declined 2.8 percent from a three-year high in April through yesterday amid speculation the sovereign debt crisis in Europe is spreading and concern U.S. lawmakers will fail to reach a deal on raising the debt limit before the Aug. 2 deadline, pushing the government closer to default.

S&P reiterated today that there is a 50 percent chance it will lower the U.S. credit rating within three months as lawmakers struggle to reach agreement.

 Earnings Season

 Earnings results have boosted U.S. stocks this week. Of the 100 S&P 500 companies that have reported earnings since July 11, 86 percent have exceeded analyst estimates, according to Bloomberg data.

Stock futures maintained gains after a report said more Americans than forecast filed claims for unemployment benefits last week. Applications for jobless benefits increased 10,000 last week to 418,000, Labor Department figures showed. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey.

 The Conference Board’s index of U.S. leading economic indicators rose 0.3 percent in June, topping the 0.2 percent median forecast in a Bloomberg News survey of economists, and a Federal Reserve gauge of manufacturing in the Philadelphia region showed stronger-than-forecast growth.

 (Bloomberg)

Have a wonderful evening everyone!

  

As Always,

  

 Kyle, for Carolann.

 

 

Dear Friends,

  

“If you have built castles in the air…

Your work need not be lost…

That is where they should be…

Now put foundations under them…”

-Henry David Thoreau

 

  

Photo of The Day:

 

Cyclists compete in the final leg of the 2011 Tour De France Championship (REUTERS)

  

Market Commentary

 Canada

Canada’s dollar advanced to the highest since May 2 against its U.S. counterpart on speculation the central bank will raise its benchmark rate from 1 percent as soon as September amid quickening inflation.

 The loonie, as the currency is also known, approached a three and a half-year high, as optimism that policy makers in Europe and the U.S. will address debt conflicts drove demand for higher-yielding assets. Bank of Canada Governor Mark Carney reiterated in a statement today that monetary stimulus will be withdrawn.

“The reality is that 1 percent is not a sustainable rate,” Firas Askari, head currency trader at Bank of Montreal’s BMO Capital unit, said by phone from Toronto. “It’s an emergency, accommodative rate, and Canada is not in a position that it requires this any further. The inflation numbers are concerning. In my mind there’s a high likelihood of a rate hike, if not two, by the end of this calendar year.”

 The Canadian currency gained 0.3 percent to 94.77 cents per U.S. dollar at 3:49 p.m. in Toronto, compared with 95.01 cents yesterday. It touched 94.57, close to the 94.46 it reached on April 29, the strongest since November 2007. One Canadian dollar buys $1.0552.

 Less Stimulus

 “To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” Carney said in opening remarks to today’s press conference after the release of the quarterly monetary policy report.

Yields on two-year Government of Canada bonds rose four basis points to 1.52 percent. The securities yielded 115 basis points more than equivalent-maturity Treasuries, from 102 basis points before the Bank of Canada statement. The spread was as wide this year as 121 basis points in January.

Today’s statement echoed another made yesterday when the central bank maintained its target rate for overnight loans between commercial banks at 1 percent, where it’s been since September. Previous statements had used the word “eventually” to describe the timing of rate increases.

 Rate Signal

 “The market’s initial take on the bank announcement yesterday was that the removal of the word eventually signaled some sort of intent,” Shane Enright, executive director at Canadian Imperial Bank of Commerce’s CIBC World Markets unit, said by phone from Toronto. “What the time frame on that is, who knows, but obviously it was taken out for a reason.”

Enright predicted the Canadian dollar could appreciate beyond the highs of 94.46 cents seen in April.

 “With the perception of our shift on the bank’s monetary policy outlook, I think the loonie can see 92 cents by the end of the summer,” BMO’s Askari said.

Inflation will average 2.8 percent between July and September and slow to 1.9 percent in the second quarter of next year, the Ottawa-based central bank said in its Monetary Policy report today. The so-called core rate, which excludes eight volatile items, will peak at 2.1 percent in the first quarter of 2012.

“We still think early 2012 before the Bank of Canada tightens,” Shaun Osborne, chief currency strategist at Toronto- Dominion Bank, said in an e-mail. He predicted the Canadian dollar will depreciate to parity by year-end.

Europe’s Bonds

 Spanish and Italian bond yields fell a second day before a summit tomorrow of European officials. The Dollar Index dropped after President Barack Obama praised a bipartisan Senate proposal yesterday for a $3.7 trillion debt-cutting plan as U.S. lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default.

“Even if we do have a few headlines which appease investors and calm the bonds markets in the short term, then we should see a bit of a risk rally,” said UBS’s Walker.

 Canadian wholesale sales increased 1.9 percent to C$47.6 billion ($50 billion) in May, the fastest rate in 18 months as sales of agricultural supplies and farm equipment surged, Statistics Canada said. Economists predicted sales would rise 0.1 percent, the median of 15 responses compiled by Bloomberg News.

“It was a big beat on wholesale sales in May and it should add to the optimism,” Jack Spitz, managing director of foreign exchange at National Bank of Canada, said by phone from Toronto. “Canada’s dollar is further supported by the global risk backdrop, which is pointing decidedly higher.”

 Chris Fournier (Bloomberg)

US

 U.S. stocks fell, a day after the best rally since March for the Standard & Poor’s 500 Index, as concern the government will fail to increase the debt limit overshadowed higher-than-estimated earnings at United Technologies Corp.  lost 1.8 percent as Boeing Co.  picked a rival engine maker to upgrade its 737 jet. Yahoo! Inc., Altria Group Inc.  and Johnson Controls Inc. lost at least 2.4 percent as results disappointed investors. Apple jumped 2.7 percent after record sales of iPads and iPhones lifted profit, helping the company join 89 percent of S&P 500 members topping estimates so far in the earnings season.

 The S&P 500 slipped 0.1 percent to 1,325.84 at 4 p.m. in New York after the yesterday surging 1.6 percent as President Barack Obama endorsed a bipartisan deficit-reduction plan from the so-called Gang of Six senators. The Dow Jones Industrial Average decreased 15.36 points, or 0.1 percent, to 12,572.06 after surging 202 points yesterday in its biggest gain of 2011.

 “There have been a couple of companies that have had some nice beats,” Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., which oversees about $80 billion, said in a telephone interview. “But the macro environment is weighing on things and people are still worried about the U.S. debt situation.”

 The S&P 500 has declined 2.8 percent from a three-year high in April amid speculation the sovereign debt crisis in Europe is spreading across the region and concern U.S. lawmakers will fail to reach a deal on raising the debt limit before the Aug. 2 deadline.

 Deficit Talks

 The proposal for a $3.7 trillion debt-cutting plan praised by Obama is facing resistance from House Republicans, as lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default. Obama plans to renew talks at the White House this week with congressional leaders as the Democratic-led Senate and Republican House pursue divergent paths toward ending the stalemate.

Blackstone Group LP’s Byron Wien said today in an interview on Bloomberg Radio that investors in the stock market do believe U.S. lawmakers will reach a deal on raising the nation’s debt limit as the likelihood that tax increases will be part of the plan increases.

 “There’s a residual feeling on the part of investors that somehow this will be solved,” said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world’s largest private-equity firm. “The point that the market was so excited about yesterday was that since it was a bipartisan group of six there was a possibility there could be revenue increases in addition to spending cuts – that’s key to getting an agreement.”

 Inyoung Hwang (Bloomberg)

Have a wonderful evening everyone!

  

As Always,

  

Kyle, for Carolann.

 

 

 

 

Dear Friends,

Photo of the Day:

Performers take part in the opening ceremony of the 14^th FINA World Aquatic Championships in Shanghai. REUTERS/Issei Kato.

Market Commentary:

CANADA

Canadian stocks rose, led by energy producers, after U.S. housing starts surged and companies including Mosaic Co. beat analysts’ profit estimates.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, gained 3.2 percent as crude oil advanced as much as 2.7 percent. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, increased 2.2 percent as copper futures climbed to a three-month high. Potash Corp. of Saskatchewan Inc. rose 2.8 percent after U.S. peer Mosaic surpassed its average earnings estimate by 9.5 percent, excluding certain items.

The Standard & Poor’s/TSX Composite Index gained 78.12 points, or 0.6 percent, to 13,332.26 at 1:48 p.m. in Toronto.

“We’ve got the first positive economic surprise in a long time in housing starts this morning,” Keith McLean, who oversees C$200 million ($211 million) as a managing partner at GMP Investment Management in Toronto, said in a telephone interview. “Even the bears coming into this period were expecting earnings to be solid, but the bears were looking for negative commentary on guidance, and we’re just not seeing that.”

The S&P/TSX rallied 52 percent from the first quarter of 2009 to yesterday as at least two-thirds of S&P 500 companies topped the average profit estimate in each quarter since then, according to Bloomberg data. Since July 11, 31 of 36 S&P 500 companies and all 5 S&P/TSX companies that have reported financial results have beaten the average forecast.

Beating Estimates

Companies including Bank of New York Mellon Corp., International Business Machines Corp., Novartis AG and UnitedHealth Group Inc. reported earnings that surpassed their average analyst estimates in Bloomberg surveys since the close of trading yesterday.

U.S. builders began work on 629,000 new homes in June, the most since January, compared with a revised 549,000 in May, the Commerce Department said today in Washington. Economists had forecast a rate of 575,000, the median of 71 estimates in a Bloomberg survey. Building permits increased 2.5 percent, more than 50 of 51 forecasts.

Fifty of 67 S&P/TSX energy companies advanced as crude futures climbed.

Canadian Natural increased 3.2 percent to C$40.75. Suncor Energy Inc., Canada’s largest oil and gas producer, rose 2.3 percent to C$38.42. Nuvista Energy Ltd., a western Canadian oil and gas producer, jumped 6.8 percent to C$9.91 after soaring as much as 8.8 percent, the most intraday in a year, earlier today.

Record Gain

PetroBakken Energy Ltd., which explores for light oil in Canada, rallied a record 14 percent to C$14.15, after closing yesterday at the lowest price since it began trading in October 2009. Petrobank Energy and Resources Ltd., PetroBakken’s parent company, surged 14 percent to C$14.97.

The country’s six largest banks each advanced as the S&P/TSX Banks Index rebounded from the lowest close since January.

Royal Bank of Canada, the country’s biggest lender by assets, increased 0.9 percent to C$52.93 for its first gain since July 4. Toronto-Dominion Bank, its largest competitor, climbed 0.6 percent to C$78.77. Manulife Financial Corp. , North America’s fourth-biggest insurer, rallied 1.2 percent to C$15.75.

An index of S&P/TSX base-metals and coal stocks rose as copper gained as much as 2.1 percent. Teck advanced 2.2 percent to C$50.09. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, increased 3.5 percent to C$136.64.

Potash, Agrium

Fertilizer producers climbed after Mosaic reported earnings and the U.S. said crop conditions in the country worsened last week. Potash Corp., the world’s largest fertilizer producer by market value, rose 2.8 percent to C$57.86. Agrium Inc., which also sells agricultural products, gained 2 percent to C$86.06.

The S&P/TSX Gold Index retreated the most in three weeks as the metal slipped after 10 days of gains in New York. Goldcorp Inc., the world’s second-largest producer by market value, lost 2.2 percent to C$51.63. Agnico-Eagle Mines Ltd., the fifth- largest Canada-based gold-mining company by revenue, decreased 4 percent to C$60.53. Silver Wheaton Corp., the country’s fourth- biggest precious-metals company by market value, fell 2.9 percent to C$36.93 as silver dropped.

Lake Shore Gold Corp., which operates in Ontario, plunged 14 percent to C$2.91 after cutting its 2011 production forecast by as much as 32 percent. Earlier today, the shares sank 19 percent, the most intraday since December 2008.

Forestry companies soared after the U.S. housing report indicated demand may strengthen.

West Fraser Timber Co., Canada’s largest forestry company, increased 4.2 percent to C$48.99. Canfor Corp., its biggest domestic peer, jumped 11 percent, the most intraday in 23 months, to C$11.86 a day after at least three analysts raised their ratings on the company. Sino-Forest Corp. (TRE), the Hong Kong- and Toronto-based company fighting a short seller’s assertions of financial manipulation, climbed 14 percent to C$4.02 after tumbling 13 percent yesterday.

-Matt Walcoff (Bloomberg)

US

Stocks surged, sending the Standard & Poor’s 500 Index to its biggest gain in four months, and Treasuries rallied amid optimism lawmakers were moving closer to a deal that would cut the U.S. budget deficit and avoid default. Oil helped lead gains in commodities and the dollar fell.

The S&P 500 jumped 1.6 percent to 1,326.73 at 4 p.m. in New York, its biggest gain since March 3. The S&P GSCI Index of 24 commodities advanced 1 percent as oil surged 1.6 percent to $97.50 a barrel. Ten-year Treasury note yields lost six basis points to 2.87 percent and the Dollar Index, a gauge of the currency against six major peers, slipped 0.4 percent.

Stocks added to an early advance and Treasuries climbed after President Barack Obama endorsed a deficit-cutting proposal by a bipartisan group of senators known as the “Gang of Six.” Earlier gains in global equities were triggered by higher-than- estimated results at companies from International Business Machines Corp. to Coca-Cola Co. and Novartis AG. “We’re getting positive news flow on two fronts today: the political front related to the national debt ceiling and we have the reports coming out of the earnings season,” Keith Wirtz, who helps oversee $18 billion as chief investment officer for Fifth Third Asset Management in Cincinnati, said in a telephone interview. “IBM’s release is one of the tone-setters for this week. A good earnings season might put a floor in this stock market.”

The S&P 500 erased yesterday’s 0.8 percent slide and rebounded from a three-week low. S&P 500 technology shares climbed 2.7 percent as a group, the most in a year, to lead gains among all 10 of the index’s main industries.

Earnings Season

IBM jumped 5.7 percent to an all-time high of $185.21 to lead gains in the Dow Jones Industrial Average, which surged 202.26 points, or 1.6 percent, to 12,587.42 in its first gain of more than 200 points this year. Coca-Cola Co. climbed 3.3 percent, Wells Fargo & Co. added 5.7 percent and Harley-Davidson Inc. rallied 8.9 percent after each reported higher-than- estimated results.

Goldman Sachs Group Inc. lost 0.7 percent after the fifth- biggest U.S. bank by assets reported second-quarter profit that trailed analysts’ estimates. Goldman Sachs was one of only five S&P 500 companies to post quarterly results that trailed estimates since the reporting season started. Per-share earnings have topped analysts’ estimates at 31 of the 36 companies in the S&P 500 that released earnings since July 11, according to Bloomberg data.

“Profits are finally shining through some of the daunting headlines and investors are taking notice,”Jack Ablin, chief investment officer for Chicago-based Harris Private Bank, which oversees $55 billion, said in a telephone interview. “IBM was a big one,” he said. It sent “a strong signal that companies can still thrive in an uncertain economic environment.”

Housing Starts

All 12 stocks in an S&P gauge of homebuilders advanced after U.S. housing starts increased more than forecast in June to the fastest pace in five months. Work began on 629,000 houses at an annual pace, up 14.6 percent from the prior month, figures from the Commerce Department showed. Housing starts were projected to rise to a 575,000 annual rate

News Corp.  shares rallied 5.5 percent. Chairman and Chief Executive Officer Rupert Murdoch told U.K. lawmakers that he wasn’t responsible for the phone-hacking scandal at the company’s News of the World newspaper, saying that the blame lies with the “people that I trusted to run it.”

Thirty-year U.S. bonds rallied, sending their yield down 13 basis points to 4.18 percent, after Obama endorsed a bipartisan deficit-cutting proposal as “broadly consistent” with his administration’s approach. The plan to shave about $3.7 trillion from the debt over 10 years put forward by the senators is “a very significant step,” Obama said. While the administration hasn’t yet had a chance to review the Senate proposal in depth, “we’re in the same playing field,” he said.

Deficit Plan

“We don’t have any more time to posture,” Obama said in remarks at the White House. Time is running out to raise the debt limit before Aug. 2, when the Treasury Department has said the U.S. risks going into default, a step that would roil financial markets, he said.

Cotton and corn rallied at least 1.5 percent to help lead gains in 18 of 24 commodities tracked by the S&P GSCI Index amid concern that hot, dry weather will hurt crop output. Gold futures lost $1.30 to settle at $1,601.10 an ounce after reaching an intraday record of $1,610.70 an ounce yesterday following a 10-day streak of gains, the longest rally since 1980.

Inyoung Hwang; Michael Regan (Bloomberg)

“The future belongs to those who believe in the beauty of their dreams.”

-Eleanor Roosevelt

   

As Always,

 Kyle, for Carolann.

 

 Please note that Carolann will be away from the office, returning on Monday, July the 25^th. 

Although out of town, she is easily accessible VIA mobile phone, should you require any assistance during this time.

 

 

 Photo of the Day:

A hare runs across the sixth green during the first round of the BritishOpen golf championship at Royal St George’s in Sandwich, southern England July 14, 2011. REUTERS/Kieran Doherty

Market Commentary:

Canada

(Reuters)

Toronto’s main stock market index retreated on Monday morning as sovereign debt fears triggered an exodus from riskier assets, though a record high for safe-haven gold tempered the decline.

European bank stress test results last Friday did little to calm fears that the euro zone crisis is getting worse, weighing on U.S. equities and other riskier assets. Concerns about the impact of the debt crises on global growth pushed down the price of oil, hitting Canadian oil and gas producers.

Energy shares slipped 0.5 percent and financials dropped 1.1 percent as investors focused Thursday’s emergency meeting of EU leaders to discuss a second bailout package for Greece.

In the United States, investors are nervous about the stalemate in Washington as the August 2 deadline looms for an increase in the statutory $14.3 trillion borrowing limit.

Royal Bank of Canada led the decliners, falling 1.4 percent to C$52.29, followed by Bank of Nova Scotia, down 1.4 percent at C$56.26 and Canadian Natural Resources, off 1.1 percent at C$39.32. “With the U.S. markets down so much it’s going to be hard for us to make headway. The one bright spot has been gold,” said John Kinsey, portfolio manager at Caldwell Securities, though he noted that the gold mining shares are still lagging the price of the commodity.

Gold prices rallied above $1,600 an ounce in Europe as spooked investors bought the metal as a haven from risk.

Goldcorp Inc was the most influential climber, up 2.3 percent at C$52.76, while Barrick Gold was close behind, advancing almost 2 at C$47.01.

 US

(Bloomberg)

U.S. stocks fell, extending losses from last week for the Standard & Poor’s 500 Index, amid concern American lawmakers will fail to reach a deal on the nation’s debt limit two weeks before a deadline.

Financial shares slumped the most among 10 S&P 500 industry groups, with European leaders planning a summit this week as they seek to contain the region’s debt crisis. News Corp. fell 3.7 percent after two people familiar with the matter said independent directors are questioning whether a leadership change is needed after a phone-hacking scandal. LinkedIn Corp. slid 5.7 percent after JPMorgan Chase & Co. cut its rating.

The S&P 500 lost 1.1 percent to 1,301.83, the lowest level on a closing basis since June 28, at 3:23 p.m. in New York. The Dow Jones Industrial Average slumped 129.50 points, or 1 percent, to 12,350.23. A default by the U.S. would cause more panic than the collapse of Lehman Brothers Holdings Inc. in 2008, former Treasury Secretary Larry Summers told CNN in an interview broadcast yesterday.

“It looks like more partisan fighting is delaying any debt-ceiling resolution,” Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc. in Boston, wrote in an e-mail. “Words being thrown around like ‘catastrophe and Armageddon’ are certainly not soothing investors’ confidence.”

House Speaker John Boehner, a Republican from Ohio, said his party wouldn’t accept any tax increases as he worked on a deal to lower the deficit. As negotiators near the Aug. 2 deadline for raising the $14.3 trillion U.S. debt ceiling, President Barack Obama, a Democrat, is pushing to close tax loopholes for the richest Americans and corporations and cut discretionary spending by government.

S&P 500’s Tumble

The bankruptcy of Lehman Brothers prompted the biggest collapse of global financial markets since the Great Depression. It drove the S&P 500 down 46 percent between September 2008 and March 2009. The index dropped 2.1 percent last week amid concern the debt crisis in Europe is spreading and American lawmakers are putting the nation’s top credit rating in jeopardy.

Equities declined today as Goldman Sachs Group Inc. economists led by Jan Hatzius, based in Germany, cut their forecasts for real U.S. economic growth to 1.5 percent in the second quarter and 2.5 percent in the third quarter, from 2 percent and 3.25 percent, respectively. Hatzius’s team, in a report received after markets closed on July 15, cited lower-than-estimated economic data including a drop in the Thomson Reuters/University of Michigan consumer sentiment index to “territory normally associated with recession.” The gauge decreased in July to 63.8, the weakest level since March 2009.

Dow Stocks Fall

The VIX, as the Chicago Board Options Exchange Volatility Index is known, surged as much as 12 percent to 21.93 today, heading for its highest close in a month. Last week, the index, which measures the cost of using options as insurance against declines in the S&P 500, soared 22 percent, the most in a week since May 6. Even with today’s drop, the S&P 500 is up 3.6 percent for 2011.

“We still think that the intermediate term trend is positive, but when the risk fears are out there, you’ve got these gap down days like today, all the bears come out and the fears are there,” Timothy Ghriskey, the chief investment officer at the Solaris Group LLC in Bedford Hills, New York, which manages $2 billion, said in a telephone interview.

Bank Stocks

Of the 30 stocks in the Dow, Bank of America Corp. the Charlotte, North Carolina-based bank, fell the most, sinking 2.7 percent to $9.74.

Other bank shares also tumbled after eight European lenders failed stress tests last week, driving the region’s bank shares below the value of their tangible assets for the first time in two years. Citigroup Inc. fell 2.4 percent to $37.45. Genworth Financial Inc. fell the most in the S&P 500, dropping 8.4 percent to $8.99.

The 81-member S&P 500 Financials Index which lost the most last week since Nov. 12, retreated 1.6 percent. Financial shares in the S&P 500 are trading at 12.6 times earnings, the lowest level since December 2007, data compiled by Bloomberg show.

Goldman Sachs Group Inc., Bank of America and Wells Fargo & Co. are all scheduled to report tomorrow morning that quarterly earnings grew at least 5 percent from a year ago.

More Earnings

More than 100 companies in the S&P 500 are scheduled to report quarterly results this week, including International Business Machines Corp. today, according to data compiled by Bloomberg. Technology companies from Yahoo! Inc. to Apple Inc. are set to post results tomorrow.

Among the 17 S&P 500 companies that posted results since July 11, 14 beat the average analyst estimate for per-share profit, data compiled by Bloomberg show.

MGIC Investment Corp. reported a per-share loss excluding some items that was almost eight times bigger than the average analyst estimate. Shares of the largest U.S. mortgage insurer declined 22 percent after sinking 27 percent, the most intraday since May 2009, to $4.66.

WebMD Health Corp., the medical-information company, fell 30 percent to $32.65 after reducing its 2011 forecast for profit and sales, citing an anticipated decline in advertising revenue.

‘Dead Money’

News Corp. slumped 3.7 percent to $15.06. Chairman and Chief Executive Officer Rupert Murdoch is struggling to control the destiny of the company he began building six decades ago after a trusted deputy was arrested and Scotland Yard’s top official quit.

“The company is at risk right now,” Porter Bibb, managing partner at Mediatech, a New York-based investment bank, said on Bloomberg Television’s “In Business with Margaret Brennan.” “News Corp. is a very good, very strong, very profitable company, but it’s in jeopardy, and the Street has called investing in News Corp. today dead money.”

LinkedIn fell 5.7 percent to $103.72 after JPMorgan cut its rating to “neutral” from “overweight.” The website focused on job seekers and recruiters has more than doubled since the shares began trading in May, and JPMorgan said it downgraded the stock based on “valuation rather than fundamental concerns.”

“To reach a port we must sail..Sometimes with the wind and sometimes against it..But we must not drift or lie at anchor..”
       – Oliver Wendell Holmes

 

 

Have a wonderful evening!

 

 Kyle, for Carolann

Dear Friends,

“Life is like a game of cards. The hand that is dealt you represents determinism; the way you play it is free will…”

-Jawaharal Nehru

  

  Photo of the Day:

Japan’s players celebrate with the trophy after the victory against the US in the Womans World Cup of Soccer Finale in Frankfurt. (REUTERS- Kai Pfaffenbach)

  

MARKET COMMENTARY

Canada

(Baystreet.ca)

The Toronto stock market hung onto a small gain late morning Friday amid rising oil prices.

 The S&P/TSX Composite Index approached noon ahead 34.83 points to 13,287.75 The Canadian dollar surged 0.64 cents to 104.78 cents U.S.

The energy sector rose as Suncor Energy climbed 34 cents to $37.94 and Canadian Natural Resources was ahead 32 cents to $39.62.

Copper futures were four cents higher $4.42 U.S. a pound and the base metals sector gained. Teck Resources rose 93 cents to $49.63 while Sherritt International declined 18 cents to $6.69.

 The gold sector was up as nervous investors pushed bullion prices further into record high territory for a ninth session. Kinross Gold added 12 cents to $16.49.

The financial sector was down as Royal Bank shed 51 cents to $52.84. CIBC said it will acquire a 41% equity interest in American Century Investments for $848 million U.S. Kansas City-based American Century is a major U.S. asset management company with $112 billion U.S. under management. CIBC shares gained 37 cents to $74.99.

 On the economic slate, Statistics Canada revealed that manufacturing sales fell by 0.8% in May from April, much worse than expected, with the auto industry not bouncing back yet from an April tumble, lent momentum by the earthquake and tsunami in Japan.

 The TSX Venture Exchange extended its gains by 11.34 points to 2,002.29, while the Nasdaq Canada index gained 4.85 points to 556.41.

In Toronto, losing subgroups outnumbered gainers eight to five. Health-care sagged 1%, while consumer discretionaries slipped 0.5% and telecoms fell 0.4%. Energy led the gainers, up 1.3%, metals and mining surged 1.2% and materials gained 0.5%. Utilities were flat at noon hour. Oil for August delivery added $1.51 to $97.20 U.S. a barrel.

Gold futures for August delivery dropped $3.40 to $1,585.90 U.S. an ounce.

   

US

 (Reuters) – Anxiety over the results of European bank stress tests drove down the euro against the dollar on Friday and kept a lid on equities on both sides of the Atlantic, despite strong earnings from Google and Citigroup.

 Gold slipped after hitting record highs this week, with some of the recent risk aversion easing. Worries about the persistent euro zone debt woes have weighed on markets, along with the prospect of a U.S. debt default.

 The stress tests on European banks are expected to show that as many as 15 lenders need more capital to withstand a prolonged recession, with criticism growing that the tests do not encompass the impact of a Greek default. The results are to be published at about 1600 GMT. 

Investors remain deeply concerned by Europe’s inability to find a broader solution to a debt crisis that could eventually lead to a series of sovereign defaults and have wide-ranging implications for public finances and banks worldwide.

“There’s a general sense of nervousness prevailing because of the stress tests,” said Boris Schlossberg, director of FX research at GFT in New York.

 The euro edged lower to $1.41251, down 0.1 percent, while on the week, the euro was down 0.6 percent versus the dollar.

 The FTSEurofirst 300 index of leading European shares was down 0.1 percent, while the MSCI All-Country World Index rose 0.1 percent.

 Wall Street stocks opened higher after both Citigroup and Google reported stronger-than-expected earnings, adding to optimism about corporate results for the second quarter. But the market pared gained on concern over the European bank stress tests and signs of weakness in the U.S. economy.

 U.S. consumer sentiment in early July fell to its lowest since March 2009 and manufacturing in New York state contracted unexpectedly, according to data released on Friday. Indexes are down for the week.

 The Dow Jones industrial average was up 23.72 points, or 0.19 percent, at 12,460.84. The Standard & Poor’s 500 Index was up 4.41 points, or 0.34 percent, at 1,313.28. The Nasdaq Composite Index was up 17.94 points, or 0.65 percent, at 2,780.61. 

Overnight in Asia, Japan’s Nikkei average closed 0.4 percent higher.

 The dollar was supported by some safe-haven buying due to the contraction in the New York state’s manufacturing index in July and the drop in a U.S. consumer sentiment index spurred some safe-haven buying of the greenback. The euro and some risk-sensitive currencies such as the Australian and New Zealand dollars fell against the dollar.

 But the focus remained squarely on the critical euro zone bank stress tests. They are expected to show that around 10-15 lenders have insufficient capital to withstand a prolonged recession.

 Traders, however, cited talk that banks in the euro zone failing the tests could actually be more than 20. “The key number is 15. If the number is higher than 15 banks, then that would create a disturbance in euro/dollar,” said Schlossberg of GFT.

 The euro has borne up relatively well against the dollar due to parallel concerns over the United States’ own debt troubles and hints further monetary easing could yet be on the cards there, potentially flooding global markets with dollars.  

Worries the euro zone debt crisis was spreading to Italy have driven Italian bond yields up half a percent since last Friday and slashed valuations of financial sector firms across the region.

U.S. Treasury prices rose as worries over the fallout from the prolonged debt crisis in Europe and stalled U.S. budget and deficit talks bolstered the safe-haven appeal of U.S. government debt.

 Benchmark 10-year Treasury notes US10YT=RR were trading 8/32 higher in price to yield 2.93 percent, down from 2.96 percent late Thursday.

 Spot gold was bid at $1,583.49 a troy ounce from $1,586.75 an ounce late in New York on Thursday when the precious metal hit a record high of $1,594.16.

(Additional reporting by Dominic Lau, Atul Prakash, William

James, Jessica Mortimer and Simon Jessop in London, and Edward

Krudy in New York; Graphics by Scott Barber and Vincent

Flasseur; Editing by Leslie Adler)

 

As Ever,

Kyle, for Carolann.

 

 

 

Dear Friends,

Tangents:

France celebrates Bastille Day today and it is a national holiday.  Bastille was a medieval fortress and prison in east Paris, the symbol of Bourbon despotism.  When it was stormed by a Parisian mob on this day in 1789, there were only 7  prisoners, but lots of gunpowder to fuel the French Revolution.  Its destruction came to have a unique place in French revolutionary ideology as marking the end of the ancient régime. 

On July 14^th, 1906, A.C. Benson wrote in his diary:  The scent and sound of the great lime tree, full of flowers and bees, came softly to us in the still afternoon.  How strange it is that the lime tree smells so perilously sweet, and yet that single blossom has hardly any fragrance – only a vegetable catkin sort of smell.

Here’s a great idea – saw it in today’s Globe & Mail:

Book lovers’ paradises

“Twice annually, Bill Gates schedules a week-long ‘reading retreat’ during which he does nothing but pore over the books and papers he’s set aside during the year,” Salon says.  “He’s not alone: The idea seems particularly popular in the U.K., where you can sign up at London’s School of Life to receive a customized book list (they have ‘bibliotherapists’ on staff to compile one based on a telephone consultation) and lodging in one of several modern country houses.”

 Photos of the day 

July 14, 2011

Nathalie zu Sayn-Wittgenstein of Denmark, riding Digby, competes in the FEI Grand Prix CDIO competition at the World Equestrian Festival CHIO in Aachen, Germany. Ina Fassbender/Reuters

A girl stands next to a section of a sand sculpture titled Andy Warhol by sculptors Inese Valtere-Ulande and Pedro Mira at the Festival of Sand Sculptures 2011 under the topic Masterpieces of World Culture at a beach near the Peter and Pawel Fortress in St. Petersburg, Russia. Alexander Demianchuk/Reuters

Market Commentary:

 

Canada

By Matt Walcoff

July 14 (Bloomberg) — Canadian stocks dropped for the first time in three days as energy and raw-materials producers fell on speculation the U.S. is unlikely to restart stimulus policies immediately.

Copper producer First Quantum Minerals Ltd. lost 3.1 percent after receiving a “reduce” rating from an analyst at Arbuthnot Banking Group Plc. Gabriel Resources Ltd., which is developing a gold and silver mine in Romania, surged 9.3 percent after getting government approval of its archaeological review.

BlackBerry maker Research In Motion Ltd. retreated 3.3 percent after an analyst at Needham & Co. cut his profit estimates for the company.

The Standard & Poor’s/TSX Composite Index slipped 72.02 points, or 0.5 percent, to 13,252.92. The index had advanced 0.6 percent before U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank won’t soon begin a third round of bond purchases, a strategy known as quantitative easing.

“Some people were paying attention to Bernanke’s comments yesterday that he was ready to ease monetary policy if the economy did slow,” Jeff Bradacs, senior investment analyst on a Manulife Asset Management team that oversees about C$1.7 billion ($1.8 billion), said in a telephone interview. “People were expecting QE3 from those comments, and now not.”

The S&P/TSX gained 0.7 percent yesterday as Bernanke told a Congressional committee the bank might renew stimulus policies if the economy stalls.                           

Speculation that the Fed might return to stimulus policies helped propel gold futures to a record high yesterday. The S&P/TSX Materials Index rallied 6 percent this month through yesterday as gold advanced 5.5 percent. Precious-metals companies make up 13 percent of Canadian stocks by market value, according to Bloomberg data.

Bernanke told a U.S. Senate committee today that higher inflation will discourage the central bank from restarting quantitative easing quickly. “We’re not prepared at this point to take further action,” he said.

Precious-metals producers fell as gold fluctuated after seven days of gains. Barrick Gold Corp., the world’s largest gold producer, decreased 1.3 percent to C$46.01. Agnico-Eagle Mines Ltd., Canada’s fourth-biggest company in the industry by market value, slipped 1.4 percent to C$62.07. Extorre Gold Mines Ltd., which explores in Argentina, slumped a record 14 percent to C$12.57 after Michael Gray, an analyst at Macquarie Group Ltd., cut his rating on it to “neutral” from “outperform.”                   

 Gabriel Resources Ltd., which is developing a gold and silver mine in Romania, soared 9.3 percent, the most since November, to C$8 after saying the country’s government has signed off on the company’s archaeological review of historic mining activity on the site.

Base-metals companies fell as copper and zinc futures dropped. Teck Resources Ltd., Canada’s largest producer of industrial metals and coal, declined 2.1 percent to C$48.70. HudBay Minerals, Inc., which mines copper and zinc in Canada, lost 2.3 percent to C$14.59.

First Quantum decreased 3.1 percent to C$131.21 after Gavin Wood, an analyst at Arbuthnot in London, set a 12-month price estimate for its U.K.-traded shares 14 percent below their closing price yesterday.

In a note to clients, Wood cited the shares’ performance since 2009 — they gained four times as much as the FTSE 300 Mining Index through yesterday — and the chance they may slump if copper retreats or new mines are delayed.                      

 Energy stocks declined as crude oil futures retreated the most in three weeks in New York. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 1.2 percent to C$37.60. Talisman Energy Inc., which operates in North America, the North Sea and Indonesia, decreased 2.1 percent to C$18.05.

The S&P/TSX Insurance Index slumped to the lowest level since June 17. Manulife Financial Corp., North America’s fourth- biggest insurer, lost 1.1 percent to C$16.03. Sun Life Financial Inc., Canada’s No. 3 insurer, fell for a seventh day, slipping 2 percent to an eight-month low of C$27.54 in Toronto Stock Exchange trading.

RIM declined 3.3 percent to C$26.18 after Charlie Wolf, an analyst at Needham & Co., cut his 2012 and 2013 profit estimates on the company. Unless the company improves its sales in the consumer market, “RIM is likely to become a shadow of its former self,” Wolf wrote in a note to clients.

Gildan Activewear Inc., Canada’s largest apparel maker, sank 4.6 percent, the most in seven months, to C$32.91. In a note to clients, Kenneth M. Stumphauzer, an analyst at Sterne Agee Group Inc., said his firm’s surveys indicate Gildan’s wholesale sales volumes dropped more than 10 percent in June.

US

By Nikolaj Gammeltoft and Victoria Stilwell

July 14 (Bloomberg) — U.S. stocks fell, driving the Standard & Poor’s 500 Index to the lowest level of the month, as Federal Reserve Chairman Ben S. Bernanke said he’s not prepared to take immediate action to stimulate the economy.

Raw-material producers, technology and industrial companies lost the most among the 10 main industries in the S&P 500 Index, which erased a gain of as much as 0.7 percent. Marriott International Inc. dropped 6.6 percent on a lower-than-estimated earnings forecast. JPMorgan Chase & Co. rallied 1.8 percent after investment banking profit surged and more customers paid their credit-card bills on time.

The S&P 500 slipped 0.7 percent to 1,308.87 at 4 p.m. in New York, its lowest level since June 29, as a stalemate continued in Washington on negotiations over the U.S. debt ceiling. The Dow Jones Industrial Average dropped 54.49 points, or 0.4 percent, to 12,437.12 after surging 90 points following JPMorgan’s report.

“The market is going to be volatile until we get the situation in Washington resolved,” said Don Wordell, a fund manager for Atlanta-based RidgeWorth Capital Management, which oversees about $48 billion. “Earnings have been coming in pretty good and corporate balance sheets are in great shape,” he said in a telephone interview. “The economic data reports were positive.”

Bernanke testified for a second day before lawmakers after saying yesterday he’s prepared to provide more stimulus if needed. Bernanke said today that inflation now is “higher” and “closer” to the central bank’s informal target than was the case in August and that’s one reason why the Fed won’t immediately embark on a third round of bond-buying. “We’re not prepared at this point to take further action,” he told the Senate Banking Committee.

The S&P 500 has rallied 93 percent since March 2009 as the Fed used large-scale asset purchases to buoy the economy and companies posted earnings that beat analysts’ estimates. The index has still fallen 4 percent since April 29 this year on concern the economic recovery is at risk and as Europe’s sovereign-debt crisis grows.

Stocks were also pressured today after Moody’s Investors Service said late yesterday the U.S. government may lose the Aaa credit rating it’s held since 1917 on concern the country’s debt limit will not be raised in time to prevent a missed payment of interest or principal. President Barack Obama is considering summoning congressional leaders to Camp David this weekend to work on a plan to raise the debt ceiling after yesterday’s negotiations on a deficit-cutting plan of at least $2 trillion stalled, two people familiar with the matter said.

“Rating agencies don’t tell us anything we don’t know, but Moody’s warning underlines the seriousness of the situation and the game of chicken at Capitol Hill,” said Philip Marey, senior U.S. economist at Rabobank in Utrecht, the Netherlands.

Equities gained early in the day as government data showed retail sales unexpectedly increased and jobless claims fell more than economists estimated. The 0.1 percent increase in retail sales reported by the Commerce Department compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010.

Separate data showed initial jobless claims fell by 22,000 to 405,000 last week. Industrial and technology companies retreated 1 percent each, while materials producers lost 0.9 percent.

Earnings are gaining attention as more companies post second-quarter results. S&P 500 profits are forecast to have grown 13 percent in the quarter, the smallest increase in two years, according to data compiled by Bloomberg.

Google Inc. jumped 11 percent to $585.97 at 4:58 p.m. in after-market trading in New York. The owner of the world’s largest Internet search engine reported sales and profit that topped analysts’ estimates, a sign the company is benefiting from an effort to expand into mobile and display advertising.

“The market is being driven by macro events such as the U.S. and European debt crises,” Giri Cherukuri, who helps manage $2.6 billion as money manager and head trader at Oakbrook Investments in Lisle, Illinois, said in a telephone interview.

“But we’re heading into the heart of earnings season, and people are getting ready for a change towards a market that’ll be focused on the earnings reports of major companies.”

Citigroup Inc., the third-largest U.S. bank, and Mattel Inc., the world’s largest toy maker, are among companies reporting earnings tomorrow.

JPMorgan, the second-largest U.S. bank, advanced 1.8 percent to $40.35 after the New York-based bank reported its highest half-year profit ever, at almost $11 billion. Second- quarter net income climbed 13 percent from a year earlier, to $5.43 billion, or $1.27 a share, six cents higher than the average estimate of analysts surveyed by Bloomberg.

MBIA Inc. jumped 9.2 percent to $10.02. Bank of America Corp., the biggest U.S. bank, has made a preliminary offer to the bond insurer aimed at settling a legal dispute tied to defective mortgages, according to two people briefed on the discussions.

ConocoPhillips jumped 1.6 percent to $75.61. The Houston, Texas-based oil company said it will separate its refining and marketing and exploration and production businesses.

Yum! Brands Inc. climbed 1.4 percent to $56.37 as the owner of the KFC and Pizza Hut restaurant chains boosted its earnings forecast for the year on increasing customer traffic at restaurants in China.

Hartford Financial Services Group Inc. declined 2.8 percent to $24.88. The seller of life insurance and property-casualty coverage said second-quarter net income plunged on catastrophe claims and the cost of asbestos liabilities.

Marriott International Inc. declined 6.6 percent to $34.69 after forecasting earnings that fell short of estimates. The largest publicly traded U.S. hotel chain said third-quarter earnings won’t be higher than 29 cents a share, missing the 30- cent average analyst projection.

Have a wonderful evening everyone.

Be magnificent!

“We ask ourselves

is it possible to break through this heavy conditioning of centuries immediately

and not enter into another conditioning – to be free,

so that the mid can be altogether new, sensitive,

alive, aware, intense, capable?”

 

-Krishnamurti, 1895-1986

As ever,

Carolann

 “Never let a problem to be solved become

more important than the person to be

loved.”

         -Barbara Johnson, 1947-2009

 

 Tangents:

 Summer Reading:

TOLSTOY AND THE PURPLE CHAIR: My Year of Magical Reading

by Nina Sankovitch

HarperCollins

When her older sister died, Nina Sankovitch was determined to both honor her life and ease her own grief by reading a book a day.  Sankovitch’s memoir stands as a tribute to the power of books to enrich our daily lives.  

Fiction:

STATE OF WONDER

by Ann Patchett     

Even better than “Bel Canto”?  That’s what at least one early reviewer says of Ann Patchett’s latest.  I loved Bel Canto, so this will be at the top of my list this week.  This new novel is set in the Amazon, where a young pharmaceutical worker has been sent by her boss (who also happens to be her lover) to investigate the death of a colleague.

All hard work leads to profit; but mere talk leads only to poverty.

                                                                  – Warren Buffett

Did You Know?  

The precise origin of the phrases “bull market” and “bear market” are obscure. The Oxford English Dictionary cites an 1891 use of the term “bull market”. In French “bulle spéculative” refers to a speculative market bubble. The Online Etymology Dictionary relates the word “bull” to “inflate, swell”, and dates its stock market connotation to 1714. 

One hypothetical etymology points to London bearskin “jobbers” (market makers), who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l’ours avant de l’avoir tué (“don’t sell the bearskin before you’ve killed the bear”)-an admonition against over-optimism.

By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit.                                                                      

Photos of the day 

July 13, 2011

A group of Sri Lankan young Buddhist monks parade, seeking alms in Colombo, Sri Lanka. In Buddhism, giving of alms is the beginning of one’s journey to Nirvana, the state of perfect bliss. Eranga Jayawardena/AP

Europcar rider Thomas Voeckler (2nd l.) of France, wearing the yellow jersey, rides with the pack during the 11th stage of the Tour de France 2011 cycling race from Blaye Les Mines to Lavaur, France. Pascal Rossignol/Reuters

Market Commentary:

 Canada

By Matt Walcoff

July 13 (Bloomberg) — Canadian stocks rose for a second day as financial and energy companies advanced on speculation the U.S. may return to stimulus policies and demand for a haven from debt crises propelled precious-metals producers.

Barrick Gold Corp., the world’s largest producer of the metal, increased 2.6 percent as gold futures climbed to a record. Cenovus Energy Inc., Canada’s fifth-largest energy company, increased 2.1 percent as U.S. oil inventories dropped.

Teck Resources Ltd., the country’s biggest base-metals and coal producer, climbed 1.1 percent after China reported faster economic growth than most economists in a Bloomberg survey had forecast.

“It’s a lack of confidence in terms of what’s happening to the euro,” said Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, which oversees C$300 million ($313 million). “The U.S. debt-ceiling debacle and the dysfunctional politics make people realize they need more tangible hard currency, adding to demand for precious metals.”

The Standard & Poor’s/TSX Composite Index rose 90.87 points, or 0.7 percent, to 13,324.94.

The S&P/TSX rallied 3.5 percent from a seven-month low on June 17 through yesterday as gold stocks jumped 9.9 percent.

Three of the world’s five largest gold companies by market value, and eight of the top 20, are Canadian, according to Bloomberg data.

Gold has surged 6.7 percent since July 1 as investors speculated the European debt crisis will spread beyond Greece and the Aug. 2 deadline for raising the U.S. debt ceiling to prevent default neared without an agreement among lawmakers.                      

Gold gained 1.5 percent while silver surged 7.1 percent, the most in 27 months, a day after Moody’s Investors Service cut Ireland’s credit rating to below investment grade. The U.S. dollar dropped the most in three weeks today against a basket of world currencies.

Barrick climbed 2.6 percent to C$46.62. Goldcorp Inc., the world’s second-biggest gold producer by market value, increased 2.5 percent to C$52.12, extending its July advance to 12 percent. Tahoe Resources Inc., which is developing a silver project in Guatemala, soared 14 percent to C$19.92.

North American Palladium Inc., a precious-metals producer in Ontario, jumped 18 percent, the most in 17 months, to C$4.51 after Leon Esterhuizen, an analyst at Royal Bank of Canada, raised his rating on the shares to “outperform” from “sector perform.”

Energy companies rose as natural gas futures advanced for a fourth day on forecasts for above-normal temperatures in the U.S. Stocks extended their gains after the U.S. reported a weekly drop in crude inventories more than twice as large as the median analyst forecast in a Bloomberg survey.

Cenovus climbed 2.1 percent to C$36.25. Trican Well Service Ltd., Canada’s largest oilfield-services company, rallied 5.4 percent to C$25.69. ARC Resources Ltd., which produces oil and gas in western Canada, increased 1.8 percent to C$24.50.

Trilogy Energy Corp., a western Canadian oil and gas producer, rallied 8.8 percent to a five-year high of C$27.45 after jumping 5.5 percent yesterday. Mark Polak, an analyst at Bank of Nova Scotia, called the stock a “top pick” July 11.

Producers of base metals gained after China, the world’s biggest user of the commodities, said its gross domestic product increased 9.5 percent in the second quarter from a year earlier. Economists had forecast economic growth of 9.3 percent, according to the median of 18 estimates in a Bloomberg survey.                    

Teck climbed 1.1 percent to C$49.73. Quadra FNX Mining Ltd., which produces copper in Canada, the U.S. and Chile, rose 3.1 percent to C$14.37. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, gained 2.3 percent to C$24.94.

Directory publisher Yellow Media Inc. sank 5.1 percent to C$2.25, extending its 2011 plunge to 64 percent, after Tim Casey, an analyst at Bank of Montreal, cut his rating on the stock to “underperform” from “market perform.” The shift to online listings from printed publications will reduce profit margins, Casey said in a note to clients.

Telus Corp., Canada’s third-largest wireless carrier, advanced 1.9 percent to C$54.27. Adam Shine, an analyst at National Bank of Canada, began coverage of the company with an “outperform” rating in a note dated yesterday. He cited the growth of the smartphone and wireless-data markets.

US

By Nikolaj Gammeltoft and Victoria Stilwell

July 13 (Bloomberg) — U.S. stocks pared gains, almost erasing a 164-point gain in the Dow Jones Industrial Average, after the Associated Press reported that House Speaker John Boehner said it’s a “crapshoot” whether the federal debt limit will be boosted if an agreement isn’t reached by Aug. 2.

AP later updated its story, quoting Boehner as saying “it’s a crapshoot” to determine what would happen if the limit isn’t increased. The Standard & Poor’s 500 Index advanced 0.3 percent to 1,317.72 at 4 p.m. in New York. Earlier, it climbed 1.4 percent after Federal Reserve Chairman Ben S. Bernanke said he’s prepared to provide more stimulus if needed and China’s economic growth beat estimates. The Dow rose 44.73 points, or 0.4 percent, to 12.491.61.

“The market took the reported information for what it is worth and traded off sharply on it,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees $354.9 billion. “The market has the potential to recover tomorrow based upon a restatement of what the speaker felt he said.”

Have a wonderful day everyone.

Be magnificent!

I see things with an intense joy,

and while I observe, there is no observer, only a beauty almost like love.

For an instant, I am absent, myself and my problems, my anxieties, my troubles: nothing but this wonder exists.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

Every great advance in natural knowledge has involved

the absolute rejection of authority.

  -Thomas H. Huxley, 1825-1895 

 

Dear Friends,

Tangents:

Lady Gaga complained that the U.S. is allowing Iran and North Korea to get nukes and we have to stop

them. Before the White House makes any decision, they’re waiting to hear from Britney Spears.

                                                                                                                       – Jay Leno

 

MORE TITLES FOR THE SUMMER’S BEST READS:

Non-Fiction:

THE HOUSE IN FRANCE by Gully Wells

Knopf Doubleday

A memoir by the daughter of a privileged London couple who owned a beloved summer home in France is an engaging glimpse into the lives of interesting Europeans in the 1960s.

THE MOST BEAUTIFUL WALK IN  THE WORLD: A Pedestrian in Paris by John Baxter

HarperCollins

Film critic and biographer John Baxter takes readers on various strolls through the streets of Paris, tracking both the city’s history and the many celebrated figures who have savored the art of walking in one of the world’s most beautiful cities.

Photos of the day

July 12, 2011

Flutes are played around a bonfire as the Orange Order celebrates a divisive annual holiday called The Twelfth in Glenarm, Northern Ireland. Paul Faith/AP

Former Nepalese Crown Princess Himani Shah offers prayers by lighting a butter lamp at the temple of Lord Ganesh in Kathmandu, Nepal. Navesh Chitrakar/Reuters

Market Commentary:

                                                           

Canada

By Matt Walcoff

July 12 (Bloomberg) — Canadian stocks rose for the first time in three days as gold advanced for a sixth-straight session and mining companies gained as investors sought havens from the European debt crisis.

Goldcorp Inc., the world’s second-largest producer of the metal by market value, increased 2.9 percent. Westport Innovations Inc., which develops natural-gas engine technologies, jumped 8 percent after energy producer Chesapeake Energy Corp. said it will form a fund to invest in its industry. Alimentation Couche-Tard Inc., the owner of Mac’s convenience stores, climbed 3 percent after beating analysts’ profit forecasts.

The Standard & Poor’s/TSX Composite Index increased 83.94 points, or 0.6 percent, to 13,263.69 at 2:26 p.m. in Toronto after sinking as much as 0.6 percent earlier today.

“There’s risk aversion with respect to what’s happening in Europe,” said Andrew Pyle, who helps manage C$200 million ($207 million) as an associate money manager at Bank of Nova Scotia’s ScotiaMcLeod unit in Peterborough, Ontario. “We’re seeing two streams of safe-haven flows right now, one to the U.S. dollar, and you’ve got gold going up.”

 The S&P/TSX dropped the most in five weeks yesterday as investors speculated the European crisis will spread to Italy and oil and base metals fell. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

The euro touched a four-month low against the U.S. dollar today as European finance officials considered remedies that would put Greece into temporary default, a move opposed by the European Central Bank.

In the U.S., President Barack Obama rejected Republican Party efforts    to focus on a scaled-down deficit-reduction deal, saying the country needs to both cut spending and raise taxes.

Stocks extended their advance after the U.S. Federal Open Market committee minutes showed some members at its June 21-22 meeting said more stimulus may be necessary.

Gold stocks contributed the most to the S&P/TSX’s rise among industries in the index as the metal rallied 0.8 percent.

Goldcorp gained 2.9 percent to C$50.23. Barrick Gold Corp., the world’s largest producer, advanced 2.4 percent to C$45.55. Rubicon Minerals Corp., which explores for gold in Ontario, rebounded 9 percent from a 22-month low to C$3.39.

Silver Wheaton Corp., the country’s fourth-biggest precious-metals company by market value, increased 5.1 percent to C$35.69 as silver rose in electronic trading.

 Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, climbed 5.4 percent to C$2.95 after David A. Talbot, an analyst at Dundee Securities Corp., said uranium companies are “showing positive momentum” four months after Japan’s earthquake and nuclear disaster.

“We are starting to see more positive news coming from the sector — indications that despite Fukushima, not all that much has changed regarding the supply-demand fundamentals of the sector,” Talbot wrote in a note to clients, referring to the stricken Japanese nuclear power plant.

Westport Innovations surged 8 percent to C$25.41 after Oklahoma City-based Chesapeake said it will invest $1 billion in companies that develop infrastructure or technology to increase the use of gas as a motor fuel. Westport shares have soared 20 percent since June 27, the day before it said it will work with General Motors Co., the largest U.S. automaker, on engine technologies.                       

Alimentation Couche-Tard Inc., the owner of Mac’s and Circle K convenience stores, rallied 3 percent to a record C$28.94 after reporting profit that beat the estimates of analysts in a Bloomberg survey. The company also raised its quarterly dividend by 25 percent.

An index of S&P/TSX telecommunications companies rose the most in three weeks as Canadian Radio-Television and Telecommunications Commission held hearings on BCE Inc.’s proposal to impose usage-based billing on independent Internet service providers. Tom Pentefountas, the CRTC’s vice chairman for broadcasting, asserted the union-backed organization fighting the changes is as self-interested as the large companies, the CBC said on its website.

 BCE gained 1.4 percent to C$38.29. Rogers Communications Inc., the cable television provider and wireless carrier, advanced 1.8 percent to C$38.57.

US

By Nikolaj Gammeltoft and Victoria Stilwell

 July 12 (Bloomberg) — A late rally in U.S. stocks faded, dragging the Standard & Poor’s 500 Index to a third straight loss, after Ireland’s downgrade to junk added to concern Europe is losing control of the credit crisis and overshadowed evidence the Federal Reserve hasn’t ruled out more stimulus.

Semiconductor-related shares slumped, with Intel Corp.falling 1.8 percent after Novellus Systems Inc. forecast lower- than-estimated third-quarter earnings. Alcoa Inc. slipped 1.3 percent after second-quarter profit missed analyst estimates. Cisco Systems Inc. jumped 1.1 percent after two people familiar with the matter said it would announce job cuts.

The S&P 500 dropped 0.4 percent to 1,313.64 at 4 p.m. in New York, after the index fluctuated between gains and losses throughout the day. The Dow Jones Industrial Average lost 58.88 points, or 0.5 percent, to 12,446.88.

“There’s not a whole lot of conviction in the market,” said Jason Brady, a managing director at Thornburg Investment Management in Santa Fe, New Mexico, which oversees about $80 billion in assets. “Most investors are following Europe, and they are waiting to see if the earnings season will be good enough for them to get excited about equity prices. If that doesn’t happen, then you can add corporate performance to the ugly mix.”

The benchmark index for U.S. equities gave up 2.5 percent during the previous two sessions, the most for the S&P 500 since March, as concern grew that Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. The gauge had climbed 5.9 percent over the previous two weeks, its biggest gain since October 2009. The rebound in July came after the S&P 500 tumbled 3.2 percent in May and June amid disappointing economic data.

The S&P 500 rallied as much as 0.6 percent today following the 2 p.m. release of minutes from the Federal Open Market Committee’s June meeting. The Fed report said policymakers continued to debate whether additional stimulus will be needed if the outlook for economic growth remains weak. Some members noted that the committee might need to consider further stimulus, while others voiced concern about an increased inflation risk that might warrant tighter monetary policy.

“The market rallied on the news that the Fed is certainly not ruling out further stimulus to further inflate the economy,” said Burt White, who helps oversee $330 billion as chief investment officer at LPL Financial Corp. in Boston. “We think it’s probably more hope than reality,” he said. “The backdrop is still difficult with the mess in Europe and a bumpy start to the earnings season with Alcoa.”                     

The rally fizzled late in the day as Ireland’s credit rating was cut to non-investment grade by Moody’s, joining Portugal and Greece to become the third euro-area country to be lowered to junk. Equities had recovered from losses of as much as 1.8 percent before the market opened on signs of progress in Europe.

Luxembourg Finance Minister Luc Frieden said selective default on Greek debt is not an option envisioned by euro-region finance ministers, while European Union Economic and Monetary Affairs Commissioner Olli Rehn said officials reached agreement that investors should play a role in a second bailout of Greece. EU President Herman Van Rompuy said he didn’t rule out calling an emergency summit on Greece, although no decision has been taken.

“We’re in a very volatile period for markets and investors are almost paralyzed because they don’t know where the safe haven is,” said George Feiger, chief executive offer of Contango Capital Advisors Inc., a San Francisco-based wealth management firm with about $3.5 billion in assets. “It’s caused by a conjunction of factors, including the risk that Europe and the U.S. can’t deal with their debt issues effectively.”                        

The S&P 500 is trading near the level of 1,316 that represents the convergence of the index’s mean price over the last 50 and 100 days, data compiled by Bloomberg show. Moving averages are cited by analysts who use price charts as points where buying may pick up or selling snowball as investors reconsider past decisions. The gauge’s 200-day level is 1,274, based on intraday swings.

Alcoa, the largest U.S. aluminum producer, swung between gains and losses after second-quarter profit excluding certain items of 32 cents a share missed the 33-cent average estimate of 14 analysts surveyed by Bloomberg. The stock lost 1.3 percent to $15.71 after rising as much as 1.2 percent.     Alcoa unofficially started the earnings season in the U.S. after exchanges closed yesterday. Others reporting this week include JPMorgan Chase & Co., Citigroup Inc. and Google Inc. S&P 500 profits are forecast to have grown 13 percent in the quarter, the smallest increase in two years, according to data compiled by Bloomberg.

Utility companies and health-care stocks gained the most among 10 S&P 500 groups today, climbing 0.5 percent and 0.1 percent, respectively, while industrials performed the worst, dropping 1 percent.                     

Novellus tumbled 11 percent to $31.75. Chairman and Chief Executive Officer Rick Hill said yesterday that profit before certain costs in the current period will be 60 cents to 75 cents a share for the maker of machinery used in semiconductor production. That compares with the average analyst estimate of 84 cents, based on a Bloomberg survey. Sales will be $300 million to $340 million, Hill said on a conference call, while analysts had predicted $360.7 million.

Chipmakers are showing a more cautious tone in orders from San Jose, California-based Novellus, and may hold off purchases until 2012, Hill said.

Semiconductor companies fell the most among 24 groups in the S&P 500, losing 2.8 percent. Intel, the world’s largest chipmaker, decreased 1.8 percent to $22.45. Microchip Technology Inc. tumbled 12 percent to $32.93 for the biggest retreat in the S&P 500. The maker of analog chips said sales and earnings for the quarter ended in June missed its forecasts.

Cisco, the largest networking-equipment company, rallied 1.1 percent to $15.60 for the biggest gain in the Dow. The company may cut as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, according to two people familiar with the plans. Motorola Solutions Inc. dropped 1.5 percent to $43.50.

Morgan Stanley cut the maker of bar-code scanners, walkie- talkies and other emergency-communication equipment to “equalweight” from “overweight.” Radiant Systems Inc. surged 30 percent to $27.99. The maker of software for retailers was acquired by NCR Corp. for $28 a share.

Have a wonderful evening everyone.

Be magnificent!

When one lives with concepts one never learns.  The concepts become static.

You may change them but the very transformation of one concept to another is still static, is still fixed.

But to have the sensitivity to feel, seeing that life is not a movement of two separate activities,

the external and the inward, to see that it is one, to realize that the inter-relationship is this movement,

is this ebb and flow of sorrow and pleasure and joy and depression, loneliness and escape,

to perceive nonverbally this life as a whole, not fragmented, nor broken up, is to learn.

 

-Krishnamurti, 1895-1986

 

As ever,

 Carolann

In the end, we will remember not the words

of our enemies, but the silence of

our friends.

             -Martin Luther King Jr., 1929-1968

 

Dear Friends,

Tangents:  Summer Reading –The List – Authors’ all-time favorite books:

Book critic and editor J. Peder Zane asked 125 writers – among them Stephen King, Jonathan Franzen, and Margaret Drabble – to pick their favorite books.  Here are the five most mentioned:

1. ANNA KARENINA, by Leo Tolstoy.  Many readers consider Tolstoy’s 1876 story of a Russian society woman who leaves her loveless marriage for a dashing paramour the single greatest novel ever written.

 

1. MADAME BOVARY, by Gustave Flaubert.  A bored, beautiful housewife is at the center of this 1857 tale of provincial adultery.  Some 150 years later, readers of both sexes still find themselves and their neighbors in its pages.

 

1. WAR AND PEACE, by Leo Tolstoy.  The book’s length (1,000-plus pages) may intimidate some, but many fans of this 1869 story of aristocratic Russian families and the Napoleonic invasion say they wish it would never end.

 

1. LOLITA, by Vladimir Nabokov.  This 1955 novel about a middle-aged literary scholar obsessed with a 12-year old girl is at least as infamous and it is famous.

 

1. ADVENTURES OF HUCKLEBERRY FINN, by Mark Twain.  His 1884 story of a boy traveling down the Mississippi with a runaway slave is widely considered the masterpiece of American literature.  And its language still makes it the book most challenged in US libraries.

 

                                                                                                                                                             -Marjorie Kehe

Photos of the day

July 8, 2011

The space shuttle Atlantis STS-135 lifts off from launch pad 39A at the Kennedy Space Center in Cape Canaveral, FL. The 12-day mission to the International Space Station is the last mission in the Space Shuttle program. Pierre Ducharme/Reuters

The pack passes under a bridge near Onzain during the seventh stage of the Tour de France cycling race over 135.5 miles starting in Le Mans and finishing in Chateauroux, central France. Christophe Ena/AP

Market Commentary:

 

Canada

By Matt Walcoff

July 8 (Bloomberg) — Canadian stocks fell, trimming a weekly gain, as oil and base-metals prices slipped after the U.S. reported an increase in its unemployment rate.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, dropped 1.6 percent after the U.S. Labor Department said non-farm employment increased last month by the least since September. Canadian Natural Resources Ltd., Canada’s second- biggest energy company by market value, declined 3.1 percent as crude oil lost the most in two weeks. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 2.6 percent as corn and wheat gained.

The Standard & Poor’s/TSX Composite Index decreased 34.3 points, or 0.3 percent, to 13,371.70, reducing its weekly advance to 0.5 percent.

The jobs data “put a real damper on the market,” said David Cockfield, senior vice president and managing director at Northland Wealth Management in Toronto, which oversees C$200 million ($208 million). “People were expecting better. There were various excuses for previous bad numbers — Japan, bad weather — and those excuses are starting to run off.”

The S&P/TSX rose seven of the previous eight days as European leaders took action to prevent a Greek default and a gauge of U.S. manufacturing surpassed economists’ forecasts. The index slumped 5 percent from the end of March as U.S. unemployment increased in April and May. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.                      

U.S. payrolls rose by 18,000 in June, less than all 85 economist estimates in a Bloomberg survey. The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent.

Unemployment in Canada was unchanged at 7.4 percent, the lowest since January 2009.

Crude oil futures retreated 2.5 percent after the release of the U.S. jobs report. Canadian Oil Stands Ltd., the largest owner of the Syncrude project, decreased 1 percent to C$28.01. Bonavista Energy Corp., a western Canadian energy producer, fell3.2 percent to C$28.15.

 Canadian Natural slumped 3.1 percent to C$40.36 after Thomas R. Driscoll, an analyst at Barclays Plc, cut his rating on the shares to “equal weight” from “overweight.” About 70 percent of the company’s capital spending “may be devoted to assets with unexciting rates of return,” Driscoll said in a note to clients.

All major base metals traded on the London Metal Exchange dropped, with copper declining from a 10-week high. Teck lost 1.6 percent to C$50.15. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 2.2 percent to C$136.20.                         

Corn rose 3.5 percent, extending the first weekly gain since May, as forecasts for hot, dry weather in the U.S. Midwest led to concern crops may suffer. Wheat advanced 2.6 percent.

Potash Corp. increased 2.6 percent to C$56.89. Agrium Inc., Canada’s second-largest fertilizer producer, climbed 1.5 percent to C$86.30. Viterra Inc., Canada’s biggest grain handler, rose 1.9 percent to C$10.92.

European Goldfields Ltd., which is developing mines in Europe, surged 11 percent to C$13.65 after receiving environmental approval for its projects in Greece. Shares of the Whitehorse, Yukon-based company soared 35 percent this week, the most since 2003.

Directory publisher Yellow Media Inc. tumbled 11 percent to C$2.40 after Scott Cuthbertson, an analyst at Toronto-Dominion Bank, cut his rating on the shares to “reduce” from “hold.”

US

By Nikolaj Gammeltoft

July 8 (Bloomberg) — U.S. stocks sank, pulling down the Standard & Poor’s 500 Index from a two-month high, as the weakest American job growth in nine months hurt companies most tied to the economy.

Financial and industrial companies led losses among 10 S&P 500 groups, dropping more than 1.2 percent. General Electric Co. and Bank of America Corp. fell at least 1.6 percent, the most in the Dow Jones Industrial Average, after the Labor Department reported job growth that was about one-sixth the median economist forecast. Google Inc. lost 2.7 percent as Morgan Stanley downgraded the shares.

The S&P 500 dropped 0.7 percent to 1,343.80 at 4 p.m. in New York, after falling as much as 1.4 percent. The index rose 0.3 percent this week, extending its two-week rally to 5.9 percent, the most since October 2009. The Dow Jones Industrial Average lost 62.29 points, or 0.5 percent, to 12,657.20 today.

“The report is exceedingly disappointing,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion. “It fell short of just about everyone’s expectations and it certainly has to disappoint equity investors. It wasn’t just a miss, it was a complete whiff.”

The S&P 500 Index retreated from within 0.8 percent of a three-year high after U.S. payrolls increased by 18,000 in June, less than the most pessimistic forecast in a Bloomberg News survey of economists, which called for growth of 105,000 on average. The jobless rate rose to a 2011 high of 9.2 percent.                        

Losses in companies reliant on economic growth today represented a reversal from the past three weeks. The Morgan Stanley Cyclical Index tracking manufacturers, commodity producers and transportation stocks rose 10 percent between June 16 and yesterday, beating the Morgan Stanley Consumer Index of drugmakers and grocers by 6.6 percentage points. Amid concern the debt crisis in European nations including Greece would slow global growth, the consumer index outperformed the cyclical index by 9.7 points between Feb. 17 and June 16.

The S&P 500 had climbed 6.7 percent since the start of last week as Greek lawmakers passed a five-year austerity package, qualifying the country for further aid, and yesterday’s report from ADP Employer Services showed U.S. companies added twice as many jobs as forecast in June.

The Morgan Stanley index of 30 cyclical stocks slumped 1.1 percent today, reversing two days of gains. Financial and industrial stocks lost 1.3 percent and 1.2 percent, respectively, the most among 10 industries in the S&P 500.

Shares of commodity companies slipped 0.7 percent.                         

Bank of America declined 2 percent to $10.70 and General Electric Co. fell 1.6 percent to $18.99 for the biggest losses in the Dow. Cisco, the world’s largest maker of networking equipment, slumped 1 percent to $15.74. Caterpillar Inc., the world’s largest maker of construction equipment, dropped 1.1 percent to $110.41.

Staffing companies declined after the U.S. job report showed that hiring by companies was the weakest since May 2010. Monster Worldwide Inc. sank 3.2 percent to $14.65. Manpower Inc. dropped 4.3 percent to $56.13.

“It means that we’re still a ways off from getting to where we should be,” Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said in an interview from Sun Valley, Idaho, with Bloomberg Television’s Betty Liu on the “In the Loop” program. “How fast the recovery will come, I don’t know. I see nothing that indicates any kind of a double dip.”                    

 The job report damped optimism about prospects for profit growth before the second-quarter reporting period starts next week. The earnings season unofficially kicks off on July 11 with Alcoa Inc., the first Dow company to release results. Corporate profits are forecast to have grown by 13 percent in the period, the smallest increase in two years, according to analyst estimates compiled by Bloomberg.

“We’ve had a very benign earnings pre-season without a lot of negative earnings warnings,” said Tim Hoyle, director of research at Radnor, Pennsylvania-based Haverford Trust, which manages $6.5 billion. “We remain positive on second-quarter earnings,” he said. “But if the jobs situation continues to be weak as it has been in the last two months, then there’s definitely going to be a downward revision.”

President Barack Obama said the job report shows that “we still have a long way to go and a lot of work to do to give people the security and opportunity they deserve.”

“We still have a big hole to fill” in replacing jobs lost during the recession, Obama said in a statement from the White House Rose Garden.                    

Google dropped 2.7 percent to $531.99 after the world’s biggest search engine had its analyst rating cut to “equal weight” from “overweight” at Morgan Stanley, which cited the risk of declining profit margins in 2011 and 2012 because of higher employee compensation costs and the uncertainty over the return on investments in social media.

Archer Daniels Midland Co. rose 1.9 percent to $31.04. Buffett may look at the world’s largest grain processor as Berkshire Hathaway seeks more acquisitions. ADM, based in Decatur, Illinois, is the “kind of company we look at,” Buffett said. General Dynamics Corp. and Exelon Corp. are also the types of companies he finds attractive, Buffett said in the Bloomberg Television interview.

Yahoo! Inc. slipped 1.3 percent to $15.61. Greenlight Capital Inc., the hedge fund run by David Einhorn, sold its stake in the Internet company for a “modest loss” over doubts surrounding the value of the company’s investment in China-based Alibaba Group Holding Ltd. Yahoo, Alibaba’s biggest investor, has lost 15 percent since May 10, the last day of trading before the Alibaba transaction was disclosed.

 Have a wonderful weekend everyone.

Be magnificent!

“Thought is crooked

because it can invent anything

and see things that are not there.

It can perform the most extraordinary tricks,

therefore it cannot be depended upon.”

 

-Krishnamurti, 1895-1986

As ever,

Carolann

“History is a collection of

agreed upon lies.”

  -Voltaire, 1694-1778