Author: Carolann

Dear Friends,

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

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

 

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

 

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

 

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

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

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

Photo of the day

June 22, 2011

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

Market Commentary:

 

Canada

By Matt Walcoff

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

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

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

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

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

US

By Rita Nazareth and Cecile Vannucci

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have a wonderful evening everyone.

Be magnificent!

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

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

-Swami Prajnanpad, 1891-1974

 

As ever,

 Carolann 

“Work and struggle and never accept

an evil that you can change.”

           -André Gide, 1869-1959

 

Dear Friends, 

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

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

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

— James Dent

 
Photos of the Day:

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

 

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

Market Commentary:

 Canada

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

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

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

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

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

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

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

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

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

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

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

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

(Reporting by Claire Sibonney)

US

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Be magnificent!

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

 As Always,

Kyle for Carolann

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

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

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

Photo’s of the day:

 

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

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

Market Commentary:

Canada

By Matt Walcoff 

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

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

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

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

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

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

Crude, Stocks

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

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

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

Juncker Gets Assurance

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

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

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

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

Euro ‘the Catalyst’

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

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

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

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

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

US

By Rita Nazareth

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

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

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

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

Greece Negotiations

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

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

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

Third Straight Gain

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

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

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

Falling Commodities

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

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

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

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

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

Italian-German Spread

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

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

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

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

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

 Be magnificent!

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

 As always, 

 Summer, for Carolann

 

 

 

Dear Friends, 

Tangents:

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

Photos of the day

June 17, 2011

 

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

 

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

Market Commentary:

Canada

By Matt Walcoff

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

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

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

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

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

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

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

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

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

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

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

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

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

 US

By Rita Nazareth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Have a wonderful weekend everyone.  Happy Fathers’ Day!

 Be magnificent!

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

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

and the hills hidden by the clouds.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 I think, therefore

Descartes exists.

   -Saul Steinberg, 1914-1999

 

Dear Friends,

Tangents: 

Today is Bloomsday, celebrating Irish writer James Joyce, and specifically his masterpiece, Ulysses :

-from Wikipedia:

Bloomsday is a commemoration observed annually on 16 June in Dublin and elsewhere to celebrate the life of Irish writer James Joyce and relive the events in his novel Ulysses, all of which took place on the same day in Dublin in 1904. Joyce chose the date because his first outing with his wife-to-be, Nora Barnacle happened on that day, when they walked to the Dublin urban village of Ringsend. The name derives from Leopold Bloom, the protagonist of Ulysses.

 -from Ulysses:

 A man of genius makes no mistakes.   His errors are volitional and are the portals of discovery. 

I was blue mouldy for the want of that pint.  Declare to God I could hear it hit the pit of my stomach with a click. 

Come forth, Lazarus!  And he came fifth and lost the job.

 Ineluctable modality of the visible.

 History is a nightmare from which I am trying to awake.

 Greater love than this, he said, no man hath that a man lay down his wife for a friend.  Go thou and do likewise.  Thus, or words to that effect, saith Zarathustra, sometime regius professor of French letters to the University of Oxtail.

Photos of the day 

June 16, 2011

People attend the White Dinner event in front of the Notre Dame Cathedral in Paris on Thursday. Participants attending the dinner, which takes place at a different place in Paris every year, are required to be dressed in white and bring their own food, drink, and cutlery to the event. Gonzalo Fuentes/Reuters.

A National History Museum employee shows an ancient coin during official presentation of 21,000 pieces of cultural artifacts, ancient coins, jewelry and other antiquities originating from Bulgaria, which are being unveiled at Sofia, Bulgaria, on Thursday. A Canadian court ruling decided that the antiquities were illegally exported from Bulgaria to Canada and will be returned and put in the care of the National History Museum. Valentina Petrova/AP.

A woman poses in her hat on Ladies Day, the third day of racing at Royal Ascot in southern England on Thursday. Suzanne Plunkett/Reuters.

Market Commentary: 

Canada

By Matt Walcoff

June 16 (Bloomberg) — Canadian stocks fell for a second day as raw-materials producers declined on concern Europe’s worsening debt crisis will slow the global economic recovery.

Goldcorp Inc., the world’s second-biggest producer of the precious metal by market value, slipped 2.6 percent as the U.S. dollar gained. Teck Resources Ltd., Canada’s largest base-metals and coal producer, dropped 2.4 percent after Greek Prime Minister George Papandreou sought a confidence vote, risking passage of budget cuts and asset sales. Potash Corp. of Saskatchewan Inc. lost 2.5 percent as the U.S. Senate voted to end an ethanol tax credit.

The Standard & Poor’s/TSX Composite Index decreased 106.46 points, or 0.8 percent, to 12,865.57 at 2:43 p.m. in Toronto.

“If you’re having European countries with large debt that they’re not able to address, that impacts global economic growth, and right now, the focus is on seeing economic growth deteriorate,” said Jennifer Dowty, the Toronto-based manager of the C$844.1 million ($856.4 million) Manulife Growth Opportunities Fund.

The Canadian stock benchmark slumped 6 percent this month through yesterday as U.S. employment and manufacturing data missed economists’ forecasts. Oil, copper, gold and silver all fell as the U.S. dollar gained.

The S&P/TSX Materials Index fell to the lowest intraday level since September. Twenty-nine of 33 gold stocks dropped, extending the S&P/TSX Gold Index’s year-to-date decline to 15 percent.                      

“There’s a lot of risk-aversion,” Dowty said. “People do not want to hold a gold stock, simply because it’s a stock. There’s company risk. There’s market risk.”

Goldcorp fell 2.6 percent to C$45.53. Kinross Gold Corp., Canada’s third-biggest producer of the metal, slipped 2.8 percent to C$14.69. Iamgold Corp., which mines in West Africa, South America and Quebec, declined 5.1 percent to C$18.32.

European Goldfields Ltd., which is developing gold and base- metals mines, slumped 8.2 percent to C$9.02, the lowest intraday since August.

China Gold International Resources Corp. rallied 4.6 percent to C$3.61 after closing at an 11-month low yesterday. Shares of the mining company had tumbled 22 percent in the two weeks ending yesterday as Sino-Forest Corp., which also operates in China, battled a short seller’s assertions of financial manipulation. Sino-Forest gained 3.4 percent from a five-year low to C$3.33 today.

For a second-straight day, all major base metals traded on the London Metal Exchange retreated.                    

Teck lost 2.4 percent to C$44.30. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 3.2 percent to C$117.50. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, slipped 4.1 percent to C$21.71. Energy and financial stocks rose after the U.S. reported fewer initial jobless claims and more housing starts and building permits than most economists had forecast.

Evertz Technologies Ltd., which makes electronics for broadcasters, sank 19 percent, the most in 39 months, to C$13.13 after reporting fourth-quarter earnings that missed the average analyst estimate by 35 percent, excluding certain items.

Potash Corp., the world’s largest fertilizer producer by market value, slid 2.5 percent to C$51.41 as corn futures fell for a fourth day. The U.S. Senate voted to eliminate a 45-cent- a-gallon tax credit.

Air Canada jumped 7 percent to C$2.15 after reaching a tentative agreement with the Canadian Auto Workers to end a strike of call-center, check-in and gate staff. The shares surged as much as 9 percent intraday, the most in 10 months.

US

By Rita Nazareth

June 16 (Bloomberg) — U.S. stocks rebounded, a day after the Standard & Poor’s 500 Index declined to a three-month low, as better-than-estimated housing starts and jobless claims reports tempered concern about a slowdown in the economy.

A gauge of 12 homebuilders in S&P indexes rallied 1.6 percent. Kroger Co. advanced 4.5 percent after the largest U.S. grocery chain raised its full-year profit forecast. Southern Union Co. soared 18 percent as Energy Transfer Equity LP agreed to buy it for $4.2 billion in the largest purchase of a pipeline company this year. Benchmark indexes erased gains earlier today amid concern big banks will face larger capital increases to comply with proposed international regulations.

The S&P 500 rose 0.2 percent to 1,267.64 at 4 p.m. in New York. The benchmark gauge for American equities is still up 0.8 percent this year. The Dow Jones Industrial Average advanced 64.25 points, or 0.5 percent, to 11,961.52 today.

“We’re bullish,” said Linda Duessel, the Pittsburgh-based equity market strategist at Federated Investors, which oversees $354.9 billion. “The market doesn’t believe that we’re going into a recession. It’s a soft patch. We should bounce back up.”

The S&P 500 has fallen 7 percent from this year’s high at the end of April amid concern about an economic slowdown.

Equities slumped as reports showed business activity cooled more than forecast, sales of existing homes unexpectedly declined and growth in industrial production stopped. The S&P 500 yesterday traded at 12.7 times forecast 2011 earnings, the lowest multiple in almost a year, according to data compiled by Bloomberg.

“We’re really oversold,” Steven Leuthold, founder of Leuthold Group LLC, said in an interview with Betty Liu on “In the Loop” on Bloomberg Television. “We’ve gone too far, too fast. There’s going to be some kind of a shift in confidence here. We’re probably close to an area where we’re going to get some significant bounce.”

Stocks rose after a report showed that jobless claims declined by 16,000 to 414,000 in the week ended June 11. Economists surveyed by Bloomberg News projected 420,000 filings, according to the median forecast.

Work began on 560,000 houses at an annual pace, up 3.5 percent from the prior month and exceeding the 545,000 median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Building permits, a sign of future construction, also increased.

Stocks briefly erased gains after a report showed that manufacturing in the Philadelphia region unexpectedly shrank in June for the first time in nine months, raising the risk that factory production may contribute less to the expansion.

Homebuilders advanced. D.R. Horton Inc. rose 1.6 percent to $10.96. Lennar Corp. climbed 2.1 percent to $17.24. Home improvement retailers also gained. Home Depot Inc. increased 1.8 percent to $34.50.

Kroger rose 4.5 percent to $23.99. Earnings will be as much as $1.95 a share, Cincinnati-based Kroger said today. That compares with a previous forecast of up to $1.92. Analysts on average anticipate $1.90, according to a Bloomberg survey.

Southern Union soared 18 percent to $33.21. Shareholders of Houston-based Southern Union will get new units worth $33 each, representing a 17 percent premium to yesterday’s closing price. Energy Transfer also will assume $3.7 billion of debt.

Stocks also erased gains earlier today after people familiar with the matter said international financial supervisors are considering capital surcharges of as much as 3.5 percentage points on the largest banks if they grow bigger.

Draft plans circulated before a meeting next week of the Basel Committee on Banking Supervision would subject banks to a sliding scale depending on their size and links to other lenders, said the people, who declined to be identified because the proposals aren’t public. Banks wouldn’t initially face the highest surcharge, which is intended as a deterrent to expansion, one person said. The largest banks may face a 3 percentage point levy at their current sizes, the person said.

Citigroup Inc. retreated 1 percent to $37.63. JPMorgan Chase & Co. declined 0.8 percent to $40.36.

“We need the banks for the economy to recover,” said Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York. “If the capital requirements are too restrictive, some banks may have to raise more capital. If restrictions are more severe than expected, that may also prevent banks from lending as much as people want them to do.”

Finisar Corp. slumped 16 percent to $14.84. The maker of fiber-optic transmission gear reported fourth-quarter revenue of $236.9 million, missing the average analyst estimate of $243 million. Rivals JDS Uniphase Corp. declined 5.8 percent to $15.57, while Ciena Corp. dropped 4.7 percent to $17.26.         

Pandora Media Inc. tumbled 24 percent to $13.26, erasing yesterday’s gain, amid concern that competition may stymie efforts by the online-radio company to reach profitability.

Individual investors and newsletter writers are the most bearish on U.S. stocks since at least August, a sign the six- week slump may be nearing an end, according to analysts who use charts to predict markets.

The 7.2 percent drop in the S&P 500 since its April high through yesterday has turned more investors pessimistic as economic reports stoked concern the economy is slowing. A survey from the American Association of Individual Investors showed bears outnumbering bulls by the biggest margin since August. The ratio of bullish-to-bearish publications in Investors Intelligence’s survey was the lowest since September.

“We have some fear in the market,” Katie Stockton, MKM Partners’ chief market technician, said in an interview from Greenwich, Connecticut. “It’s a good thing from a contrarian perspective in that a market low typically is established when there is fear in the market.”

 Have a wonderful evening everyone.

 Be magnificent!

We have at the present moment everybody claiming the right of conscience without going through any discipline whatsoever that there is so much untruth being delivered to a bewildered world.

Truth is not to be found by anybody who has not got a sense of humility.

If you would swim on the bosom of this ocean of Truth

you reduce yourself to a zero.

 -Mahatma Gandhi, 1869-1948

 As ever,

Carolann

 “The artist, like the God of creation, remains within orbehind or beyond or above his handiwork, invisible, refinedout of existence, indifferent, paring his fingernails.” 

                             -James Joyce, 1882-1941

                     A Portrait of the Artist as a Young Man     

Dear Friends,

Tangents: 

Richard Stengel, Managing editor of Time  magazine, commencement address to Wheaton College graduating class of 2011: 

What I try to do every day in my job – and what I hope that you’ve learned over the last four years – is how to sort out the signal from the noise, how to separate the wheat from the chaff, how to separate information from knowledge and, even more importantly….how to create knowledge out of information….

One of the things I am certain about is that certainty and democracy don’t go together.  If you look at the leaders of the last 10 years who have had ironclad certainty, who are they?  Joseph Stalin, Fidel Castro, Saddam Hussein, Hosni Mubarak, Muammar Qaddafi.  Totalitarianism is the place for certainty, not democracy….

Democracy is based on doubt.  It’s based on wondering.  It’s based on questioning: Are we doing the fair thing?  Are we doing the right thing?  Are we doing the just thing?  It’s not about certainty.  So I’m telling you today: Beware of certainty.  Beware of ideas and theories that cannot be tested.  Beware of people who know that they’re right.

We’re going to win Game 7.

– Vancouver Canucks forward Daniel Sedin less than an hour after Game 6

 Full moon tonight.

Photos of the day 

June 15, 2011

Statues of angels fixed at the St. Isaak’s Cathedral are silhouetted on the full moon in St. Petersburg, Russia. Dmitry Lovetsky/AP

A robin delivers a mouthful of worms to a nest full of its baby birds, in North Andover, Mass. Mary Schwalm/AP

Market Commentary:

Canada

By Matt Walcoff

June 15 (Bloomberg) — Canadian stocks fell, led by banks and energy producers, as European leaders failed to agree on a new bailout for Greece and data on manufacturing and industrial production in the U.S. trailed economists’ forecasts.

Toronto-Dominion Bank, Canada’s second-biggest lender by assets, declined 1.2 percent after U.S. industrial production gained less than most economists had estimated. Suncor Energy Inc., the country’s largest oil and gas producer, dropped 2.6 percent as crude oil futures retreated the most in a month.

Breakwater Resources Ltd., a mining company with operations in Canada, Honduras and Chile, soared 43 percent after agreeing to be bought by Nyrstar NV.

The Standard & Poor’s/TSX Composite Index lost 125.79 points, or 1 percent, to 12,972.03.

“We’ve been getting some numbers that aren’t as robust as people would have liked,” said Jennifer Radman, a money manager at Caldwell Investement Management Ltd., which oversees about C$1 billion ($1 billion). “It’s hard to really tell where the economy’s going.”

The S&P/TSX fell 5.1 percent this month through yesterday as data on U.S. employment and manufacturing trailed economists’ forecasts. Seventy-five percent of Canada’s exports went to the U.S. last year, according to Statistics Canada.

A monthly index of manufacturing in New York, northern New Jersey and Connecticut dropped to the lowest level since November, the Federal Reserve Bank of New York said today.

National industrial production climbed 0.1 percent in May, the Federal Reserve said in Washington, missing the median economist forecast of 0.2 percent.

European finance officials meeting in Brussels were unable to break a deadlock on how to enroll investors in a second Greek bailout without causing a default. Greek Prime Minister George Papandreou will name a new government tomorrow and call a vote of confidence in parliament as he seeks to pressure rebel lawmakers to back the austerity plan that aims to secure a new bailout.

All S&P/TSX banks and all but one insurer dropped. TD, which has more than 1,000 U.S. branches, declined 1.2 percent to C$78.48. Royal Bank of Canada, the country’s largest lender by assets, slipped 1.1 percent to C$53.78. Bank of Nova Scotia, the No. 3 bank in the country, lost 0.8 percent to C$57.23.

Crude futures retreated to the lowest price since Feb. 22.

Suncor decreased 2.6 percent to C$37.36. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, fell 2.5 percent to C$28.01. Crescent Point Energy Corp., a western Canadian oil and gas producer, dropped 2.3 percent to C$43.03. Oil-sands developer BlackPearl Resources Inc. slumped 5.5 percent to C$6.19.

Breakwater, which mines base and precious metals, surged 43 percent to C$7.42, reaching a three-year high after Nyrstar agreed to buy it for C$7 a share, plus a special dividend of 50 Canadian cents a share. Nyrstar, based in Balen, Belgium, is the world’s largest maker of refined zinc.

All of the major base metals traded on the London Metal Exchange declined. Teck Resources Ltd., Canada’s largest company in the industry, lost 1.9 percent to C$45.40. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, decreased 1.5 percent to C$121.40. Mercator Minerals Ltd., which mines molybdenum and copper, sank 6.9 percent to C$2.56, an eight-month low.

Fertilizer producers declined as wheat and corn futures retreated. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, lost 1.3 percent to C$52.80. Agrium Inc. decreased 2.7 percent to C$81.42.

Sino-Forest Corp., the forestry company fighting a short seller’s assertions of financial manipulation, slumped 4.2 percent to C$3.22 after closing at a five-year low yesterday.

The shares have plunged 82 percent since the day before Carson Block, the founder of Muddy Waters LLC, said Sino-Forest’s stated land holdings do not match Chinese city records. The company has denied the assertions.

Mining company China Gold International Resources Corp. tumbled 8.5 percent to C$3.45, extending its monthly decline to 22 percent. An index of China-focused companies traded in Canada, other than Sino-Forest, has sunk 20 percent in May.

Other gold producers advanced as the European debt crisis led investors to seek out safe havens. Goldcorp Inc., the world’s second-largest gold producer by market value, increased 2.5 percent to C$46.76. Barrick Gold Corp., the biggest company in the industry, rose 1.2 percent to C$43.05.

Air Canada, the country’s largest airline, gained 6.4 percent to C$2.01 to extend its two-day surge to 12 percent, the most in 10 months. The Canadian government may introduce legislation to end a strike by call-center, check-in and gate staff tomorrow, Labor Minister Lisa Raitt said today outside Parliament. 

US

By Rita Nazareth

June 15 (Bloomberg) — U.S. stocks fell, threatening the 2011 gain for the Standard & Poor’s 500 Index, on concern Greece will default and signs the American economy is cooling down.

Wells Fargo & Co. and Bank of America Corp. slid at least 1.7 percent, following losses in European lenders, as officials failed to agree on a rescue plan for Greece. Alcoa Inc. and Exxon Mobil Corp. sank more than 2.1 percent as commodities slumped. The Morgan Stanley Cyclical Index of companies most- tied to the economy fell 2 percent on lower-than-forecast data on manufacturing, industrial output and homebuilder confidence.

The S&P 500 slumped 1.7 percent to 1,265.42 at 4 p.m. in New York, trimming this year’s gain to 0.6 percent. The Dow Jones Industrial Average fell 178.84 points, or 1.5 percent, to 11,897.27. Both indexes dropped to the lowest levels since March. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against the S&P 500’s declines, surged 17 percent to 21.32.

“It’s a classic ‘risk-off’ day,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees $859 billion. “They keep talking about kicking the can down the road in Europe. The can is getting heavier and heavier. The dollar-euro trade is on. The economy is in a slow patch. The weaker economic data should put some pressure on commodity prices.”

The S&P 500 has fallen 7.2 percent since this year’s high at the end of April amid concern about an economic slowdown. Energy, financial and raw material companies led the decline, falling at least 9 percent. The S&P 500 traded at 12.7 times forecast 2011 earnings, the lowest multiple in almost a year.

Stocks from Hong Kong to London and Sao Paulo slumped today as European officials failed to agree on a rescue plan for Greece. Greek Prime Minister George Papandreou will name a new government tomorrow and call a vote of confidence in parliament as he seeks to pressure rebel lawmakers to back the austerity plan that aims to secure a new bailout.

The European Central Bank said the threat of the Greek debt crisis spilling over into the banking sector is the biggest risk to the region’s financial stability.

“Greece could have a contagion effect,” ECB Vice President Vitor Constancio said at a briefing in Frankfurt today, when presenting the bank’s semi-annual Financial Stability Review. “That’s the reason why we are against any sort of default with haircuts and any form of private-sector event that could lead to a credit event or a rating event.”                         

Benchmark gauges also fell as a report showed that manufacturing in the New York region unexpectedly shrank in June, a sign the industry still faces parts shortages following the disaster in Japan. Another report showed that confidence among U.S. homebuilders slumped in June to the lowest level in nine months as executives turned more pessimistic on the outlook for sales, a sign that any pickup will take time to develop.

Separately, figures from the Federal Reserve showed that industrial production in the U.S. rose less than forecast in May. The cost of living in the U.S. increased more than forecast last month, reflecting higher prices for everything from autos to hotel rooms, another report showed.

“The market will sell first and ask questions later,” said Mark Luschini, chief investment strategist at Philadelphia- based Janney Montgomery Scott LLC, which manages $54 billion. “The latest figures are cementing this mushy patch of economic data. Unless we get a data point or two that stops showing erosion, the stock market will be under some pressure.”                         

 The KBW Bank Index fell 1.6 percent as 23 of its 24 stocks retreated. Wells Fargo, the largest U.S. home lender, dropped 1.7 percent to $26.55. Bank of America slid 2.8 percent to $10.50.

Gauges of energy and raw material producers in the S&P 500 declined at least 2.2 percent as the dollar rose, reducing the appeal of commodities as alternative investments. The Thomson Reuters/Jefferies CRB Index of 19 commodities decreased 2.3 percent. Alcoa, the largest U.S. aluminum producer, retreated 2.9 percent to $14.96. Exxon declined 2.1 percent to $78.66.

Ford Motor Co. decreased 2.1 percent to $13.15. The automaker said pretax profit will be lower in the second half than in the first half as the company faces rising structural and commodities costs.

Owens-Illinois Inc. dropped 14 percent to $25.54 for the biggest retreat in the S&P 500. The world’s biggest maker of glass bottles lowered its forecast for second-quarter profit margin because of higher costs and weaker demand in Australia, where it may idle a glass furnace.                         

J.C. Penney Co. slumped 3.5 percent to $34.12. The third- largest U.S. department-store chain has earnings risk over the next several quarters because of market share loss, excess inventory and the inability to raise prices in a cost inflationary environment, according to Morgan Stanley.

Pandora Media Inc. surged 8.9 percent to $17.42. The online-radio company gained as much as 63 percent on its first day of trading, a sign of accelerating demand for the limited number of Internet companies issuing shares.

The Oakland, California-based company leapt to $26 after its debut on the New York Stock Exchange, under the symbol P. It sold 14.7 million shares yesterday at $16 apiece, raising $234.9 million in its initial public offering. That was above the top of the range of $10 to $12.

 Have a wonderful evening everyone.

 Be magnificent!

 When you abandon every desire that rises up within you,

and when you become content with things as they are, then you experience inner peace.

When your mind is untroubled by misfortune, when you desire no pleasures,

when your emotions are tranquil, and when you are free from fear and anger,

then you experience inner calm.  When you are free from all attachments,

when you are indifferent to success and failure,

then you experience inner serenity.

When you can withdraw your senses from pleasures of the senses,

just as a tortoise withdraws its limbs,

then you experience inner wisdom.

 -The Bhagavad Gita

 

As ever,

 Carolann

  Life’s under no obligation to give us

what we expect.  We take what we

get and are thankful it’s no worse

than it is.

    -Margaret Mitchell, 1900-1949

          Gone With the Wind 

Dear Friends, 

“Congratulations, class of 2011,” words that have been repeated many times in the past few weeks.  I love reading the commencement speeches this time of year….lots of inspiring words.  The Nobel Peace Prize laureate, Elie Wiesel, addressed Washington University graduates in St. Louis: 

        The greatest commandment – to me – in the Bible is not the Ten Commandments.  First of all, it’s too difficult to observe.  Second, we all pretend to observe them.  My commandment is, “Thou shall not stand idly by.”  Which means when you witness an injustice, don’t stand idly by.  When you hear of a person or a group being persecuted, do not stand idly by.  When there is something wrong in the community around you – or far away – do not stand idly by.  You must intervene.  You must interfere.  And that is actually the motto of human rights….When you are now going into a world which is hounded, obsessed with so much violence, often so much despair – when you enter this world and you say the world is not good today, good!  Correct it!  That’s what you have learned here for four years from your great teachers.  Go there, and tell them what you remember.  Tell them that the nobility of the human being cannot be denied.

Photos of the day

June 14, 2011

Przewalski’s horses graze on a meadow at a farm in the village of Dolni Dobrejov near the city of Tabor, Czech Republic. Przewalski’s Horse or the Dzungian Horse – is one of the last wild horses in the world. Petr Josek/Reuters

Racegoers wait for The St James’s Palace Stakes on the first day of the Royal Ascot race meeting in southern England. Eddie Keogh/Reuters

Elderly men talk each other while looking at the bronze head of Bucephalus, the horse of Alexander the Great, behind a fence of a construction site on the main square in Macedonia’s capital Skopje. Boris Grdanoski/AP

 

Market Commentary:

 Canada

By Matt Walcoff

June 14 (Bloomberg) — Canadian stocks advanced for the first time in three days after the U.S. reported a smaller drop in retail sales than most economists had forecast.

Royal Bank of Canada, the country’s largest lender by assets, gained 0.8 percent after the U.S. Commerce Department said retail sales slipped 0.2 percent in May, less than 67 of 81 economists’ estimates in a Bloomberg survey. Suncor Energy Inc., Canada’s biggest oil and gas producer, rose 1.1 percent as crude climbed from a four-week low. Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 2.2 percent after Chinese factory production topped economists’ forecasts.

The Standard & Poor’s/TSX Composite Index rallied 90.89 points, or 0.7 percent, to 13,030.61 at 9:38 a.m. in Toronto after closing at the lowest level since November yesterday.

The S&P/TSX plunged 6.3 percent this month through yesterday, the most among 24 developed-market stock benchmarks, as economic data have reflected a slowing global recovery. The index has not ended a month with a decline that large since February 2009.

Shares of the following companies may have unusual moves in Canadian trading tomorrow.

Artis Real Estate Investment Trust (AX-U CN): The owner of 157 commercial properties in Canada and the U.S. said it will sell 6.4 million units at C$14.10 a unit, according to a press release on Marketwire. Artis rose 1.4 percent to C$14.25 before the announcement.

Brigus Gold Inc. (BRD CN): The gold producer with operations in Ontario said it lost 2 cents a share, excluding certain items, in the first quarter. Richard Gray, an analyst at Cormark Securities Inc., had estimated a loss of 5 cents a share.

Cadente Copper Corp. (DNT CN): The developer of a copper, gold and silver project in Peru received a “speculative buy” rating in new coverage from Chris Chang, an analyst at Laurentian Bank of Canada.

 US

By Nikolaj Gammeltoft

June 14 (Bloomberg) — U.S. stocks rallied and the Standard & Poor’s 500 Index advanced the most in almost two months after better-than-estimated data on American retail sales and Chinese industrial production.

Home Depot Inc. advanced the most in the Dow Jones Industrial Average, gaining 4.5 percent. Best Buy Co., the world’s largest consumer electronics retailer, surged 4.6 percent after profit exceeded analysts’ forecasts on rising demand for smartphones. J.C. Penney Co. soared 17 after naming Ron Johnson, Apple Inc.’s retail head, as its chief executive officer. Energy shares rallied the most among 10 groups in the S&P 500 as oil rebounded from its lowest in a month.

The S&P 500 rose 1.3 percent, the most since April 20, to 1,287.87 at 4 p.m. in New York. The Dow increased 123.14 points, or 1 percent, to 12,076.11.

“The China numbers were fine and the retail sales report was pretty much in line,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “We got ourselves into a short-term oversold condition and the market wants to bounce back now. That’s indicative of the trading range we will be in for a while. There’s a change in tone in the data as it has been coming in slower, but on the other hand valuations are relatively low.”                        

Stock futures extended their gains after a Commerce Department report showed sales at retailers fell 0.2 percent in May, less than forecast and indicating that American consumers are overcoming elevated gasoline costs. The median forecast of economists surveyed by Bloomberg News was a drop of 0.5 percent.

China reported that industrial production climbed more than estimated in May, while the country’s inflation last month accelerated to the fastest pace in almost three years. Production gained 13.3 percent from the year before, exceeding the median economist forecast of 13.1 percent in a Bloomberg survey. The 5.5 percent annual gain in consumer prices matched estimates.

U.S. stocks rose yesterday, rebounding from six weeks of losses, as a pickup in takeovers and the cheapest valuations in almost a year helped offset concern that the economic recovery is faltering.  More than $1 trillion was erased from U.S. equity markets from the S&P 500’s peak on April 29 through yesterday, leaving the measure trading at about 12.8 times its companies’ estimated earnings for 2011. That’s the cheapest valuation since August. The index is still up 2.4 percent for 2011.

The S&P 500 fell 6.8 percent from the end of April through June 10 as sales of existing homes unexpectedly declined, the unemployment rate rose and concern escalated that one or more European countries will fail to repay all their debt.

Birinyi Associates Inc.’s Jeffrey Yale Rubin said the firm is bullish on equities this year, while Dean Curnutt of Macro Risk Advisors said the performance of stocks depends on the actions by the Federal Reserve.

“For the remainder of the year, we’re positive,” Rubin said today at a panel discussion on equities at the Bloomberg Money Managers conference in Boston. For the S&P 500, “we have a target of 2,100 but that’s not this year, that’s not next year. When we look at stock markets that go on for a long period of time, that start off quickly — 1974, 1982, 2009 — those markets are not ones that end quickly. If you also look at those markets during this period, phase two of the market, it runs into difficulty.”

Curnutt, the New York-based chief executive officer of Macro Risk, said the firm’s view on stocks is “largely conditional” on the next policy response by the U.S. central bank. The Fed’s $600 billion program of buying Treasuries to stimulate the economy is ending this month. The S&P 500 could rise to 2,100 if the Fed decided it wanted it to, he said at the conference.

Wholesale costs in the U.S. rose more than forecast in May, led by higher prices for fuel and the fastest rise in 30 years for apparel and textiles. The 0.2 percent increase in the producer-price index compares with the 0.1 percent median estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington.

Home Depot, the largest U.S. home-improvement retailer, added 4.5 percent to $34.75. Best Buy gained 4.6 percent to $30.13 after net income fell 12 percent to $136 million, or 35 cents a share, in the quarter ended May 28. Analysts predicted 33 cents, the average estimate in a Bloomberg survey.

J.C. Penney rallied 17 percent to $35.37. The department- store owner named Johnson, 52, as CEO to help revive sales. He will take his role on Nov. 1 and report to current CEO Myron Ullman, who will become executive chairman. Johnson, a former Target Corp. executive, was hired by Apple Chief Steve Jobs to help build the company’s retail operation in 2000.

Apple climbed 1.8 percent to $332.44 as the maker of the iPhone and iPad agreed to pay an undisclosed sum and royalties to Nokia Oyj, settling all patent litigation between the two companies. The Finnish mobile-phone maker filed a lawsuit in October 2009, accusing Apple of infringing its patents. Apple will pay Nokia royalties for the term of the agreement.

Energy shares gained 2 percent, the most among 10 S&P 500 industry groups, as oil rose for the first time in three days in New York. Crude for July delivery gained $2.07 to settle at $99.37 a barrel in the biggest one-day increase since May 18.

Caterpillar Inc., the world’s largest maker of construction and mining equipment, climbed 2.5 percent to $97.86 for the second-biggest gain in the Dow. Industrial companies rallied the third-most as a group in the S&P 500, materials producers gained the second-most. All ten groups in the benchmark gauge for U.S. equities advanced.

McGraw-Hill Cos. gained 2.6 percent to $41.79. The publisher and provider of financial data said it retained Morgan Stanley to pursue the divestiture of its broadcasting group. Dollar Thrifty Automotive Group Inc., the third-biggest U.S. car-rental company, slumped 9.3 percent to $72.43. Avis Budget Group Inc., which has been bidding against Hertz Global Holdings Inc. for Dollar Thrifty, agreed to buy Avis Europe Plc, the second-biggest car-rental company on the continent. The announcement left investors wondering if Avis could buy both companies. Avis rose 7.6 percent to $17.17, while Hertz rose 9.1 percent to $15.40.

Kellogg Co. fell 0.8 percent to $54.96. The largest U.S. breakfast cereal maker was warned by U.S. regulators after listeria was found in an inspection of a plant that had flies and pools of water. 

Have a wonderful evening everyone. 

Be magnificent! 

Hold the reins of your mind, as you would hold the reins of a restive  horse.

 -Svetasvatara Upanishad

As ever,

 Carolann

 It’s wonderful what we can do if we’re always doing.  

                         -George Washington, 1732-1799

Dear Friends,

Birthday:  William Butler Yeats, June 13, 1865.

Sailing To Byzantium

I
That is no country for old men. The young
In one another’s arms, birds in the trees
—Those dying generations—at their song,
The salmon-falls, the mackerel-crowded seas,
Fish, flesh, or fowl commend all summer long
Whatever is begotten, born, and dies.
Caught in that sensual music all neglect
Monuments of unageing intellect.

II
An aged man is but a paltry thing,
A tattered coat upon a stick, unless
Soul clap its hands and sing, and louder sing
For every tatter in its mortal dress,
Nor is there singing school but studying
Monuments of its own magnificence;
And therefore I have sailed the seas and come
To the holy city of Byzantium.

III
O sages standing in God’s holy fire
As in the gold mosaic of a wall,
Come from the holy fire, perne in a gyre,
And be the singing-masters of my soul.
Consume my heart away; sick with desire
And fastened to a dying animal
It knows not what it is; and gather me
Into the artifice of eternity.

IV
Once out of nature I shall never take
My bodily form from any natural thing,
But such a form as Grecian goldsmiths make
Of hammered gold and gold enamelling
To keep a drowsy Emperor awake;
Or set upon a golden bough to sing
To lords and ladies of Byzantium
Of what is past, or passing, or to come.

                         -William Butler Yeats

 Photos of the day

June 13, 2011 

Kate, Duchess of Cambridge, the Duchess of Cornwall, (l.), and the Earl of Derby watch the procession pass at the Order of The Garter Service in Windsor, England. The annual service is held in St George’s Chapel at Windsor Castle.

Kirsty Wigglesworth/AP

People in traditional Bavarian clothes attend a church service to commemorate the 1886 death of Bavarian King Ludwig II, also known as Mad King Ludwig, in Berg, Germany.

Michael Dalder/Reuters

Market Commentary: 

Canada

By Inyoung Hwang

 June 13 (Bloomberg) — Canadian stocks retreated, extending two straight weeks of losses, as energy companies declined amid concern a weakening global economy will trim demand for oil.

Canadian Natural Resources Ltd. dropped 2.6 percent as crude oil slid before reports this week that may show Chinese industrial production and U.S. retail sales slowed. Goldcorp Inc. declined 1.8 percent as the price of the metal sank. TMX Group Inc. gained 0.4 percent after Maple Group Acquisition Corp. urged shareholders to reject a rival takeover bid.

The Standard & Poor’s/TSX Composite Index lost 146.72 points, or 1.1 percent, to 12,937.28 at 1:45 p.m. in Toronto.

“We have many problems that are continuing on — both concerning the economy and remarks out of the Fed,” said Michael Smedley, who helps manage about C$1.2 billion ($1.23 billion) as a money manager at Morgan Meighen & Associates Ltd. in Toronto. Oil remains around $100 a barrel “with no clear evidence as to whether there’s a shortage of oil. It was a rotational event after gold and silver had been dominating commodities for so long.”

 Canadian stocks fell 3.2 percent last week, the biggest drop since March. Energy and metal producers led the slump after al-Hayat newspaper reported Saudi Arabia will raise oil production to 10 million barrels a day next month. The S&P/TSX fell 5.4 percent from May 30 through June 10 as U.S. economic reports trailed economists’ forecasts and U.S. Federal Reserve Chairman Ben Bernanke called his country’s recovery “frustratingly slow.”

Energy stocks dropped 1.9 percent today, the biggest loss out of 10 groups in the S&P/TSX. Crude futures slid as much as 3.2 percent before economic reports on the U.S. and China, the two largest crude consumers. Canadian Natural Resources, the country’s second-largest energy company, erased 2.6 percent to C$38.32. Encana Corp. dropped 2.4 percent to C$30.95 as prices for natural gas fell 2.5 percent.

U.S. advance retail sales are forecast to drop 0.5 percent in May, following a 0.5 percent gain in April, according to the median estimate of economists surveyed by Bloomberg News ahead of Commerce Department data tomorrow. China’s industrial production growth may have slowed to 13.1 percent in May from 13.4 percent in April, according to a separate Bloomberg survey.

Material stocks had the second-biggest decline out of the 10 groups as the prices of gold, silver and copper all fell. Goldcorp declined 1.8 percent to C$45.36. Silver Wheaton Corp. sank 5.3 percent to C$29.78.                     

TMX advanced 0.4 percent to C$43.97 as Maple Group Acquisition said TMX shareholders must vote against a takeover bid from London Stock Exchange Group Plc on June 30 for Maple Group’s rival takeover plan to proceed. Maple Group, which includes 13 Canadian financial-services companies and pension funds, sent documents to TMX shareholders supporting its unsolicited cash-and-stock takeover bid that it values at C$3.7 billion ($3.8 billion).

Valeant Pharmaceuticals International Inc. rose 0.1 percent to C$51.80, after rising as much as 3.1 percent. The Canadian drugmaker and GlaxoSmithKline Plc won U.S. approval for an epilepsy drug designed as an add-on therapy for patients who aren’t helped by current treatments. The Food and Drug Administration cleared the medicine, ezogabine, which will be marketed as Potiga.

Uranium stocks sank after Italy voted to ban nuclear power. Uranium One Inc. slumped 6.8 percent to C$2.62. The Vancouver- based company has fallen for 11 straight days as reports last week said Japan’s 54 nuclear reactors may go idle next spring and Germany said in May it would close its nuclear reactors by 2022.

US

By Nikolaj Gammeltoft and Inyoung Hwang

June 13 (Bloomberg) — U.S. stocks rose, rebounding from six weeks of losses, as a pickup in takeovers and the cheapest valuations in almost a year helped offset concerns about a slowdown in the economic recovery.

Transatlantic Holdings Inc., the reinsurer formerly owned by American International Group Inc., surged 9.5 percent after agreeing to merge with Switzerland’s Allied World Assurance Company Holdings AG. Timberland Co. rallied 44 percent as VF Corp. said it will buy the footwear maker for $1.8 billion.

Halliburton Co. and Freeport-McMoRan Copper & Gold Inc. slumped at least 1.2 percent amid falling commodity prices.

The Standard & Poor’s 500 Index rose 0.1 percent to 1,271.83 at 4 p.m. in New York after dropping as much as 0.4 percent. The Dow Jones Industrial Average climbed 1.06 points, or less than 0.1 percent, to 11,952.97 after sliding for six straight weeks, the longest stretch since 2002. The Russell 2000 Index of small companies slipped 0.3 percent to 777.20 after erasing its gain for the year on June 10. About three stocks fell for every two that rose on U.S. exchanges.

“Corporate managers are more positive on their prospects than investors, which we see expressed in the deals today,” said Tim Hoyle, director of research at Radnor, Pennsylvania- based Haverford Trust, which manages $6.5 billion. “People came in this morning and saw these good deals,” he said. More than $1 trillion has been erased from U.S. equity markets since the S&P 500’s peak on April 29, leaving the measure trading at about 12.8 times its companies’ estimated earnings for 2011. That’s the cheapest valuation since August.

The S&P 500 fell 6.8 percent from the end of April through June 10 as sales of existing homes unexpectedly declined, the unemployment rate rose and concern about the European debt crisis increased. General Electric Co., the benchmark’s fifth- largest company by weighting, retreated 15 percent from this year’s high on Feb. 17. Bank of America Corp. plummeted 27 percent in the same period.

Transatlantic rallied 9.5 percent to $48.19 after agreeing to merge with Allied World Assurance in a $3.2 billion deal that creates a reinsurer with operations in 18 countries. Allied will exchange 0.88 of a share for each Transatlantic share to create TransAllied Group Holdings AG, with Transatlantic’s shareholders owning about 58 percent of the combined company, the insurers said yesterday in a statement.

Timberland climbed 44 percent to $43.20 after agreeing to be bought for $43 a share. VF, the world’s largest apparel maker, said the boards of both companies voted to approve the deal and its stock advanced 10 percent to $101.01.

Graham Packaging Co. jumped 17 percent to $25.63. The maker of plastic containers controlled by Blackstone Group LP said it has received an unsolicited proposal from an unidentified bidder to acquire all of its shares for $25 a share in cash. The company agreed to be bought by Silgan Holdings Inc. in April for about $4.1 billion including debt.

Ness Technologies Inc. jumped 14 percent to $7.60 after the Israeli computer-services provider agreed to be acquired by Citi Venture Capital International for $307 million in cash.

About $428.3 billion in mergers and acquisitions targeting U.S. companies have been announced so far this year, a 24 percent increase compared with the same period last year, according to data compiled by Bloomberg. More than two dozen deals totaling $6.9 billion were announced today.

Energy shares fell 1.4 percent, the most among 10 S&P 500 industry groups. Materials producers lost 0.6 percent, the second-most in the benchmark index. Crude oil for July delivery fell 2 percent to $97.30 a barrel on the New York Mercantile Exchange, after declining to $96.13, the lowest intraday level since May 20. The Thomson Reuters/Jefferies CRB Index of commodities slipped 1 percent.

Halliburton, the world’s second-largest oilfield services provider, retreated 2.4 percent to $46.86. Freeport, the world’s largest publicly traded copper producer, slipped 1.2 percent to $48.33.

Stocks retreated before rebounding and oil extended losses as S&P cut Greece’s credit rating to the world’s lowest debt grade. Greece had its credit rating cut by three levels to CCC and the rating company said today the nation is “increasingly likely to restructure its debt.” A restructuring would likely “result in one or more defaults under our criteria,” S&P said. The downgrade follows Moody’s Investors Service’s decision this month to grade Greece only one level higher.

European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble remain at odds over investors’ role in the second Greek rescue in 14 months. The dispute turns on how politicians make good on a promise to push creditors to pay some of the cost, a step that Trichet said on June 9 could be an “enormous mistake.”

Finance ministers have called a special meeting tomorrow as they try to avoid what European Economic and Monetary Affairs Commissioner Olli Rehn called a “Lehman Brothers catastrophe on European soil.”

New York University professor Nouriel Roubini warned in an interview that a “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy.

A Commerce Department report tomorrow may show U.S. retail sales fell for the first time in 11 months in May. A 0.5 percent drop in purchases would follow a 0.5 percent gain in April, according to the median forecast of 62 economists surveyed by Bloomberg. Other data might show inflation eased.

“We’re between data points as we approach a technically important level of support in the 1,250 to 1,260 range on the S&P 500,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion. “Investors are testing this channel of support for the market place, and we’ve been looking at that level as a place where we could get a relief rally if it holds. Below this level we may go into a void down to the 1,200 range.”

Have a wonderful evening everyone.

Be magnificent!

If a man does not of his own free will put himself last among his creatures,

there is no salvation for him.

 

-Mahatma Gandhi, 1869-1948