Category: Newsletters

Dear Friends,

Tangents:

On this day in 1911, A.C. Benson wrote in his diary:

Percy [Lubbock] and I  decided to bicycle.  We started about eleven: went slowly to Barton, and so to Haslingfield: then between Haslingfiedl and Harston we lay long on the grass, near ricks, listening to owls and the snorting of some beast that drew nigh, to far-off dogs barking, and cocks crowing.  The stars were like the points of pendants in the irregular roof of a cave – not an even carpet or se in a concave.  We went on about one, and then made a long halt near the GNR bridge on the way to Newton; but no trains passed, so we went on about 1:45 to Shelford; and this was very sweet, so fragrant and shadowed by dark trees, while Algol and Aldebaran and other great shining stars slowly wheeled above us.

We go to the GER bridge at Shelford – I was anxious to see trains – and half a dozen great luggers jangled through with a cloud of steam and coloured lights.  There was one that halted, and the guard walked about with a lantern; a melancholy policeman was here, in the shadow.  The owls again hooted and screamed and cocks roared hoarsely.

Suddenly we became aware it was dawn!  The sky was whitening, there was a green tinge to east, with rusty stains of cloud, and the stars went out.  We went on about 2:30 to Grantchester, where the mill with lighted windows was rumbling, and the water ran oily-smooth into the inky pool among the trees.  Then it was day; and by the time we rode into Cambridge, getting in at 3:30, it was the white morning light – while all the places so mysteriously different at night had become the places one knew.

And also on this day in…

1866 – Atlantic telegraph cable laid.

1921 – Canadians Sir Frederick Banting and Charles Best isolate insulin at the University of Toronto.
1909 – Orville Wright sets a world record for staying aloft in an airplane–one hour, 12 minutes and 40 seconds.
1974 – House begins impeachment of President Nixon.
1949 – First jet makes test flight.

Happiness is like a butterfly; the more you chase it, the more it will elude you, but if you turn your attention to other things, it will come and sit softly on your shoulder …

Henry David Thoreau

photos of the day July 27, 2012

A cyclist, left, is silhouetted as the sun rises behind the sculpture Molecule Man, designed by American artist Jonathan Borofsky, in Berlin, Germany.

Gero Breloer/AP

People walk along the Admiralteyskaya Embankment in front the Russian naval ships in the centre of St. Petersburg. The ships have been brought to Russia’s second largest city as part of celebrations for Navy Day on Sunday.

Alexander Demianchuk/Reuters

Market Closes for July 27, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 27 (Bloomberg) — Canadian stocks rose, giving the benchmark index its second straight weekly gain, as commodities advanced amid expectations Europe will move toward a new round of bond purchases to ease borrowing costs in Spain and Italy.

Progress Energy Resources Corp. jumped 14 percent as Petroliam Nasional Bhd, Malaysia’s state-owned oil and natural- gas company, agreed to boost its cash bid for the company. Bank of Nova Scotia, the nation’s third-largest lender, climbed 1.4 percent. TransForce Inc. added 6.3 percent as North America’s largest mover of oil and gas-drilling rigs reported better-than- estimated profit.

The Standard & Poor’s/TSX Composite Index gained 126.61 points, or 1.1 percent, to 11,766.36. The gauge rose 1.2 percent this week, paring its 2012 losses to 1.6 percent.

“The political side will continue to drive the markets,” Jennifer Radman at Caldwell Investment Management Ltd. in Toronto, which manages about C$1 billion, said in a phone interview. “Depending on the commentary from the ECB and the U.S., they will be the big drivers moving forward.”

Global stocks rallied after two central bank officials said European Central Bank President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in an effort to overcome the biggest stumbling block to a new raft of measures including bond purchases. German Chancellor Angela Merkel and French President Francois Hollande echoed Draghi in promising to do everything to protect the euro.

Crude climbed 0.8 percent to settle at $90.13 a barrel on the New York Mercantile Exchange.

Bonavista Energy Corp., the Calgary-based oil and natural- gas producer with operations in western Canada, added 6.3 percent to C$18.55.

Progress Energy rose 14 percent to C$22.85. Petronas, as the Malaysian bidder is known, raised its offer to C$22 a share from C$20.45, according to a statement from Calgary-based Progress Energy today. The bid amounts to 90 percent more than the closing price for the oil and gas producer on June 27 before the initial offer was announced.

Royal Bank of Canada, the nation’s largest lender, rose 1.7 percent to C$51.73. Toronto-Dominion Bank added 1.4 percent to C$79.48. Scotiabank advanced 1.4 percent to C$52.02.

TMX Group Inc., the Toronto Stock Exchange owner that agreed to be acquired by a group of Canadian banks and pension funds, said second-quarter profit fell 97 percent on takeover costs and a slowdown in trading. The stock slipped 0.3 percent to C$49.35.

TransForce Inc. jumped 6.3 percent, the most in six months, to C$17.63 after the company said it may acquire an unnamed U.S. company as it announced earnings. Adjusted earnings of 38 cents beat analysts estimates of 37 cents. Sales jumped 25 percent to C$812 million from last year.

US

By Rita Nazareth

July 27 (Bloomberg) — The Dow Jones Industrial Average climbed above 13,000, capping its longest weekly advance since January, amid speculation the European Central Bank will buy bonds to help lower borrowing costs and preserve the euro.

Alcoa Inc. and Caterpillar Inc. rose more than 3.1 percent to pace gains in the biggest companies. Merck & Co. and Amgen Inc. added at least 4 percent, driving health-care shares higher, as earnings beat estimates. Expedia Inc. surged 20 percent as the online-travel company raised its dividend.

Facebook Inc. fell 12 percent to a record low after its results.

About nine stocks rose for every two falling on U.S. exchanges at 4 p.m. New York time. The Standard & Poor’s 500 Index advanced 1.9 percent to 1,385.97. The Dow average rallied 187.73 points, or 1.5 percent, to 13,075.66. Both climbed to the highest levels since May and completed three straight weeks of gains. Volume for exchange-listed stocks in the U.S. was 7.9 billion shares, or 18 percent above the three-month average.

“They’ve got to buy bonds,” Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston, said in a phone interview. “There’s been a lot of rhetoric as far as opening up the checkbook for whatever needs to be done to stabilize the euroland. It’s a giant deal if they actually do what they say they are prepared to do.”

American stocks joined a global rally after two central bank officials said ECB President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in an effort to overcome the biggest stumbling block to a new raft of measures including bond purchases. German Chancellor Angela Merkel and French President Francois Hollande echoed yesterday’s pledge by Draghi that they will do everything to protect the euro.

In the U.S., data showed that the economy expanded at a slower pace in the second quarter as a softening job market prompted Americans to curb spending. Consumer confidence in July dropped to the lowest this year, according to a separate report.

Cooling growth makes it harder to reduce unemployment, helping explain why Federal Reserve Chairman Ben S. Bernanke has said policy makers stand ready with more stimulus if needed.

“Growth has decelerated sharply,” said Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees $355.9 billion. He spoke in a telephone interview. “We need something to reverse that downtrend and that ‘something’ is policy.”

Consumers are cutting back just as Europe’s crisis and looming U.S. tax-policy changes dent confidence, hurting sales at companies from United Parcel Service Inc. to Procter & Gamble Co. Sales at almost 60 percent of S&P 500 companies which reported second-quarter results missed estimates, data compiled by Bloomberg show. Still, 72 percent beat profit forecasts.

Bets on global policy action paced a surge in companies that are most-dependent on economic growth. The Morgan Stanley Cyclical Index jumped 2.7 percent. Alcoa, the largest U.S.

aluminum producer, rose 3.2 percent to $8.45. Caterpillar, the largest maker of construction equipment, climbed 3.4 percent to $86.16. JPMorgan Chase & Co. added 3 percent to $36.89.

Better-than-estimated earnings helped drive health-care companies higher today. The group rallied 2.5 percent for the biggest advance among 10 industries in the S&P 500.

Merck gained 4.1 percent to $45.10, the highest price since 2008. The company, facing generic competition in August to its top-selling asthma drug Singulair, reported second-quarter profit that beat analyst estimates on higher sales of the diabetes medicines Januvia and Janumet.

Amgen advanced 5.8 percent to $83.92 to the highest since 2005. The largest biotechnology company reported profit topped analysts’ estimates on increased demand for its rheumatoid arthritis and bone drugs and it raised its 2012 forecast.

Coventry Health Care Inc. climbed 11 percent to $34.07. The company beat analysts’ second-quarter earnings estimates because of increased membership in its U.S. government insurance programs and lower costs for its Medicaid business in Kentucky.

Gilead Sciences Inc. added 7.4 percent to $55.50. It plans to start a combination study of two drugs in a single pill to treat hepatitis C by the end of the year, putting it on track to request U.S. regulatory approval for the medicine in 2014.

Expedia surged 20 percent to $54.90 amid a jump in sales.

The company saw stronger second-quarter demand for hotel rooms, Chief Executive Officer Dara Khosrowshahi said. Expedia will lift its dividend 44 percent to 13 cents a share.

Amazon.com Inc. rallied 7.9 percent to $237.32. The largest Internet retailer gained as investors bet that investments in its distribution network will pay off by the holiday season.

Arch Coal Inc. led a surge in producers of the fuel as second-quarter results beat estimates. Arch climbed 29 percent, the most since 2000, to $6.80. Alpha Natural Resources Inc. jumped 20 percent, the biggest gain in the S&P 500, to $7.02.

Peabody Energy Corp. advanced 5.6 percent to $20.80.

Goodyear Tire & Rubber Co. increased 6.9 percent to $10.57.

Michelin & Cie., the world’s second-largest tiremaker, reported a 36 percent jump in first-half earnings that beat estimates.

Chubb Corp. rallied 4 percent to $72.32. The insurer of commercial property and high-end homes reported profit that beat estimates and boosted its outlook for the second half.

Facebook tumbled 12 percent to $23.71, 38 percent below its initial public offering price of $38. Executives led by Chief Executive Officer Mark Zuckerberg, addressing analysts for the first time since the company’s May 17 IPO, issued no growth forecasts and said little else to reassure investors who fret that the company is overvalued.

Starbucks Corp. lost 9.4 percent to $47.47. The world’s largest coffee-shop chain forecast fourth-quarter profit that trailed estimates as consumers pull back around the globe.

Newmont Mining Corp. slid 3.4 percent to $44.53. The largest U.S. gold producer reported second-quarter profit that missed analysts’ estimates as costs rose faster and production was lower than projected.

CA Inc. slumped 7.2 percent to $24.43. The maker of software for managing information technology cut its annual revenue forecast. Chief Executive Officer Bill McCracken said on a conference call that a sluggish economy and a business reorganization led to a slow start for the year.

ATP Oil & Gas Corp. dropped 28 percent to $1.40, a record low. Bloomberg News reported bondholders are organizing for a potential restructuring, citing two people familiar with the matter. ATP Chief Financial Officer Albert Reese and Isabel Plume, a spokeswoman for the company, didn’t return calls for comment yesterday.

Amarin Corp. lost 12 percent to $13.51. U.S. approval for the company’s first product, a drug to combat high levels of blood fat that can lead to stroke and heart attack, included limits on its use that may have disappointed investors.

Abby Joseph Cohen, the senior U.S. investment strategist at Goldman Sachs Group Inc., said equities will generate better returns than bonds for investors in the medium-to-long term.

“If we were to look just at fair-value estimates over the next year to three, we think that returns that are roughly 8 to 10 percent on the stock market are sensible,” she said in an interview on “Bloomberg Surveillance” today with Tom Keene.

“It is sensible as well for a long-term outlook, even though we assume that economic growth will not be as robust as it was in the years immediately prior to the financial crisis.”

Have a wonderful weekend 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

Go to your bosom.  Knock there, and ask your heart

what it doth know.

-William Shakespeare, 1564-1616

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Last night I read the story on Winnipeg’s Clara Hughes in the most recent edition of Maclean’s where there’s an “Olympic preview” of a few Canadian athletes.  I went to see Clara Hughes in Vancouver last year where she captivated the audience as she spoke about her life and her intention to compete in the Olympics again this year.  She is one of two women to have won medals in Summer and Winter Games.

She is truly inspiring.  This is what she has to say on quitting:

The race began and I wanted to quit.  Less than 50 km into the race I wanted to quit.  I could have quit and everyone would have understood.  The team was fine without me and the race situation we set was more than ideal.  I could pull out and stop the bone-chilling rain from settling into my core and it would be okay.

But it would not be okay with me.  There’s something about quitting that just does not sit well.  I always think about what I would say to a kid at the finish area if they asked, “Why did you stop?”  There are no words to justify this other than broken bones or a catastrophic situation that has myriad forms in bike racing.  Cold rain does not qualify.  Fatigue does not qualify.My teeth still hurt from the chattering.  But I finished the race.

Blog entry, April 2012.

Unless I’m broken in half, I don’t quit.  I don’t want to have it in my brain that there’s a way out.  –Clara Hughes.

And on this day in…

1775 – US Postal Service established.

1894 – Aldous Huxley was born.

1943 – Mick Jagger was born.
1908 – FBI founded.
1931 – Grasshoppers bring ruin to Midwest.
1956 – Egypt nationalizes the Suez Canal.

The opposite of love is not hate, it’s indifference.

The opposite of art is not ugliness, it’s indifference.

The opposite of faith is not heresy, it’s indifference.
And the opposite of life is not death, it’s indifference.
–  Elie Wiesel

photos of the day July 26, 2012

A paperboy distributes copies of the London Evening Standard at a news stand at Stratford railway station, in London.

Patrick Semansky/AP

A sparrow drinks water from the beak of a pelican-shaped fountain at a park in Tokyo.

Shizuo Kambayashi/AP

Market Closes for July 26, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva and Eric Lam

July 26 (Bloomberg) — Canadian stocks advanced the most in three weeks as European Central Bank President Mario Draghi pledged to defend the euro and mining companies rallied on rising gold prices.

Suncor Energy Inc., the nation’s largest oil company, rose 3.2 percent as crude prices rose for a third day. Bank of Nova Scotia, the nation’s third-largest lender, rose 1.3 percent.

Energy and bank stocks contributed the most to the gains in the Standard & Poor’s/TSX Composite Index among 10 industries.

Barrick Gold Corp., the largest producer of the metal, slipped 4.2 percent after profit trailed estimates.

The S&P/TSX rallied 147.24 points, or 1.3 percent, to 11,639.75. The gauge gained the most since July 3 and pared its annual losses to 2.6 percent.

“Draghi is saying the Europeans will go to the mat to protect the euro, which got the futures excited even before the market opened,” David Baskin, president of Baskin Financial Services Inc. in Toronto, which manages about C$450 million ($445 million) in assets, said in a phone interview.

Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation euro currency bloc. In the U.S., fewer people than forecast filed first-time claims for unemployment insurance payments last week. Orders for durable goods climbed more than projected.

Oil rose 0.5 percent to $89.39 a barrel on the New York Mercantile Exchange. Suncor Energy advanced 3.2 percent to C$31.86. Transcanada Corp. gained 1.4 percent to C$44.80.

Royal Bank of Canada rose 0.9 percent to C$50.85. Bank of Nova Scotia, the nation’s third-largest lender, rose 1.3 percent to C$51.28.

Mining companies reversed early losses as gold rallied, rising 0.4 percent to settle at $1,619.80 an ounce on the Comex.

Goldcorp Inc., the world’s second-largest producer of the metal, gained 4.8 percent to C$36.50.

Barrick fell 4.2 percent to C$33.04 after the company increased estimates for building a mine in South America.

Barrick said it could cost $8 billion to build the Pascua-Lama mine on the border between Chile and Argentina, 50 to 60 percent more than the top end of previous estimates. Second-quarter profit excluding certain items was 78 cents a share, missing the 93-cent average of 22 estimates compiled by Bloomberg.

NovaGold Resources Inc., which has a 50 percent stake in the Alaska-based Donlin Gold project with Barrick, plunged 25 percent to C$4.07 as Barrick said it would not fund the operation “at this time.” NovaGold Chief Executive Officer Greg Lang said the company will move forward with developing the project.

Potash Corp. of Saskatchewan Inc. added 0.6 percent to C$45.54, after plunging as much as 4.5 percent earlier in the day. The world’s largest fertilizer producer forecast lower- than-expected third-quarter profit as scheduled maintenance reduces output and raises costs.

US

By Rita Nazareth

July 26 (Bloomberg) — The Dow Jones Industrial Average capped its biggest advance in almost a month after European Central Bank President Mario Draghi pledged to defend the euro.

3M Co., the maker of Post-It Notes, and Visa Inc., the world’s largest payments network, rose at least 2 percent amid better-than-estimated earnings. PulteGroup Inc., the nation’s largest homebuilder by revenue, surged 18 percent on a jump in orders. Sprint Nextel Corp. and MetroPCS Communications Inc. rallied more than 20 percent after their results. Facebook Inc. fell 9.8 percent at 5:23 p.m. New York time after posting a narrower profit margin as sales and marketing costs surged.

Seven stocks rose for every three falling on U.S. exchanges at 4 p.m. New York time. The Standard & Poor’s 500 Index added 1.7 percent to 1,360.02. It fell 2.8 percent over the previous four days. The Dow gained 211.88 points, or 1.7 percent, to 12,887.93. Volume for exchange-listed stocks in the U.S. was 7.7 billion shares, or 15 percent above the three-month average.

“It is a big deal,” said Liz Ann Sonders, the New York- based chief investment strategist at Charles Schwab Corp., which has $1.8 trillion in client assets. “The markets have been looking for a more definitive acknowledgement by key people like Draghi that they are willing to do what they need to do. We feel that if they want to save the euro, it would involve true QE,” she said, referring to bond buying to stimulate the economy.

Global stocks rallied and the euro rose by the most in almost a month against the dollar after Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc.

The ECB mothballed its bond-buying program in March as it pushed governments to do more to control their deficits.

All 10 industries in the S&P 500 gained today as earnings at about 72 percent of the 271 companies in the measure which have reported second-quarter results exceeded analysts’ projections, according to data compiled by Bloomberg.

The bull market in American equities is intact and the S&P 500 will probably reach 1,380 within the next few months and rally from there, according to Laszlo Birinyi, president of research and money-management firm Birinyi Associates Inc. in Westport, Connecticut. He said concern about second-quarter earnings are overblown and too many investors are worried about a “worst-case” outcome for stocks.

“It will be, as it has been, a case of three steps forward, two backward and trends lasting one day or five hours,” wrote Birinyi in a note to clients. The former Salomon Brothers Inc. equity trader, who described his forecast as “1,380 later this summer, and then higher,” said in the note:

“Despite the frustrations of July with its volatility and curious price activity, we remain optimistic.”

Today’s rally trimmed this month’s drop in the S&P 500 to 0.2 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, slumped 9.4 percent to 17.53.

Earlier this week, the VIX ended at the highest since June 15 amid concern about a global slowdown and Europe’s debt crisis.

3M rallied 2.1 percent to $90.59. Second-quarter profit beat estimates as gains in efficiency helped trump a drag from foreign-exchange rates. 3M had to overcome a stronger dollar that eroded the value of local-currency sales outside the U.S.

Visa rose 3.7 percent to $126.77. It has benefited from a consumer shift from cash to electronic payments that shows no signs of abating, while parrying threats to its business model.

A measure of homebuilders in S&P indexes climbed 6.4 percent. PulteGroup soared 18 percent, the most since 2008, to $11.86 after the company reported profit that beat analysts’ projections amid a 32 percent jump in orders.

Better-than-estimated earnings also drove a surge in telephone shares. The group rose the most among 10 industries in the S&P 500 today, adding 3 percent.

Sprint Nextel rallied 20 percent, the most since 2009, to $4.05. Sales at the wireless carrier were bolstered by customers spending more on data plans. Even so, its contract subscriber base has shrunk for five years, contributing to 19 straight quarterly losses.

MetroPCS Communications soared 37 percent, the most since it went public in 2007, to $8.59. The pay-as-you-go wireless carrier reported second-quarter earnings that beat estimates amid a decrease in promotional costs.

Akamai Technologies Inc., which helps businesses deliver data more quickly over the Internet, soared 24 percent to $35.04. The company reported profit and revenue that beat estimates, benefiting from the growth of cloud computing.

Western Digital Corp. jumped 21 percent, the most since 2002, to $39.27. The maker of disk drives and networking products reported fiscal fourth-quarter sales and profit that topped analysts’ estimates.

Whole Foods Market Inc. climbed 11 percent, the biggest gain since February 2011, to $94.10. The largest U.S. natural- goods grocer reported third-quarter profit that rose more than analysts estimated and boosted its annual earnings forecast as sales gained at established stores.

Moody’s Corp. rose 11 percent to $40.09 after the world’s second-largest provider of credit ratings reported second- quarter profit that beat analyst estimates.

The New York Times Co. gained 11 percent to $7.80. The newspaper publishing company reported a narrower loss in the second quarter amid a gain in digital subscriptions.

CBS Corp. jumped 4.9 percent to $32.63. The owner of the most-watched U.S. television network will raise its quarterly dividend 20 percent to 12 cents and expand a stock buyback program to as much as $4.7 billion.

Stocks rose even as data showed that a slump in June orders for equipment signals business investment may cool in the second half of the year. Jobless claims fell more than forecast last week, which may have resulted from difficulty adjusting data for seasonal shutdowns of auto factories.

Facebook fell 8.5 percent today ahead of its results as Zynga Inc. missed analysts’ second-quarter revenue and profit estimates. The biggest developer of games played on Facebook’s social network plunged 37 percent to $3.18 today.

After the close of regular trading, Facebook slumped 9.8 percent to $24.22. Marketing and sales expenses jumped more than fourfold. Chief Executive Officer Mark Zuckerberg is spending more to increase the user base, which swelled to 955 million last quarter, and seeks to attract advertisers.

“Ultimately, Facebook is just an advertising platform, and so advertisers go where people’s eyeballs are,” said Michael Pachter, an analyst at Wedbush Securities Inc. Based on the number of users Facebook has amassed, “they’ve built the third- largest country; it just happens to live on the Internet.”

Starbucks Corp., the world’s largest coffee-shop chain, also reported results after the market closed. Third-quarter profit rose less than analysts estimated amid weak demand in Europe. The shares lost 10 percent to $47.15 after the close of regular trading.

Raw material companies had the smallest advance in the S&P 500 among 10 industries today. Dow Chemical Co. slumped 3.6 percent to $29.18. The chemical company reported a bigger drop in earnings and sales than analysts estimated and said the outlook for global demand for the rest of the year is “bleak.”

Cliffs Natural Resources Inc. slid 6.3 percent to $38.57, the lowest since 2009. The largest U.S. iron-ore producer forecast higher costs and lower prices.

Airline stocks fell, giving a benchmark index its longest decline in two years, after United Continental Holdings Inc. posted a quarterly profit that missed analysts’ estimates.

United slid 5.9 percent to $19.20 to pace the Bloomberg U.S. Airlines Index toward an eighth straight daily drop, the longest streak since 2010. The index slumped 0.8 percent today.

The Bloomberg U.S. For-Profit Education Index fell 5.1 percent, to the lowest level since the data started being compiled in 2005, after ITT Educational Services Inc. and Strayer Education Inc. said student enrollment declined in the second quarter. ITT Educational sank 15 percent to $42.78, and Strayer plunged 12 percent to $79.44.

Boston Scientific Corp. slid 6.8 percent to $4.97. The second-biggest U.S. heart device-maker fell as sinking demand for stents and defibrillators led to a fourth consecutive quarterly sales drop.

Cash America International Inc. dropped 19 percent, the most since 2005, to $36.69. The world’s largest pawn shop operator posted results that missed estimates and said third- quarter earnings will be lower than last year.

Anyone buying Apple Inc.’s stock after last quarter’s sales shortfall at the iPhone maker has history on their side, according to Gene Munster, a Piper Jaffray Cos. analyst.

A study shows how Apple performed after four earlier cases of disappointing quarterly revenue, as tracked by Munster. They occurred in fiscal 2006, 2007, 2008 and 2011, with iPhone sales trailing estimates in the latter case. Six months later, the shares were 23 percent higher on average.

“It’s going to be an in-vogue stock again shortly,” Munster said yesterday in a Bloomberg Radio interview. He cited the pending introduction of the next iPhone model, known as the iPhone 5, which he expects in October. “We’re going to see a significant rebound in the December quarter, and that’s probably an understatement,” he said.

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

A people that values its privileges above

its principles soon loses both.

-Dwight D. Eisenhower, 1890-1969

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

POEM

The Change

As after journeys, candlelit, through books,

We long for morning ploughland and the rooks;

As summer that delays in listless air

Makes welcome ragged autumn and the spare,

Blue smoke of woods; as we can know delight

In many musks and clamours of a night

Whose crowds are padding by a gleaming dome,

And yet soon miss the empty street of home,

With its far tap footsteps on the kerb

That can no sleeping house or soul disturb;

As after steaming plains, the mountain’s chill

Renews us: so do we, who have been ill

With love, awake at last unfevered, sane

As limpid air that has been washed by rain.

-by Sheila Wingfield from Poetry by Women in Ireland:

A Critical Anthology 1871-1970, ed. Lucy Collins, Liverpool University Press

And on this day in…

1978 – The first test-tube baby is born in Oldham, England.
1943 – Italian dictator Mussolini is overthrown in a coup.
1909 – French aviator Louis Bleriot becomes the first man to fly across the English Channel in an airplane.
1759 – British forces defeat a French army at Fort Niagara, Canada.
2000 – Concorde jet crashes.

photos of the day July 25, 2012

Gannets gather on their nesting grounds on Bonaventure Island in Perce, Quebec, Canada.

Jacques Boissinot/The Canadian Press/AP

An indigenous child swims in the Sao Miguel River during the ‘Meeting of Traditional Cultures of Chapada dos Veadeiros’ in a multiethnic village in Goias, Brazil.

Ueslei Marcelino/Reuters

Market Closes for July 25, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Steve Chambers and Eric Lam

July 25 (Bloomberg) — Canadian stocks rose, snapping three days of losses, as Suncor Energy Inc. reported profit that beat analysts’ estimates and mining and energy shares climbed amid advancing gold and oil prices.

Barrick Gold Corp., the world’s largest producer of the metal, rallied 2.2 percent as gold futures advanced the most in more than three weeks. Suncor, the nation’s largest oil company, rose 3.7 percent after its oil-sands production costs fell.

The Standard & Poor’s/TSX Composite Index rose 25.56 points, or 0.2 percent, to 11,492.51. The benchmark index lost 1.7 percent over the previous three sessions and is down 3.9 percent in 2012.

“The Canadian market is on the cyclical side and it’s turning a bit, not everywhere, but certainly on the metals side,” Terry Shaunessy, president of Shaunessy Investment Counsel Inc. in Calgary, which manages about C$200 million, said in a phone interview. “The Nexen bid from Cnooc shows the kind of value that is in these companies. Somebody who actually wants the oil sees that the market is so cheap relative to the value of the assets. This is basically true for a lot of the metals and resources companies, and that is sinking in a bit.”

Cnooc agreed earlier this week to pay $15.1 billion in cash to acquire Nexen in the biggest overseas takeover by a Chinese company. Canada has become a fertile area for Chinese oil producers seeking to add oil and gas reserves to meet demand in the world’s largest energy-consuming country.

Gold futures advanced on speculation that European leaders may take further steps to tame the worsening debt crisis.

European Central Bank council member Ewald Nowotny said today there were arguments in favor of giving the region’s rescue fund a banking license. The move would give the permanent bailout fund, the European Stability Mechanism, access to ECB lending, increasing cash available for aid.

Barrick rose 2.2 percent to C$34.49. Goldcorp Inc., the world’s second-largest producer, gained 3.5 percent to C$34.84.

Kinross Gold Corp. jumped 3.9 percent to C$8.21.

Suncor climbed 3.7 percent to C$30.87. Enbridge Inc., the nation’s third-largest energy provider, advanced 0.4 percent to C$41.55.

Cenovus Energy Inc. lost 3 percent to C$31.15 after the company said second-quarter profit declined 40 percent as crude prices fell.

Teck Resources Ltd. tumbled 7.3 percent to C$27.27.

Canada’s largest diversified miner reported second-quarter profit that trailed analysts’ estimates as prices for metallurgical coal, copper and zinc fell. Net income dropped 65 percent to C$268 million, or 46 cents a share, from C$756 million, or C$1.28 a share, a year earlier, the company said.

US

By Rita Nazareth

July 25 (Bloomberg) — The Standard & Poor’s 500 Index erased gains in the final hour of trading as a rally in bank and industrial shares wasn’t enough to overcome disappointing results at Apple Inc. and an unexpected drop in new home sales.

A gauge of homebuilders in S&P indexes slumped 3.2 percent.

Apple tumbled 4.3 percent as iPhone sales missed forecasts.

Netflix Inc., the largest video-subscription service, plunged 25 percent after raising doubts on user growth. JPMorgan Chase & Co. and Citigroup Inc. rose at least 1.2 percent. Boeing Co. and Caterpillar Inc. added more than 1.4 percent, pacing gains in industrial shares, after raising their earnings forecasts.

About five stocks rose for every four falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 slid less than 0.1 percent to 1,337.89, after gaining 0.4 percent earlier. The benchmark gauge has lost 2.8 percent in four days. The Dow Jones Industrial Average rose 58.73 points, or 0.5 percent, to 12,676.05. Volume for exchange-listed stocks in the U.S. was 6.6 billion shares, or about in line with the three-month average.

“There’s a huge amount of uncertainty out there,” Rob McIver, co-portfolio manager at Jensen Investment Management in Lake Oswego, Oregon said in a phone interview. His firm manages $5.5 billion. “It’s a somewhat anemic U.S. recovery. And you see that starting to be reflected in corporate results. It’s certainly a difficult environment for investors.”

The S&P 500 fell as a report showed demand for new U.S. homes unexpectedly dropped in June from a two-year high. Sales at only 40 percent of the 201 S&P 500 companies which reported second-quarter results have beaten analysts’ estimates, according to data compiled by Bloomberg. Earnings at 71 percent of companies topped forecasts, the data showed.

“The earnings news is mixed,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “Still, companies have managed expectations and, for the most part, the numbers came in ahead of forecasts. We’re also seeing a discussion on the Fed potentially acting amid an economic slowdown.”

Worse-than-expected economic data intensified bets that the Federal Reserve is moving closer to taking new steps to spur economic growth. Fed Chairman Ben S. Bernanke last week said policy makers are studying options for further easing that could be deployed in case economic growth remains too feeble to produce a lasting decline in unemployment. The Federal Open Market Committee meets next week.

Technology shares, which comprise 20 percent of the S&P 500, dropped 0.8 percent.

Apple sank 4.3 percent, the most since October, to $574.97.

Customers delayed purchases of existing iPhone versions while awaiting the next model. Samsung Electronics Co. releases several designs a year to defend its lead in the $219.1 billion smartphone market. That raises the stakes for Apple Chief Executive Officer Tim Cook, who relies on a once-a-year upgrade of the device that makes up half of the company’s sales.

“Pressure is mounting,” said Michael Obuchowski, a portfolio manager at North Shore Asset Management LLC, an owner of Apple shares. “Because everybody else has a much faster design cycle, Apple has to come up with a new phone that’s competitive not just when it comes out, but will stay competitive for a long period of time.”

Netflix plunged 25 percent to $60.28, the lowest since January 2010. The summer Olympics are likely to hamper efforts to sign up new customers, Chief Executive Officer Reed Hastings said. The full year-goal of adding 7 million new U.S. users will be “challenging” if this quarter’s most optimistic targets aren’t met, he said.

International Game Technology dropped 20 percent to $11.76.

The world’s biggest maker of slot machines reported profit and sales that trailed analysts’ forecasts.

TripAdvisor Inc. sank 17 percent to $36.18. The online travel-recommendation service spun off from Expedia Inc. reported second-quarter revenue that missed analysts’ estimates.

RadioShack Corp. tumbled 29 percent to $2.60. The electronics chain suspended its dividend and posted an unexpected second-quarter loss as costs soared.

WellPoint Inc. lost 12 percent to $54.01. The second- biggest U.S. health plan cut its forecast after quarterly profit missed analyst estimates because of higher medical costs.

ConocoPhillips lost 2.6 percent to $53.24. The company said second-quarter profit fell 33 percent for the newly independent oil and natural-gas producer after losing income from its refining segment, which was spun off April 30.

Corning Inc. retreated 7.7 percent to $11.14. The world’s largest maker of glass for flat-panel televisions reported a 39 percent drop in second-quarter earnings amid price declines for its LCD screens.

A measure of financial shares in the S&P 500 gained 0.3 percent. JPMorgan added 1.3 percent to $35.17. Citigroup rose 2.2 percent to $25.79.

Nasdaq OMX Group Inc. jumped 4.8 percent, the most since November, to $22.87. The second-largest U.S. equity exchange operator reported earnings that beat analyst estimates. The company lowered its 2012 expense forecast.

Boeing gained 2.8 percent to $74.03. Total jet deliveries should rise to a range of 585 to 600 this year, it said. That may help the U.S. planemaker reclaim the top spot in commercial production it lost to European rival Airbus SAS in 2003.

Caterpillar rallied 1.4 percent to $82.60. The largest maker of construction and mining equipment raised its full-year earnings forecast as increasing demand from North American builders and overseas miners bucks an economic slowdown.

Symantec Corp. soared 14 percent to $14.96. The world’s largest maker of computer-security software ousted Chief Executive Officer Enrique Salem and passed the reins to Chairman Steve Bennett, saying the company wasn’t performing well enough.

Altera Corp. surged 12 percent to $34.41. The maker of programmable chips forecast sales that may beat analysts’ estimates this quarter on stronger demand for wireless- communications gear.

Juniper Networks Inc. climbed 11 percent to $16.50. The No.2 maker of networking gear reported second-quarter revenue and profit that beat analysts’ estimates, citing demand for new products and improved sales to U.S. telecommunications carriers.

Broadcom Corp. added 7.2 percent to $32.98. The maker of chips that help mobile devices connect to the Internet, forecast third-quarter sales that may exceed some analysts’ estimates, helped by strong demand from its smartphone customers.

Baxter International Inc. surged 3.4 percent to $56.83. The maker of blood products and intravenous drugs raised its dividend and said it authorized a new share buyback program.

U.S. initial public offerings are set for their busiest week since March as purveyors of steak, burritos and antivirus software strive to go to market before investor optimism wears off.

Del Frisco’s Restaurant Group Inc., Chuy’s Holdings Inc., Avast Software NV and five other companies are attempting to raise as much as $923 million, data compiled by Bloomberg show.

That would be the most since the week of March 26, when nine companies went public, including foodmaker Annie’s Inc. and industrial-components maker Rexnord Corp.

The IPOs come on the heels of sales last week by Palo Alto Networks Inc., Kayak Software Corp. and teen retailer Five Below Inc., which surged on their first trading days. Tex-Mex restaurant chain Chuy’s raised $75.8 million on July 23 and jumped 16 percent in its debut, giving further impetus to this week’s sellers even as concerns persist over Europe’s debt crisis and the economic recovery in the U.S., said James Investment Research Inc.’s Tom Mangan.

“There’s nothing like someone else’s success to encourage you to take that leap as well,” said Mangan, who helps oversee $3.4 billion at the Xenia, Ohio-based firm. “There’s some urgency on the part of people who want to proceed with an IPO because they’re afraid of what might happen later in the year.”

Have a wonderful weekend 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

As ever,

Carolann

Tact is the ability to describe others

as they see themselves.

-Abraham Lincoln, 1809-65

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

In three words I can sum up everything I’ve learned about life: it goes on. – Robert Frost

Hemingway’s publisher, Scribner, is releasing an edition of his 1929 classic with all 47 of his draft endings.  That’s right, he wrote 47 alternate endings to the novel and all of them will be appended in the upcoming edition.  Obviously, great writers take endings seriously.  Here’s the ending from the first edition:  “After a while I went out and left the hospital and walked back to the house in the rain.”

A few other great literary endings:

“…but my life now, my whole life, independently of anything that can happen to me, every minute of it is no longer meaningless as it was before, but has a positive meaning of goodness with which I have the power to invest it.”  -Anna Karenina, by Leo Tolstoy.

I lingered round them, under that benign sky; watched the moths fluttering among the heath and hare-bells; listened to the soft wind breathing through the grass; and wondered how anyone could ever imagine unquiet slumbers for the sleepers in that quiet earth.  –Wuthering Heights, by Emily Bronte.

Gazing up into the darkness I saw myself as a creature driven and derided by vanity; and my eyes burned with anguish and anger.  –Araby, from Dubliners, by James Joyce.

And on this day in…

1898 – Amelia Earhart is born.

1900 – Zelda Fitzgerald is born.

1911 – Machu Picchu discovered.
1969 – President Kennedy’s goal accomplished – Apollo 11 safely returns from its successful moon landing mission.
1974 – U.S. Supreme Court rules that President Nixon must surrender the Watergate tapes.
1567 – Mary, Queen of Scots, is imprisoned and forced to abdicate her throne to her 1-year-old son James VI.

photos of the day July 24, 2012

Visitors ride a large carousel next to the London Eye (l.) on the south bank of the river Thames in London.

Ben Curtis/AP

A rower practices before the 2012 Summer Olympics in Eton Dorney, near Windsor, Britain.

Natacha Pisarenko/AP

Market Closes for July 24, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 24 (Bloomberg) — Canadian stocks fell for a third day on growing speculation that Greece will miss debt-reduction targets and require more restructuring.

Energy shares and banks contributed the most to the decline in the Standard & Poor’s/TSX Composite Index among 10 industries, while telecommunications companies rose the most.

Encana Corp. and Canadian Natural Resources Ltd. fell at least2.7 percent. Rogers Communications Inc., the nation’s largest wireless carrier, gained 5.2 percent after reporting second- quarter earnings that beat analysts’ estimates.

The S&P/TSX declined 66.94 points, or 0.6 percent, to 11,478.60 at 1:23 p.m. in Toronto. The benchmark index advanced as much as 0.3 percent earlier.

A report from Reuters citing European Union officials said Greece was seen missing targets for reducing debt. On July 22, German Vice Chancellor Philipp Roesler said it was unlikely Greece could meet its obligations under a euro-area bailout program and that he was “very skeptical” European leaders would be able to rescue the country.

Greece’s international creditors returned to Athens today to assess how far from bailout terms the country has strayed as Prime Minister Antonis Samaras pieces together additional budget cuts that may determine the country’s membership in the euro area.

Energy provider Encana lost 2.7 percent to C$20.94.

Canadian Natural Resources declined 3.1 percent to C$27.89.

Suncor Energy Inc., the nation’s largest oil company, fell 1.2 percent to C$29.94.

Toronto-Dominion Bank, the nation’s second-largest lender, sank 1.1 percent to C$78.22. Bank of Nova Scotia, the third- largest lender, dropped 1 percent to C$50.86.

Rogers rose 5.2 percent to C$39.16 as job cuts lifted profitability at the company’s main mobile phone unit. Profit excluding some items rose 6 cents to 91 Canadian cents a share, beating the average estimate of 86 cents from 16 analysts compiled by Bloomberg.

US

By Rita Nazareth

July 24 (Bloomberg) — U.S. stocks slumped, sending the Standard & Poor’s 500 Index down for a third straight day, amid concern Europe’s debt crisis is worsening and after United Parcel Service Inc. lowered its earnings forecast.

Equities pared losses amid speculation the Federal Reserve may act to boost growth. UPS, the largest package-delivery company and considered an economic bellwether, tumbled 4.6 percent. AT&T Inc., the biggest U.S. phone company, lost 2.1 percent amid sluggish sales after signing up fewer wireless customers. Apple Inc., the most valuable company, sank 5 percent at 4:51 p.m. New York time on disappointing results.

More than three stocks fell for each rising on U.S. exchanges at 4 p.m. New York time. The S&P 500 slipped 0.9 percent to 1,338.31, paring a loss of 1.6 percent. The benchmark measure decreased 2.8 percent in three days. The Dow Jones Industrial Average lost 104.14 points, or 0.8 percent, to 12,617.32. Volume for exchange-listed stocks in the U.S. was 6.8 billion shares, or about in line with the three-month average.

“It’s far from over,” said Paul Zemsky, the New York- based head of asset allocation for ING Investment Management.

His firm oversees $160 billion. “There’s renewed euro crisis concern. As for earnings, it’s not much what the numbers are printing. There’s fear of what to expect going forward.”

Equities slumped as Moody’s Investors Service cut the outlooks of Germany, the Netherlands and Luxembourg. A Reuters report citing European Union officials said Greece was seen missing targets for reducing debt. German Vice Chancellor Philipp Roesler said over the weekend that Greece was unlikely to be able to meet its obligations under a bailout program.

Stocks pared losses after the Wall Street Journal reported that the Fed is moving closer to taking new steps to spur economic growth. Fed Chairman Ben S. Bernanke last week said policy makers are studying options for further easing that could be deployed in case economic growth remains too feeble to produce a lasting decline in unemployment.

“You’re at that point where the economy looks weak enough to make QE3 a real possibility,” said Dan Veru, chief investment officer at Palisade Capital Management LLC, which oversees $3.5 billion. He referred to a third round of asset purchases to stimulate the economy. “The downside to this market is more limited than what many people think it is.”

Investors also monitored second-quarter earnings. Data compiled by Bloomberg show better-than-estimated sales at only 39 percent of the 147 companies which have reported results so far. About 73 percent have beaten on profit, the data shows.

All 10 groups in the S&P 500 retreated. The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 1.7 percent. The Dow Jones Transportation Average retreated 1.2 percent. The Chicago Board Options Exchange Volatility Index rose 9.9 percent to 20.47, the highest level since June 15. It surged 32 percent in three days.

UPS slumped 4.6 percent, the most since August, to $74.34.

The company predicted the U.S. economy will grow 1 percent in the rest of 2012 as slowing volume growth prompted it to conclude average forecasts are too high. Economists surveyed by Bloomberg project a 2.2 percent growth rate. Rival FedEx Corp. lost 1.8 percent to $87.67.

Telephone shares in the S&P 500 fell 1.8 percent, the most among 10 groups. AT&T dropped 2.1 percent to $34.63. It added 320,000 monthly contract customers, a smaller number than a year earlier. While the decline hurt sales growth, it meant the company doled out fewer dollars in subsidies.

Apple lost 5 percent to $570.67 after the close of regular trading. Profit and sales missed projections for only the second time since 2003 as customers held off on iPhone purchases while waiting for a new model to be introduced later in the year.

Net income climbed 21 percent to $8.82 billion, or $9.32 a share, in the period that ended June 30, Cupertino, California- based Apple said today in a statement. Sales rose 23 percent to $35 billion. Analysts had predicted profit of $10.37 a share on revenue of $37.2 billion, the average of estimates compiled by Bloomberg.

“Every quarter that Apple isn’t launching a new iPhone it’s a transition quarter,” said Brian Marshall, an analyst at ISI Group. “That’s the key product that matters.”

Whirlpool Corp. retreated 7.5 percent to $62.25. The world’s largest appliance maker reported second-quarter profit that trailed analysts’ estimates.

Lexmark International Inc. slumped 13 percent to $16.77.

The maker of laser and inkjet printers forecast third-quarter profit that missed analysts’ estimate as the economic weakness in Europe erodes sales.

Peabody Energy Corp. dropped 11 percent to $20.55. The largest U.S. coal producer forecast third-quarter earnings that trailed analysts’ estimates after metallurgical-coal prices fell and Australia introduced a carbon tax.

Texas Instruments Inc. slid 0.9 percent to $26.57. The largest maker of analog chips forecast third-quarter sales and profit that may miss some analysts’ estimates as an economic slowdown in Europe crimps demand for electronics.

DuPont Co. decreased 2 percent to $47.74. The chemical maker said 2012 profit will be at the lower end of a previously forecast range because of uncertainties created by weaker global economies and foreign currencies.

The Bloomberg U.S. For-Profit Education Index of 13 shares sank 7.8 percent. DeVry Inc. plunged 25 percent to $20.80. The for-profit education company said it plans to cut 570 jobs, or 5.5 percent of its total headcount, amid declining enrollment.

Cisco Systems Inc. sank 5.9 percent, the most in the Dow, to $15.12. VMware Inc. is buying Nicira Inc. for $1.26 billion and the products could help VMware lessen the need for types of networking equipment sold by Cisco, said ISI Group.

Clearwire Corp. lost 9.8 percent to 92 cents. The unprofitable company attempting to build a wireless network across the U.S. fell below $1 amid concern that it’s running out of money. Analysts are projecting a loss of more than $200 million when it releases its second-quarter results on July 26.

Pfizer Inc. fell 1 percent to $23.38. The company, Johnson & Johnson and Elan Corp.’s experimental Alzheimer’s treatment failed to improve symptoms of dementia in the first of four pivotal studies testing the drug.

The Bloomberg U.S. Airlines Index dropped 3.1 percent.

United Continental Holdings Inc. slumped 5.4 percent to $20.38 after a JPMorgan Chase & Co. analyst reduced his second-quarter profit forecast based on an accounting adjustment at the world’s largest airline.

Regions Financial Corp. gained 4.1 percent to $6.65. The 10th-largest U.S. bank by deposits reported second-quarter profit that rose more than analysts estimated as provisions for loan-loss reserves declined.

Ryder System Inc. added 5.9 percent to $36.72 as the largest publicly traded truck lessor boosted its full-year and third-quarter profit forecasts.

Under Armour Inc. surged 9.1 percent to $52.79. The maker of athletic apparel and shoes raised its annual sales and profit forecasts amid increased demand.

Domino’s Pizza Inc. jumped 3 percent to $32.96 after second-quarter earnings topped analysts’ estimates on increasing international sales.

The two-day selloff in equities through yesterday pushed bets that the Chicago Board Options Exchange Volatility Index will keep rising to the most in a year.

The ratio of outstanding calls to buy the VIX jumped to 2-to-1 on July 20, according to data compiled by Bloomberg. The gauge climbed 21 percent from July 20 to 18.62 yesterday, the biggest two-day increase since April, as the Standard & Poor’s 500 Index slipped 1.9 percent.

Have a wonderful evening everyone.

Be magnificent!

You can live with few clothes or with one meal a day, but that is not simplicity.

So be simple, don’t live in a complicated way, contradictory and so on, just be simple inwardly.

Krishnamurti, 1895-1986

As Ever,

Carolann

For death is no more than a turning of us over from time to eternity.

-William Penn, 1644-1718

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

photos of the day July 23, 2012

Former US Congresswoman Gabrielle Giffords (c.) stands with her husband Mark Kelly (r.), NASA astronaut and commander of mission STS-134, and mountain guide Vincent Lameyre before Kelly and two other astronauts walk from L’Aiguille du Midi to the Refuge des Cosmiques near Mont-Blanc in Chamonix, France.

A chapel stands during morning sun next to the lake as mist rises from the water in the Melchsee-Frutt region in the central Alps in Switzerland.

Sigi Tischler/Keystone/AP

Market Closes for July 23, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 23 (Bloomberg) — Canadian stocks retreated as commodities fell on concern that Europe’s debt crisis is deepening and China, the world’s largest consumer of energy and base metals, may face slowing economic growth.

Barrick Gold Corp. fell 2.3 percent while Potash Corp. of Saskatchewan Inc. slipped 0.7 percent. Banks and raw materials stocks were the biggest drag on the Standard & Poor’s/TSX Composite Index among 10 industries. Nexen Inc. soared 52 percent as Cnooc Ltd. agreed to pay $15.1 billion in cash to acquire the energy company, making it the biggest overseas takeover by a Chinese company.

The S&P/TSX lost 77.37 points, or 0.7 percent, to 11,545.54, after tumbling as much as 1.8 percent earlier. The benchmark index is down 3.4 percent in 2012.

“The European debt situation refuses to go away. It’s just a question of when people stop caring. At the moment, it looks like it’s about Spain,” Brendan Caldwell, who manages C$1 billion as president of Caldwell Investment Management, said in a phone interview. “Also, the Chinese economy may be slowing, but at the very least they’re saying it’s slowing, which is enough to bring commodity prices lower.”

Canadian stocks joined a global slump before the arrival in Athens tomorrow of Greece’s troika of international creditors — the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of regions that may tap aid from the central government. Spain’s 10-year yields surged above 7.5 percent for the first time.

Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, predicted the nation’s expansion may cool to 7.4 percent this quarter.

Barrick Gold, the largest producer of the metal in the country, declined 2.3 percent to C$34.14 as gold fell 0.3 percent to settle at $1,577.40 an ounce on the Comex in New York. Goldcorp Inc. slipped 1.7 percent to C$33.47. Yamana Gold Inc., the third biggest Canadian gold producer, fell 1.7 percent to C$14.30.

Potash Corp., the largest fertilizer producer in the world, slipped 0.7 percent to C$45.71. Teck Resources Ltd. tumbled 2.6 percent to C$29.80.

Encana Corp. added 3.7 percent to C$21.53. Suncor Energy Inc. erased 0.5 percent to C$30.30 as oil declined 4 percent in New York.

Churchill Corp. fell 28 percent, the biggest decline since 1997, to C$8.49. The Calgary-based construction company focused on western Canada said second-quarter results would be “materially below” analysts’ estimates due to poor weather and delays.

Royal Bank of Canada, the nation’s largest lender, lost 1.7 percent to C$51.52. Toronto-Dominion Bank, the second-largest lender, dropped 1.2 percent to C$79.05. Bank of Nova Scotia, the third-largest lender, retreated 1.5 percent to C$51.39.

Nexen, the Calgary-based crude oil producer with operations in Canada, Gulf of Mexico, and Yemen, jumped 52 percent to C$26.35 as the company was acquired by Cnooc, China’s largest offshore oil and gas explorer. It’s the biggest gain since 1987, when the company was known as Canadian Occidental Petroleum Ltd.

Cnooc is paying $27.50 for each common share, a premium of 61 percent to Calgary-based Nexen’s closing price on July 20, according to its statement to the Hong Kong stock exchange today. Nexen’s board recommended the deal to its shareholders.

Talisman Energy advanced 6.8 percent to C$11.80, the most in eight months. China Petrochemical Corp., the nation’s biggest refiner, agreed to spend $1.5 billion for a 49 percent stake in Talisman’s U.K. unit, gaining access to oil and natural-gas fields in the North Sea.

Canada has become a fertile area for Chinese oil producers seeking to add oil and gas reserves to meet demand in the world’s largest energy-consuming country.

US

By Rita Nazareth

July 23 (Bloomberg) — U.S. stocks declined, sending the Standard & Poor’s 500 Index down for a second day, amid concern Europe’s debt crisis is deepening and after a Chinese central- bank adviser said the nation’s economic growth may slow further.

All 10 S&P 500 groups fell as commodity shares had the biggest losses. The Bloomberg China-US Equity Index of the most- traded Chinese shares in the U.S. sank 2.1 percent. McDonald’s Corp. slid 2.9 percent as profit trailed estimates. S&P 500 futures expiring in September lost 0.4 percent to 1,338.30 at 5:53 p.m. New York time as Moody’s Investors Service lowered the outlooks for Germany, the Netherlands and Luxembourg.

About five stocks fell for each rising on U.S. exchanges.

The S&P 500 fell 0.9 percent to 1,350.52 at 4 p.m. in New York, paring a loss of 1.8 percent. The Dow Jones Industrial Average dropped 101.11 points, or 0.8 percent, to 12,721.46. The Chicago Board Options Exchange Volatility Index rose 14 percent to 18.62. Volume for exchange-listed stocks in the U.S. was 6.4 billion shares, or 3.9 percent below the three-month average.

“Investors are on edge,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.56 trillion.

“Chinese growth has slowed. It’s not clear that the existing firewalls in Europe are large enough. We knew the Spanish regional governments had debt. The question is: how bad is it?”

Stocks fell as Spain’s 10-year bond yields rose to a euro- era high on bets more of its regions will ask for aid. Greece’s creditors meet this week, while German Vice Chancellor Philipp Roesler said he’s “very skeptical” European leaders will be able to rescue the nation. A Chinese central bank adviser said the country’s growth may cool to 7.4 percent this quarter.

After the market closed, Moody’s said it lowered Germany, the Netherlands and Luxembourg’s Aaa credit rating outlooks to negative, citing “rising uncertainty” about Europe’s debt crisis. Risks that Greece may leave the 17-nation euro currency and “increasing likelihood” of collective support for European countries such as Spain and Italy were among reasons for the change, Moody’s said today in a statement.

Concern about a global slowdown has led investors to a more defensive stance since the S&P 500’s 2012 high in April. Phone, utility, consumer staple and health-care companies were the only ones to gain among 10 groups during that period. Financial shares have slumped 11 percent, the most in the S&P 500.

The Morgan Stanley Cyclical Index of companies most-tied tied to the economy lost 1.2 percent today. Alcoa Inc., the largest U.S. aluminum producer, slid 1.5 percent to $8.14.

Microsoft Corp., the biggest software maker, dropped 2.8 percent to $29.28. Citigroup Inc. fell 2.1 percent to $25.34.

Investors also watched corporate results. Sales rose an average 3 percent in the second quarter among 123 members of the S&P 500 that have reported results so far, according to data compiled by Bloomberg. Only 41 percent of the reported companies have topped analysts’ estimates on sales, while 73 percent have beaten on profit, the data show.

McDonald’s slipped 2.9 percent to $88.94. The restaurant chain also said it may miss its full-year operating income growth target. Chief Executive Officer Don Thompson, who took the helm earlier this month, has struggled to lure budget- conscious Americans with a new extra-value menu. Sales at stores open at least 13 months in the U.S. rose 3.6 percent, the slowest growth in five quarters.

Cisco Systems Inc. retreated 1.8 percent to $16.07. The company said it is eliminating about 1,300 jobs, or 2 percent of the workforce, part of an effort to eliminate costs and streamline decision making.

Apple Inc. lost 0.1 percent to $603.83. The world’s largest company by market value reports quarterly results tomorrow. With a redesigned model probably arriving by October, analysts estimate that sales of iPhones — Apple’s biggest source of revenue — slid in the fiscal third quarter from prior periods.

While analysts predict that the next iPhone will be the best- selling smartphone yet from Apple, the purchasing delays will probably weigh down results until the device hits stores.

Facebook Inc. dropped less than 0.1 percent to $28.75. The biggest social-networking company reports results this week.

Sales probably rose 30 percent to $1.16 billion in the June period, according to analyst predictions compiled by Bloomberg.

That would be the slowest growth rate yet disclosed by the company co-founded by Mark Zuckerberg in 2004.

Nine out of 11 stocks in a measure of homebuilders in S&P indexes advanced. U.S. homebuilders are an attractive investment as the housing market starts a “strong” recovery that may drive a surge in new-home sales, Goldman Sachs Group Inc. said in a report today. KB Home added 3.6 percent to $10.16.

PulteGroup Inc. rose 1.4 percent to $11.01.

Hasbro Inc. climbed 4 percent to $35.19. The world’s second-largest toymaker reported second-quarter profit that topped analysts’ estimates as price increases boosted margins.

Halliburton Co. rallied 2.4 percent to $31.51. The world’s largest provider of hydraulic-fracturing services said international sales climbed as the rig count and profit margin grew in the Eastern Hemisphere.

Eaton Corp. rose 3.9 percent to $40.57. Its U.S. electrical equipment sales rose ahead of the company’s expansion in the industry through the acquisition of Cooper Industries Plc.

U.S. shares of Nexen Inc. surged 52 percent to $25.90.

Cnooc Ltd. agreed to pay $15.1 billion in cash for Calgary-based Nexen in the biggest overseas acquisition by a Chinese company.

NRG Energy Inc. jumped 8.1 percent, the most in the S&P 500, to $19.52. Its $1.7 billion agreement to buy GenOn Energy Inc. would create the largest U.S. independent electricity generator with more market strength to withstand slumping power prices. GenOn surged 26 percent to $2.29.

RailAmerica Inc. advanced 9.8 percent to $27.25, the highest since it went public in 2009. Genesee & Wyoming Inc. agreed to purchase it for $1.39 billion to combine North America’s two largest short-line and regional rail operators.

Peet’s Coffee & Tea Inc. gained 28 percent to $73.05. Joh.A. Benckiser agreed to buy Peet’s, giving the closely held German holding company about 190 specialty cafes in the U.S. and access to an expanding grocery business.

Better-than-forecast earnings are masking weaker sales growth in the most recent quarter as U.S. companies improve margins to top estimates.

The gap in results signals companies may hold off hiring and expanding until demand rebounds globally. Federal Reserve Chairman Ben S. Bernanke told lawmakers last week that progress in reducing unemployment may be “frustratingly slow” with joblessness stuck above 8 percent since February 2009.

Analysts have lowered predictions for profit and revenue in recent months. For earnings, they estimate a 1.6 percent decline on average among all S&P 500 members after anticipating a 0.5 percent increase in May. Revenue may rise 1.8 percent on average, down from a 3.7 percent estimate in May.

“People are sitting on the sidelines right now waiting to see what happens,” Verizon Communications Inc. Chief Financial Officer Fran Shammo said in a telephone interview last week after the New York-based company reported in-line second-quarter profit and sales. “This isn’t helping with growth, so I think we will continue to mosey along here in the states.”

Have  a wonderful evening everyone.

Be magnificent!

The first condition of humaneness is a little humility and a little diffidence

about the correctness of one’s conduct and a little receptiveness.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Be kind, for everyone you meet is

fighting a hard battle.

-Plato, 427 BC-347 BC.

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Today is Moon Day, a time to celebrate the anniversary of mankind’s first landing on the moon, July 20^th, 1969.  Two US astronauts, Neil Armstrong and Edwin Aldrin, Jr., landed lunar module Eagle at 4:17 pm, EDT and remained on the lunar surface 21 hours, 36 minutes, and 16 seconds.  The landing was made from the Apollo Xl’s orbiting command and service module, code named Columbia, whose pilot, Michael Collins, remained aboard.  Armstrong was the first to set foot on the moon.  Armstrong and Aldrin were outside the spacecraft, walking on the moon’s surface, approximately 2 ¼ hours.  The astronauts returned to Earth July 24, bringing photographs and rock samples. –from Chase’s Calendar of Events.

MOONSHADOW

I’m being followed by a moon shadow

Moon shadow moon shadow

Leaping and hopping on a moon shadow

Moon shadow moon shadow…

-Cat Stevens

And on this day in…

1919 – Sir Edmund Hilary is born.  It is not the mountain we conquer, but ourselves. -Sir Edmund Hillary.

1944 – Adolf Hitler is wounded in a failed assassination attempt by German Army officers at Rastenburg.

1947 – Carlos Santana is born.
1951 – King Abdullah of Jordan is assassinated.
1969 – Neil Armstrong and Edwin “Buzz” Aldrin become the first men to walk on the moon.
1976 – The Viking spacecraft lands on Mars and begins taking soil samples.
1973 – Actor Bruce Lee dies, aged 32.
photos of the day July 20, 2012

Workers use a crane to put a large installation of the Olympic rings in place in the Olympic Park in London.

Ben Curtis/AP

Children catch fish in flood-affected Burhaburhi village, east of Gauhati, India.

Anupam Nath/AP

Market Closes for July 20, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 20 (Bloomberg) — Canadian stocks fell for the first time in six days as crude tumbled and commodities retreated over concern the debt crisis in Europe is worsening.

Cenovus Energy Inc. lost 1.2 percent and RMP Energy Inc. declined 6.3 percent. Bank of Nova Scotia, the third-largest lender in the country, dropped 0.9 percent. Kinross Gold Corp. rose 1.1 percent as gold advanced in New York. Energy companies and banks contributed the most among 10 industries to the decline of the Standard & Poor’s/TSX Composite Index.

The S&P/TSX fell 42.79 points, or 0.4 percent, to 11,622.91. The benchmark index rose 0.9 percent this week and has lost 2.8 percent in 2012.

“Trading is really driven by concerns in Europe today,”

Jeffrey Bradacs, who manages C$1.7 billion at Toronto-based Manulife Asset Management, said in a phone interview. “There are lagging concerns with Spain’s debt costs continuing to increase, and the oil price, as a result, has been volatile. Today is about risk-off trade.”

Oil declined 1.3 percent in New York, snapping seven days of gains to settle at $91.44 a barrel on the New York Mercantile Exchange. Spain said the recession will extend into next year as the region of Valencia prepared to seek a rescue from the central government and European finance ministers approved the bailout of Spanish banks.

The S&P GSCI gauge of commodities slipped 0.4 percent.

Suncor Energy Inc., the nation’s largest oil company, lost 0.4 percent to C$30.46. Cenovus declined 1.2 percent to C$32.54.

Imperial Oil Ltd., the nation’s second-largest energy provider, retreated 0.3 percent to C$43.69. RMP Energy, the Calgary-based oil and gas producer with sites in Alberta, declined 6.3 percent to C$1.78.

Bank of Nova Scotia dropped 0.9 percent to C$52.15. Royal Bank of Canada, the country’s largest lender, slipped 0.5 percent to C$52.41. Toronto-Dominion Bank, the second-largest lender, fell 0.6 percent to C$80.

Kinross Gold added 1.1 percent to C$8.16. Goldcorp Inc. rose 1.3 percent to C$34.04. Yamana Gold Inc. gained 1.8 percent to C$14.55.

US

By Rita Nazareth

July 20 (Bloomberg) — The Standard & Poor’s 500 Index fell, capping the biggest decline in about a month, as the euro tumbled after Spain said the recession will extend into next year and concern about its regional governments’ finances grew.

Bank of America Corp. and JPMorgan Chase & Co. dropped at least 1.6 percent, amid a plunge in European lenders, as Spain’s bond yields rose to a euro-era record. Raw material shares in the S&P 500 fell on news China won’t relax property control policies, intensifying concern an economic slowdown could reduce demand for commodities. Restaurant shares tumbled as Chipotle Mexican Grill Inc. plunged 22 percent on disappointing sales.

The S&P 500 lost 1 percent to 1,362.66 at 4 p.m. New York time. It rose 1.7 percent over the previous three days. The Dow Jones Industrial Average fell 120.79 points, or 0.9 percent, to 12,822.57. The euro weakened to the lowest versus the yen since November 2000. Volume for exchange-listed stocks in the U.S. was 6.8 billion shares, about in line with the three-month average.

“The problem is everywhere,” said Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York. “Once the disease starts, it seems hard to stop and you wonder whether the euro will survive. There’s also concern about China’s statement because their actions have been more supportive of asset prices.”

Global equities fell in a vote of no-confidence to European authorities after the final approval of a bailout of Spanish banks. Valencia, the second-most indebted region, said it would tap an emergency-loan fund. Italy’s Prime Minister Mario Monti blamed unrest in Spain for surging borrowing costs.

“The problem hasn’t gone away and the unnerving part is that it’s deepening,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland. “The Spanish ghost is rising again. It’s not only the banks. The regional governments also need help. Things are not better yet.”

Concern about a global slowdown also grew today as China will seek to keep a “firm grip” on the real estate market to prevent a rebound in housing prices, Xinhua News Agency reported. The Morgan Stanley Cyclical Index, which tracks companies most-dependent on economic growth, slid 1.7 percent.

Expectations for stimulus measures and better-than- estimated profits still gave the S&P 500 its second straight weekly gain. Earnings have exceeded analysts’ forecasts at 73 percent of the 118 S&P 500 companies that have reported quarterly results, according to data compiled by Bloomberg.

Financial shares dropped the most among 10 S&P 500 groups, declining 1.5 percent. Bank of America lost 2.6 percent to $7.07. JPMorgan fell 1.6 percent to $33.90.

Wall Street’s five biggest banks reported the worst start to a year since 2008. JPMorgan, Bank of America, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley had combined first- half revenue of $161 billion, down 4.5 percent from 2011 and the lowest since $135 billion four years ago.

Raw material shares also slumped as a rally in the U.S. dollar reduced the appeal of commodities. The S&P GSCI gauge of commodities slid 0.4 percent. Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, retreated 1.9 percent to $33.77.

All 24 stocks in the S&P Supercomposite Restaurants Index retreated. Chipotle Mexican tumbled 22 percent, the most since its initial public offering in 2006, to $316.98. The best- performing restaurant stock in the S&P 500 last year reported second-quarter sales that trailed analysts’ estimates.

McDonald’s Corp., the largest restaurant chain, dropped 1.3 percent to $91.58. Yum! Brands Inc., owner of the KFC and Taco Bell brands, lost 1.4 percent to $64.95.

Xerox Corp. slumped 6.8 percent to $6.70. The provider of printers and business services cut its full-year profit forecast as the economic slump in Europe crimped demand for technology.

Advanced Micro Devices Inc. tumbled 13 percent to $4.22, the lowest price since 2009. The maker of processors for personal computers predicted a revenue decline as a sluggish economy curbs PC sales.

Freescale Semiconductor Ltd. lost 6.5 percent to $9.55. The maker of semiconductor processors forecast third-quarter revenue that missed analysts’ estimates.

Avon Products Inc. slipped 5.3 percent to $15.73 as investors reacted to an announcement that general counsel Kim Rucker plans to leave the company for another post.

Cepheid Inc. decreased 18 percent, the most since 2009, to $36.01. The maker of health-care diagnostics said 2012 profit would be lower than previously forecast.

SanDisk Corp. rallied 10 percent, the most since May 2010, to $38.70. The shares also had the biggest gain in the S&P 500.

The maker of flash memory for mobile devices reported second- quarter profit that topped analysts’ estimates.

Google Inc. advanced 3 percent to $610.82. The owner of the most popular search engine said second-quarter revenue surged 35 percent, helped by its acquisition of Motorola Mobility Holdings and as more users clicked on advertisements.

Energy shares in the S&P 500 rose even as oil dropped for the first time in eight days. Natural gas futures closed above $3 for the first time in six months.

Baker Hughes Inc. jumped 9.2 percent to $45.59 after the third-largest oilfield-services company reported second-quarter profit that beat analysts’ estimates.

Schlumberger Ltd. added 1 percent to $69.33. The world’s largest oilfield-services provider said second-quarter profit rose as customers increased their quest for crude outside the U.S. and Canada onshore market.

General Electric Co. rose 0.4 percent to $19.87. Earnings climbed 7 percent in the second quarter after profit growth at the finance and energy units overcame a drop in wind-turbine orders. Revenue rose 2 percent to $36.5 billion, trailing analysts’ estimates of $36.8 billion.

A measure of homebuilders in S&P indexes jumped 2.6 percent. PulteGroup Inc. rallied 3.7 percent to $10.86. D.R. Horton Inc. added 2.2 percent to $18.88.

Palo Alto Networks Inc. and Kayak Software Corp. jumped in their trading debuts after raising more than planned in initial public offerings, bolstering the revival in technology IPOs.

Palo Alto, a provider of Internet-firewall technology, climbed 27 percent to $53.13, while Kayak, the travel-site operator, rose 28 percent to $33.18.

Onyx Pharmaceuticals Inc. increased 12 percent to $76.38 as a treatment for a deadly blood cancer won U.S. approval, giving the company its first wholly owned drug to sell.

The cost of protecting against U.S. equity losses is dropping at the fastest rate in more than three years, pushed lower by speculation the Federal Reserve will stimulate the economy as concern about Europe recedes.

Puts with an exercise level 10 percent below the S&P 500 cost 8.73 points more than calls 10 percent above on July 18, the lowest since May 2011, according to data on three-month contracts compiled by Bloomberg. The price relationship known as skew shrunk 32 percent since its June 15 high, the biggest decline since March 2009 over comparable periods.

U.S. shares jumped in the past month as optimism grew that European leaders would be able to contain the region’s crisis and investors speculated the Fed will increase stimulus measures. Fed Chairman Ben S. Bernanke this week told senators the central bank is prepared to act to boost growth if the labor market doesn’t improve.

“The acute concern about Europe’s debt crisis has faded somewhat, and markets have become a bit more complacent,” Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., which has more than $120 billion in client assets, said yesterday in a phone interview. “The market has moved very quickly to now speculate about the next round of monetary easing, anticipating some kind of policy response.”

Have a wonderful weekend everyone.

Be magnificent!

What is the world?  It is the earth below and the sky above and the air in space that connects them.

What is light?  It is fire below and the sun above – and the lightning that connects them.

What is education?  It is the teacher above and the disciple below – and the wisdom that connects them.

Taittiriya Upanishad

As ever,

Carolann

All generalizations are dangerous, even this one.

-Alexander Dumas, 1802-1870

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

A summer camp named VEBYNIN:  Each letter stood for a quality the children who attended were encouraged to express in their daily activities:  Vision, Enthusiasm, Bravery, Yieldingness, Naturalness, Inspiration, Newness.

Sir Walter Scott wrote in his journal on July 18, 1827:

My nerves have for these two or three last days been susceptible of an acute excitement from the slightest causes; the beauty of the evening, the sighing of the summer breeze, brings the tears into my eyes not unpleasingly…

And on this day in…

64 (AD) – Nero’s Rome burns.

1918 – Nelson Mandela was born.

1936 – Spanish Civil War begins.

1939 – Hunter S. Thompson was born.

1940 – FDR is elected for an unprecedented third term.

1969 – Incident on Chappaquiddick Island, Edward Kennedy.

1994 – A massive car bomb in Buenos Aires kills 96.

It was never my thinking that made the big money for me.  It was always my sitting.  Got that?  My sitting tight!

-Jesse Livermore, How to Trade in Stocks, 1877-1940

photos of the day

July 18, 2012

A visitor walks through a sculpture by Ukrainian artist Zinayida Likhachova in the museum of Ukrainian traditional architecture in Pyrogovo, Kiev, Ukraine.

Anatolii Stepanov/Reuters

An artist creates a sand sculpture on a beach of the Peter and Paul Fortress in St. Petersburg, Russia.

Alexander Demianchuk/Reuters

Market Closes for July 18, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Julia Leite and Katia Dmitrieva

July 18 (Bloomberg) — Canadian stocks rose for a fourth day as oil prices topped $90 a barrel for the first time since May and U.S. Federal Reserve Chairman Ben S. Bernanke said he is prepared to take further action on stimulus if warranted.

Cogeco Cable Inc. plunged 15 percent, the most since 2006, after the cable-television company agreed to buy Atlantic Broadband for $1.36 billion. Enerplus Corp., an oil and gas producer, climbed 5.7 percent after Barclays Plc analysts raised the stock to equalweight from underweight. Goldcorp Inc. declined 3.6 percent as gold declined the most in a week.

The Standard & Poor’s/TSX Composite Index gained 7.96 points, or less than 0.1 percent, to 11,579.15. The benchmark index has fallen 3.1 percent in 2012. Banks and energy companies contributed the most among 10 industries to the advance in the gauge. Raw-materials stocks fell the most.

Beginning construction of U.S. homes rose more than forecast in June to the fastest rate in almost four years, indicating a brighter outlook for the residential real estate market. Bernanke assured lawmakers the Fed can limit inflation while providing record stimulus and won’t allow consumer prices to rise in return for faster economic growth.

“We’re in oversold conditions, and projecting the Fed is going to act,” Robert Sneddon, president of Oakville, Ontario- based CastleMoore Inc., said in a phone interview.

Oil rose after the U.S. Energy Department reported crude- oil inventories fell less than expected, by 809,000 barrels to 377.4 million. The median forecast of 10 analysts surveyed by Bloomberg was a decline of 1.3 million barrels of crude.

Crude for August delivery increased 65 cents, or 0.7 percent, to settle at $89.87 a barrel on the New York Mercantile Exchange. The price ranged from $88.59 to $90.04, the highest intraday level since May 30.

Suncor Energy Inc., the nation’s largest oil company, gained 0.7 percent to C$30.20. Canadian Natural Resources Ltd., the nation’s third-largest energy provider, advanced 2.8 percent, to C$28.07. Enerplus climbed 5.7 percent to C$14.03.

Cogeco Cable plunged 15 percent to C$37.90. The deal, which will aid the company’s U.S. expansion, is expected to be completed by year-end.

The Bank of Canada’s monetary policy report said consumer and business investment will lead modest economic growth through 2014 while weaker global demand curbs exports. Consumption and housing spending will account for nearly three-quarters of a 2.1 percent expansion this year, the central bank said.

Goldcorp dropped 3.6 percent to C$32.86. Barrick Gold Corp. fell 1.2 percent to C$34.66. Yamana Gold Inc. declined 3.1 percent to C$14.51.

US

By Inyoung Hwang

July 18 (Bloomberg) — U.S. stocks rose for a second day after companies from Intel Corp. to Honeywell International Inc. reported profit that beat estimates and housing starts increased to the fastest rate in almost four years.

Technology stocks had the biggest advance out of 10 groups in the Standard & Poor’s 500 Index as Intel jumped 3.6 percent after posting profit that topped projections while scaling back its annual sales forecast. Honeywell surged 7.1 percent, pacing gains in industrial companies. EMC Corp. rallied 9.8 percent after announcing a new chief executive officer at VMWare Inc., the software maker in which it owns a majority stake.

The S&P 500 gained 0.4 percent to 1,369.42 at 2:50 p.m. in New York. The benchmark gauge jumped 0.7 percent yesterday. The Dow Jones Industrial Average added 76.03 points, or 0.6 percent, to 12,880.24.

“There’s some reduced pessimism about earnings season and the outlook going forward,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview.

“People were expecting worse numbers from lots of companies.”

Housing starts rose 6.9 percent last month to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported. The median forecast of 79 economists surveyed by Bloomberg News called for a 745,000 rate. Building permits fell, reflecting a drop in applications for apartment construction.

Federal Reserve Chairman Ben S. Bernanke reiterated during his second day of testimony to Congress that the U.S. fiscal situation is “unsustainable.” The central bank said in its survey that is based on reports from its 12 district banks that the world’s largest economy expanded at a “modest to moderate” pace in June and early July, as retail sales and manufacturing cooled in some regions.

Stocks rallied yesterday after Bernanke told senators the central bank is prepared to act to boost growth if the labor market doesn’t improve. The S&P 500 has fallen 3.3 percent since reaching a four-year high in April, as technology and financial companies led declines in equities amid deteriorating economic data and as investors braced for the first decline in quarterly profits since 2009.

Credit Suisse Group AG cut its year-end forecast for the S&P 500 to 1,425 from 1,440, citing the potential of a U.S. economic recession induced by so-called fiscal cliff. Andrew Garthwaite, global equity strategist at Credit Suisse, said he sees a 10 percent chance of the economy contracting should lawmakers do nothing to prevent about $607 billion of tax increases and spending cuts from kicking in at the end of the year. He lowered the 2012 per-share earnings estimate for S&P 500 companies by $1 to $99.6.

Earnings have exceeded analyst estimates at 73 percent of the 63 companies in the S&P 500 that have reported results so far, according to data compiled by Bloomberg. Profits have slumped 4.6 percent for the group and the entire index is projected to report a 2.1 percent decrease in earnings.

Technology and industrial companies had the biggest gains today, rising 1.9 percent and 1.7 percent respectively. Intel, Cisco Systems Inc., Hewlett-Packard Co. and International Business Machines Corp. advanced at least 2.3 percent for the biggest gains in the Dow.

Technology companies “were oversold and due for a bounce,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said by phone. Earnings reports weren’t “as bad as people had expected them to be. That was enough to invite investors to come in and scoop up some attractive names.”

Intel rallied 3.6 percent to $26.30 after reporting second- quarter profit was 54 cents a share, exceeding the average analyst estimate by 2 cents. The world’s largest semiconductor maker also scaled back its annual sales forecast as personal- computer demand fails to rebound among consumers in the U.S. and Europe.

“Intel lowered guidance but it was not unexpected and not disastrous,” Michael James, a managing director of equity trading at Wedbush Securities Inc. in Los Angeles, said in an e- mail. “Pessimism was pretty high and we’re now seeing people both covering and getting long some names. Intel’s leading the the technology group higher.”

Honeywell gained 7.1 percent to $58.41. The company reported second-quarter profit that beat analysts’ estimates, driven by sales in its aerospace unit. The company, which sells airplane parts from navigational systems to brakes, is benefiting from an increase in aircraft production as Boeing Co., Airbus SAS and other plane makers seek to whittle down large backlogs of orders.

EMC surged 9.8 percent to $25.16. The software company said Pat Gelsinger will succeed Paul Maritz as chief executive officer of VMware, giving new management the task of pursuing new products and stepping up growth at the software maker under its control. Maritz will return to EMC, which owns 79 percent of VMware, as chief strategist. VMWare jumped 13 percent to $90.48.

Amphenol Corp. rallied 15 percent to $58.88 for the biggest gain in the S&P 500. The maker of fiber-optic cables lifted its forecast for earnings this year to as much as $3.44 a share from no more than $3.38. That compares with the average analyst estimate of $3.34.

W.W. Grainger Inc. led gains in industrial stocks, rising 11 percent to $210.09. The distributor of building maintenance supplies boosted the lower end of its profit forecast for 2012 to at least $10.50 a share from as little as $10.40.

Have a wonderful evening everyone.

Be magnificent!

By education I mean an all-round drawing out of the best in a child and man – body, mind, and spirit.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

You have enemies?  Good.  That means you’ve stood up for something,

sometime in your life.

-Winston Churchill, 1874-1965

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Tangents:

I read an article last night in the most recent edition of Maclean’s which will be troubling for us all, especially vegetarians.  It is entitled The Secret Life of Plants – Even if they can’t hear a word you say, a botanist says they can see, smell and feel.

Plant biologist Daniel Chamovitz says that, for instance, “a willow tree can ‘smell’ when another willow is being attacked by tent  caterpillars.  The infested tree produces salicylic acid, a chemical found in aspirin, which makes its leaves taste bitter and unpalatable.  At the same time, the chemical is released into the air, and that chemical message, received by healthy willows, triggers the same defence.  According to Chamovitz, the infested willow is signaling, ‘I’m sick! Beware! Defend yourselves!’….Plants can ‘see,’ too.  They monitor their environment all the time.  They know if you’re standing over them.  They know if you’re wearing a blue or red shirt.  ‘Plants see the same ultraviolet light that gives us sunburns and infrared light that heats us up.  they can tell when there’s very little light, like from a candle, or when it’s the middle of the day, or when the sun is about to set into the horizon.’….While hearing warns humans of speeding cars and other dangerous situations, plants can’t flee, so there’s no evolutionary reason for them to hear….Plants do ‘feel’ however.  A 1966 Colorado State University showed the cocklebur weed can die ‘simply by touching it for a few seconds each day,’ according to author Frank Salisbury.  .  this touch-based growth inhibition’ is an accepted phenomenon in plant biology…”  -Julia McKinnell

And on this day in…

1918 – Czar Nicholas II and family are executed.

1934 – Donald Sutherland, actor, is born.

1955 – Disneyland opens.
1967 – Jimi Hendrix drops out as opening act for The Monkees.
1975 – Superpowers meet in space.
1987 – Lt. Col. Oliver North and Rear-Admiral John Poindexter begin testifying to Congress regarding the Iran-Contra Affair.

We all live with the objective of being happy; our lives are all different and yet the same. – Ann Frank

photos of the day July 17, 2012

Dancers from the Bangarra Dance Theater perform a scene from their show ‘terrain’ at the Sydney Opera House in Sydney.

Rick Rycroft/AP

A man poses for a photograph near a 3D painting at the 2012 Magic Art Special Exhibition in Hangzhou, Zhejiang province, China, on Monday.

Stringer/Reuters

Market Closes for July 17, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 17 (Bloomberg) — Canadian stocks gained for a third day as rising oil prices drove energy shares higher and expectations grew that the U.S. Federal Reserve will take further action to boost growth.

Imperial Oil Ltd. and Canadian Natural Resources Ltd., two of the nation’s largest energy providers, added at least 1.4 percent. Heroux-Devtek Inc. surged 33 percent after the maker of landing gear agreed to sell four factories to Precision Castparts Corp. for C$300 million. Energy stocks contributed the most among 10 industries to the advance in the Standard & Poor’s/TSX Composite Index.

The S&P/TSX advanced 50.01 points, or 0.4 percent, to 11,571.19. It lost as much as 0.4 percent in earlier trading.

The gauge is down 3.2 percent in 2012.

Fed Chairman Ben S. Bernanke told senators that the central bank is prepared to act to boost growth if the labor market doesn’t improve. Oil rallied 0.9 percent to a seven-week high after his comments and as a Bloomberg survey of analysts showed inventories of the commodity falling.

“Ben Bernanke understands that to make a deleveraging feel not as bad, you can add a lot more money to the system than you normally could,” Arthur Salzer, who manages C$200 million at Northland Wealth Management, said in a phone interview. “He’s doing everything in his power to keep the patient alive.”

Suncor Energy Inc., the nation’s largest oil producer, climbed 0.9 percent to C$29.99. Imperial Oil rallied 1.4 percent to C$43.13. Canadian Natural Resources gained 3.1 percent to C$27.31.

Pinecrest Energy Inc., a Calgary-based oil and gas explorer, advanced 12 percent to C$1.86 as CIBC analysts upgraded its stock to outperform from perform.

Heroux-Devtek rose 33 percent, its biggest gain since at least 1988, to C$10.42 on its sale announcement.

Gold miners declined as the metal fell for the second day on the Comex. Barrick Gold Corp., the world’s largest producer of the metal, lost 0.9 percent to C$35.08. Goldcorp Inc., the second-largest producer, slumped 0.5 percent to C$34.10.

AuRico Gold Inc. slid 13 percent to C$6.66, the most in nearly 11 months, as the company lowered its 2012 production forecast. Separately, the operator of three mines in Mexico and Canada said Chief Executive Officer Rene Marion will resign for health reasons.

US

By Inyoung Hwang and Julia Leite

July 17 (Bloomberg) — U.S. stocks rose, erasing earlier losses, as Federal Reserve Chairman Ben S. Bernanke told senators the central bank is prepared to act to boost growth if the labor market doesn’t improve.

All 10 groups in the Standard & Poor’s 500 Index rose. Walt Disney Co. rallied 3.1 percent to a record after Bank of America Corp. analysts raised the world’s largest entertainment company to a buy. Coca-Cola Co. advanced 1.6 percent after earnings beat projections. Mattel Inc. jumped 9.7 percent after second-quarter profit exceeded the average analyst estimate.

The S&P 500 added 0.7 percent to 1,363.67 at 4 p.m. in New York after losing as much as 0.6 percent. The Dow Jones Industrial Average increased 78.33 points, 0.6 percent, to 12,805.54. Trading of S&P 500 stocks was 4.6 percent below the average level at this time of day over the past three months.

“The stock market has faith in the Fed,” said Jack Ablin, chief investment officer at BMO Harris Private Bank in Chicago, which oversees about $60 billion of assets. “With all of the headlines, and all of the slowing, investors still believe the Fed will do anything in its power to keep the ship afloat.”

Stocks headed lower in the first hour of trading as Bernanke’s prepared testimony to Congress cited no specific details on the central bank’s plans, disappointing investors anticipating a more aggressive approach to helping the economy.

Equities recovered as Bernanke’s responses to senators boosted confidence that he’s prepared to take action.

The S&P 500 slipped in seven of the previous eight sessions and is down 3.9 percent from a four-year high in April as economic data trailed estimates and investors braced for the first decline in quarterly profits since 2009.

The Fed Chairman’s testimony follows data yesterday showing a contraction in June retail sales and a report today that the cost of living in the U.S. was little changed in June, a sign inflation may stay subdued.

The Citigroup Economic Surprise Index for the U.S., which measures how much data from the past three months is beating or missing the median estimates in Bloomberg surveys, is at minus 62.30, near the almost 11-month low of minus 64.9 reached last week. The gauge peaked at 91.9 in January.

Bernanke told lawmakers that progress in reducing unemployment is likely to be “frustratingly slow” and repeated that the central bank is ready to take further action to boost the recovery, while refraining from pledging any new policies.

“If after earnings season we see companies decide to make wholesale staff reductions because of lower top line sales growth, that could put the job market at risk, and then the Fed would act very promptly,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Atlanta which oversees about $47 billion, said by phone.

Profits beat estimates at 35 of the 49 companies in the S&P 500 that have reported quarterly results so far, data compiled by Bloomberg showed. Earnings are down 3 percent for the group and analysts forecast profits for the entire S&P 500 to decrease 2.1 percent.

Health-care, raw-material, telephone stocks and energy led gains among the 10 main S&P 500 industries by rising at least 1.1 percent.

Walt Disney rallied 3.1 percent to $49.35, its highest price ever, helping lead consumer discretionary stocks higher.

The company was raised to buy from neutral by Bank of America, which cited a boost to 2012 earnings from the film “Marvel’s The Avengers” and a contribution to profit next year from the opening of Cars Land.

Coca-Cola advanced 1.6 percent to $77.69. The world’s largest soft-drink maker reported second-quarter profit that topped analysts’ estimates, helped by pricing increases in North America late last year.

Mattel jumped 9.7 percent to $34.05 for the biggest gain in the S&P 500. The world’s largest toymaker surged the most in more than three years as price increases helped second-quarter profit and revenue top analyst estimates.

Sprint Nextel Corp., the third-largest U.S. wireless carrier, rose to the highest level since September after Credit Suisse Group AG boosted its price target for the stock, citing its network upgrade and cost management. Sprint advanced 5.5 percent to $3.65.

Mosaic Co. climbed 5.1 percent to $58.21. The fertilizer producer doubled its dividend and posted fourth-quarter earnings and revenue that beat analysts’ estimates after an extended spring season.

State Street Corp. slipped 6.4 percent, the most in the S&P 500, to $41.33. The third-largest custody bank agreed to buy the hedge-fund administration unit of Goldman Sachs Group Inc. to boost growth.

Have a wonderful evening everyone.

Be magnificent!

Man lives in confusion and fear until he discovers the uniformity of the law in nature;

until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason,

which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

No one has a finer command of language

than the person who keeps his mouth shut.

-Sam Rayburn, 1882-1961

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

This past weekend, we caught the wonderful exhibit at the Vancouver Art Gallery, Collecting Matisse and Modern Masters.  It is a fantastic show, so if you haven’t seen it yet, or if have an opportunity to do so before it ends in September, I’m sure you will have a wonderful experience.  Two sisters, Etta and Claribel Cone of Baltimore, began collecting art at the turn of the last century and became friends with many of the modern masters, including Matisse, Picasso, among others, during their many trips to Paris over several decades.

The show offers a wonderful narrative throughout and includes many objets d’art which they also collected in their travels around the world.  Interesting too, is correspondence between the sisters and artists during their lifetime, handwritten letters etc.  Their entire collection was donated to The Baltimore Museum of Art in 1949.

And on this day in…

1945 – Atomic Bomb tested.
1969 – Apollo 11 departs earth for moon.
1999- JFK Jr. killed in plane crash.
1790 – Congress declares Washington, D.C. new capital.
2002 – Bush unveils strategy for homeland security.
1940 – Marechal Petain becomes premier for occupied France.

Failure is a judgment, an opinion. It stems from your fears, which can be eliminated by love — love for yourself, love for what you do, love for others, and love for your planet. –  Wayne Dyer

photos of the day July 16, 2012

A man walks through the infinity room at the Team Great Britain Preparation Camp in Loughborough, central England.

Darren Staples/Reuters

A visitor walks through an installation entitled ‘Light Music’ by Lis Rhodes in The Tanks at Tate Modern in London.

Sang Tan/AP

Market Closes for July 16, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 16 (Bloomberg) — Canadian stocks rose for a second day as a rally in commodity prices offset concern over a slowing global economy.

Energy companies contributed most to the advance among 10 industries in the Standard & Poor’s/TSX Composite Index, while banks and raw-materials producers lost the most. Suncor Energy Inc., the nation’s largest oil company, advanced 1.1 percent.

Royal Bank of Canada and Bank of Nova Scotia retreated at least 0.2 percent.

The S&P/TSX added 6.65 points, or less than 0.1 percent, to 11,521.18. It fell as much as 0.4 percent and gained as much as 0.2 percent during the day.

The index has lost 3.6 percent in 2012.

The International Monetary Fund lowered its global growth estimate for 2013 to 3.9 percent from 4.1 percent, citing the debt crisis in Europe as a drag on emerging markets. Oil rose for a fourth day as manufacturing in the New York region expanded in July at a faster pace than anticipated.

“The IMF forecast plays into the whole global growth issue,” Chief Investment Officer Jeff Young at NexGen Financial Corp., who manages C$947 million, said in a phone interview.

“It may take some improvement in the leading indicators and some improvement in the economic data before the market regains confidence.”

The S&P GSCI Spot Index of commodities rallied 1.5 percent, with 15 of the 24 raw materials advancing. A U.S. drought drove grain prices higher on concern over falling harvests. Oil for August delivery rose $1.33 to settle at $88.43 a barrel on the New York Mercantile Exchange.

Suncor added 1.1 percent to C$29.72. Arc Resources Ltd., the western Canada oil and natural gas explorer, gained 3.2 percent to C$23.22. Imperial Oil Ltd., the second-largest energy provider in Canada, rose 0.4 percent to C$42.54.

MEG Energy Corp., a Calgary-based oil sands developer, jumped 7.2 percent to C$38.05, the most since April, after the company boosted output targets at its oil sands project in Alberta.

Royal Bank, the nation’s largest lender, lost 0.5 percent to C$52.18. Bank of Nova Scotia, the third-largest lender in Canada, retreated 0.2 percent to C$52.13.

Goldcorp Inc., the second-largest producer of the metal, dropped 0.6 percent to C$34.33. Kinross Gold Corp. slumped 0.7 percent to C$8.45.

First Quantum Minerals Ltd. declined 3.2 percent to C$16.97 as a strike at the company’s unit in Mauritania led to the death of an employee yesterday.

US

By Inyoung Hwang

July 16 (Bloomberg) — U.S. stocks fell, dragging the Standard & Poor’ 500 Index lower for the seventh time in eight days, after the International Monetary Fund cut its global economic forecast and retail sales unexpectedly dropped.

JPMorgan Chase & Co. lost 2.7 percent while Home Depot Inc. and Caterpillar Inc. dropped more than 1 percent to lead the Dow Jones Industrial Average lower. Equities pared losses as energy companies rose with the price of oil while Visa Inc. and MasterCard Inc., the world’s biggest payment networks, gained at least 1.7 percent after agreeing to a settlement of at least $6.05 billion in a price-fixing case.

The S&P 500 declined 0.2 percent to 1,353.64 at 4 p.m. New York time after earlier retreating as much as 0.6 percent. The Dow slipped 49.88 points, or 0.4 percent, to 12,727.21 today.

“The retail sales gives you another indicator that uncertainty has showed up in the consumer side,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. “We’re in a bit of the summer doldrums.”

The S&P 500 is down 4.6 percent from a four-year high in April as economic data trails forecasts and investors brace for what is projected to be the first decrease in quarterly earnings since 2009. The Citigroup Economic Surprise Index for the U.S., which measures how much data from the past three months is beating or missing the median estimates in Bloomberg surveys, is at minus 64, near the almost 11-month low of minus 64.9 reached last week.

U.S. retail sales dropped 0.5 percent in June, following a 0.2 percent decrease in May, Commerce Department figures showed today. The decline was worse than the most-pessimistic forecast in a Bloomberg News survey in which the median projection called for 0.2 percent rise.

The IMF cut its 2013 global growth forecast as Europe’s debt crisis prolongs Spain’s recession and slows expansions in emerging markets. Growth worldwide will be 3.9 percent next year, less than the 4.1 percent estimate in April, the fund predicted in an update of its World Economic Outlook.

Manufacturing in the New York region expanded in July at a faster pace than anticipated, signaling factories will keep contributing to growth. The Federal Reserve Bank of New York’s general economic index rose to 7.4 from 2.3 in June. The median forecast of 51 economists surveyed by Bloomberg News called for an increase to 4.0. Readings greater than zero signal expansion in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut.

Earnings beat estimates at 21 of the 32 companies in the S&P 500 that have reported quarterly results so far, data compiled by Bloomberg show. Profits probably decreased 2.1 percent in the second quarter, the first drop in almost three years, according to a Bloomberg survey of analysts.

JPMorgan Chase, the largest U.S. bank by assets, fell 2.7 percent to $35.09 after rallying 6 percent on July 13 as Chief Executive Officer Jamie Dimon predicted the company will still post record earnings this year despite a $4.4 billion trading loss in the second quarter.

The bank’s assertion that traders at its London chief investment office may have intentionally mismarked trades, masking losses that total at least $5.8 billion, makes little sense, according to former executives with direct knowledge of the unit’s operation.

Home Depot, the nation’s largest home-improvement retailer, slumped 1.2 percent to $51.45. Caterpillar, the world’s biggest maker of construction equipment, declined 1.1 percent to $81.15.

General Electric Co. lost 0.9 percent to $19.59, helping send industrial shares down 0.6 percent as a group for the biggest drop among 10 industries in the S&P 500. Morgan Stanley reduced its recommendation on the world’s biggest maker of jet engines, power generation equipment and locomotives to equalweight from overweight, citing the stock’s higher valuation relative to peers with or without GE Capital Corp.

Alpha Natural Resources Inc. declined 10 percent to $6.85 as Bank of Montreal cut its rating to underperform from outperform, citing potential financing issues. Arch Coal Inc., the fourth-largest U.S. producer of the fuel, sank 3.9 percent to $5.90 after BMO cut the stock to underperform from market perform.

Energy stocks added 0.3 percent after earlier falling as much as 0.8 percent as the price of crude oil reversed earlier declines to rise 1.5 percent to $88.43 a barrel. Chevron Corp., the second-largest U.S. energy company, climbed 0.7 percent to $106.78. Denbury Resources Inc., the oil and natural-gas producer, rallied 3.8 percent to $14.77.

MasterCard advanced 1.7 percent to $436.89 and Visa rose 2.5 percent to $127.15 after they agreed to settle a price- fixing case brought by retailers over credit-card swipe fees.

Citigroup Inc., the third-biggest U.S. bank, advanced 0.6 percent to $26.81 after reporting second-quarter profit that beat analysts’ estimates on revenue from advising on mergers and underwriting stocks and bonds.

Net income declined to $2.95 billion, or 95 cents a share, from $3.34 billion, or $1.09, a year earlier. Excluding accounting adjustments and a loss from the sale of a stake in a Turkish bank, earnings were $1 a share, compared with the average estimate of 89 cents in a Bloomberg survey of 18 analysts.

Gannett Co., the owner of 82 daily newspapers including USA Today, rallied 2.7 percent to $14.69. The company reported second-quarter profit that topped analysts’ estimates, bolstered by growing Internet revenue. Excluding some items, profit was 56 cents a share in the period, beating the 53-cent average estimate by analysts, according to data compiled by Bloomberg.

Have a wonderful evening everyone.

Be magnificent!

The main purpose of life is to live rightly, think rightly, act rightly.

The soul must languish when we give all our thought to the body.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Education is a progressive discovery

of our own ignorance.

-Will Durant, 1885-1981

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7