Category: Newsletters

 

Dear Friends,

 Tangents:  Birthday: Helen Keller, June 27, 1880

 Words of Wisdom from Helen Keller:

One can never consent to creep when one feels the impulse to soar.

 The world is full of suffering, but it is also full of people overcoming it.

 Many persons have a wrong idea of what constitutes true happiness.  It is not attained through self-gratification but through fidelity to a worthy purpose.

 We could never learn to be brave and patient, if there were only joy in the world.

 When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us.

 The best and most beautiful things in the world cannot be seen or even touched.  They must be felt within the heart.

Photos of the day 

June 27, 2011

Monica Ocampo of Mexico scores a goal against England during their Women’s World Cup Group B soccer match in Wolfsburg, Germany. Ina Fassbender/Reuters

Members of the Vienna State Opera Ballet (Wiener Staatsopernballett) perform on stage during a dress rehearsal of Nureyev Gala at the State Opera in Vienna, Austria. The Ballet will premiere on June 28, 2011. Lisi Niesner/Reuters

Market Commentary:

Canada

By Inyoung Hwang and Victoria Stilwell

June 27 (Bloomberg) — Canadian stocks swung between gains and losses after three days of declines, as bank shares gained after global regulators issued new capital rules and energy producers fell.

Toronto-Dominion Bank and Bank of Nova Scotia jumped at least 0.3 percent as financial companies advanced. Teck Resources Ltd. declined 0.9 percent as price of copper fell on concern Greece’s debt crisis will curb demand for industrial metals. Suncor Energy Inc. dropped 0.8 percent as oil sank after the International Energy Agency said it’s prepared to release additional crude from stockpiles.

The Standard & Poor’s/TSX Composite Index lost 7.58 points, or 0.1 percent, to 12,901.31 at 11:41 a.m. in Toronto after rising as much as 0.2 percent.

“This week is going to be a fairly volatile week — our eyes continue to be on the European issues that are going on with Greece,” said Youssef Zohny, a money manager at Van Arbor Asset Management Ltd. in Vancouver, which oversees about C$50 million ($51 million). The new capital rules “are seen more positive for Canadian-U.S. banks, so that’s giving a little bit of strength to the Canadian financial sector.”

The S&P/TSX broke a three-week losing streak last week as investors speculated Greece will be able to enact austerity measures and avoid default. Greek lawmakers are starting a three-day debate to approve an austerity package needed for the release of the next phase of an international bailout.

An index of financial stocks in the S&P/TSX rose 0.2 percent. Banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement Saturday. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.

Toronto-Dominion Bank, the country’s second-largest lender by assets, gained 0.3 percent to C$78.95. Bank of Nova Scotia climbed 0.5 percent to C$57.36.

 “Now we have clarity on the amount of capital needed for those financial institutions,” said Bob Decker, a money manager at Aurion Capital Management in Toronto, which oversees C$5.5 billion ($5.6 billion). “Just to know what the number is has created some confidence. There’s basically a wait-and-see attitude to find what the solution is going to be on these Grecian debts.”

Potash Corp of Saskatchewan Inc. increased 1.9 percent to C$52.88 as Horst Hueniken at Stifel Nicolaus & Co. said fertilizer stocks may continue to gain. Potash, the largest fertilizer producer by market value, has advanced 2.7 percent this year.

Investment in agriculture must rise by $90 billion a year to meet the world’s growing food needs, according to a study sponsored by businesses including Monsanto Co., DuPont Co., Archer Daniels Midland Co. and Deere & Co.

 The “investment gap” requires more private-sector involvement in agricultural and rural development, according to a report issued today by the Global Harvest Initiative, a collaboration between companies and nonprofits such as the World Wildlife Fund.

Teck, Canada’s largest base-metals and coal producer, lost 0.9 percent to C$45.54.

Energy stocks slumped 0.6 percent, the second-biggest decline in the S&P/TSX. Suncor lost 0.8 percent to C$36.70. Talisman Energy Inc. fell 1.3 percent to C$18.32. The IEA said June 23 its member states including the U.S. and Germany would release oil stockpiles for the third time in the agency’s history. The agency will act again if needed, Executive Director Nobuo Tanaka said June 25.

Yellow Media Inc. declined 18 percent, the most in the S&P/TSX. The directory publisher was cut to “underperform” from “neutral” at Credit Suisse Group AG, which cited a potential dividend cut and an accelerating decline in print business.

US

By Rita Nazareth and Cecile Vannucci

June 27 (Bloomberg) — U.S. stocks advanced, breaking a three-day losing streak for the Standard & Poor’s 500 Index, as regulators issued capital rules to safeguard the global financial system and technology companies rallied.

Bank of America Corp., U.S. Bancorp, Huntington Bancshares Inc. rose at least 2.7 percent as lenders climbed. Microsoft Corp. jumped 3.7 percent, helping to lead a gauge of technology shares in the S&P 500 to the biggest gain within 10 groups.

Amazon.com Inc. added 4.5 percent after Morgan Stanley added the world’s largest online retailer to its “Best Ideas” list.

The S&P 500 gained 0.9 percent to 1,280.10 at 4 p.m. in New York. The benchmark index for American equities had fallen 2.1 percent over the last three days. The Dow Jones Industrial Average rose 108.98 points, or 0.9 percent, to 12,043.56 today.

More than 6 billion shares changed hands on U.S. exchanges at 4:32 p.m., about 4.8 percent more than a week ago.

The requirements for banks “are less onerous than had been feared,” said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana.

“Sooner they’ll be able to return capital to shareholders through dividends and buybacks.”

The S&P 500 had retreated 7 percent from this year’s high at the end of April through June 24 amid concern about Europe’s debt crisis. Financial institutions in the measure slumped 9.9 percent, the second-biggest decline among 10 groups.                    

 Stocks rose today as global regulators said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement on June 25. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.

“The banks are going to have a greater chance of success reaching those capital thresholds,” said Keith Wirtz, Cincinnati-based chief investment officer for Fifth Third, which oversees $17.4 billion. “They’re going to allow the banks to earn their way into a better balance sheet condition.”

Equity index futures pared gains before the market opened after consumer spending unexpectedly stagnated as employment prospects dimmed and rising inflation caused Americans to cut back, a Commerce Department report showed in Washington today.

Purchases rose 0.3 percent in May, the same as in the prior month. Economists had forecast a gain of 0.1 percent, according to the median of 63 estimates compiled by Bloomberg.

“I don’t think these little squiggles on the domestic economy are going to make that much difference,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees more than $9 billion. “The focus will continue to be on two things: sovereign debt and Greece. Until this is resolved, I don’t think anybody can feel comfortable anywhere, including the United States.”

Greek lawmakers will vote on a five-year austerity plan this week that must pass before the European Union and the International Monetary Fund will agree to provide further aid.

Failure to pass the plan may lead to the euro area’s first sovereign default as Greece needs to cover 6.6 billion euros ($9.4 billion) of maturing bonds in August.

The first session of the three-day debate began in Athens today. The lawmakers will probably vote on June 29. They also need to pass an implementation law, which provides the details of how the five-year plan will be applied, before June 30.                         

The KBW Bank Index gained 1.4 percent as 20 of its 24 stocks advanced. U.S. Bancorp added 2.7 percent to $24.57.

Huntington Bancshares rallied 3.6 percent to $6.32.

Bank of America rose 3.1 percent to $10.85. The biggest U.S. lender was “massively undervalued” as the stock traded for less than the cash on its balance sheet is worth, said Richard Bove, an analyst with Rochdale Securities LLC.

“Under the bleakest of scenarios Bank of America’s book value will rise in the next three years,” Bove, who is based in Lutz, Florida, wrote today in a note to clients. “At some point the market will adjust to the company’s real values.”

Technology shares in the S&P 500 rose 1.4 percent, the biggest gain within 10 groups.

Microsoft climbed 3.7 percent to $25.20 before a presentation tomorrow by Chief Executive Officer Steve Ballmer, who is expected to introduce Microsoft’s next-generation cloud service for its Office software. Apple Inc. rose 1.7 percent to $332.04 after Morgan Stanley said the company’s order reductions will ease and production of iPhones and iPads will begin “ramping aggressively” from August through year-end.

Spending on information technology by companies and governments in the U.S. will grow 5.6 percent in 2011, according to a survey by International Data Corp., about double the estimated increase for gross domestic product. Of the executives surveyed by the research firm, 31 percent said spending on security initiatives was a top initiative this year, while 19 percent chose business analytics.

Amazon gained 4.5 percent to $201.25. Morgan Stanley raised its share-price estimate for the company to $245, citing potential for operating margin expansion.

Stanley Black & Decker Inc. added 0.3 percent to $69.50 after agreeing to buy Niscayah AB for 7.6 billion kronor ($1.2 billion), outbidding rival Securitas AB to secure expansion in the market for electronic security systems. Investors will receive 18 kronor a share in cash under the terms of the offer, New Britain, Connecticut-based Stanley said. The price is 47 percent higher than the Niscayah’s closing price prior to the $910 million bid from Securitas. 

Have a wonderful evening everyone.

Be magnificent!

 

 Meditation is one of the greatest arts in life, perhaps the greatest,

and one cannot possibly learn it from anybody else,

that is the beauty of it.

It has no technique and therefore no authority.

When you learn about yourself, watch yourself, watch the way you walk,

how you eat, what you say, the gossip, the hate, the jealousy –

if you are aware of all that in yourself, without any choice,

that is part of meditation.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 The nearest way to glory…

is to strive to be what you

wish to be thought to be

    -Socrates, c. 470-399 BC

Dear Friends,

 Tangents:  I read this article recently and thought it interesting; hope you do too.

 The King’s Visit

   by Peter Grier

During his state visit to Britain May 24-26, President Obama gave Queen Elizabeth II a leather-bound album of mementos from her parents’ trip to the United States in 1939. The queen seemed to like it, and even stuffy British commentators thought the gesture classy. But little news coverage noted that the 1939 royal tour of America—which occurred 72 years ago this week—was a triumph of public relations and one of the most important diplomatic events in the history of US-British relations. If it were made into a movie, “The King’s Visit” could be just as dramatic and moving as “The King’s Speech.”

It would be the same king in both films, of course – King George VI.   The darkening atmosphere would be the same, as the night of World War II was drawing across Europe. But the pivotal character would be Franklin D. Roosevelt instead of speech therapist Lionel Logue.  The prime obstacle to be overcome would be, not a stammer, but Americans’ historical memory of the redcoats.

No reigning British monarch had ever set foot on US soil until King George and his wife, Queen Elizabeth, crossed the border from Canada on June 7, 1939. Many US voters were isolationist and wanted no part of a European war. FDR thought the sight of a real king might change their minds. “I think it would be an excellent thing for Anglo-American relations,” he said in his breezy invitation to “My dear King George.”

The canny FDR was right. Crowds lined D.C. streets for a glimpse of the modest king. Newsreels noted that the last time the British had marched through the streets of Washington, they burned the White House.  This time, they burned only a few hot dogs, the dish President Roosevelt famously served the royal couple during their visit to his home in Hyde Park, N.Y.

Three months later, Britain and Germany were at war. Americans sympathized with Britain’s plight, due in no small part to the royal visit, according to the FDR library’s history of the visit. “Britons were no longer strangers or the evil colonial rulers from the past but familiar friends and relatives with whom Americans could identify,” concludes the history.

First Lady Michelle Obama addressing graduates of Spelman College earlier this month:

That is the story of Spelman College: that unyielding presumption of promise, that presumption of brilliance, that presumption that every woman who enrolls at this school has something infinitely valuable to offer this world….That legacy is now your inheritance.  And I’ve chosen that word – inheritance – very carefully, because it’s not an entitlement  that you can take for granted.  It’s not a gift with which you can do whatever you please.  It is a commitment that comes with a certain set of obligations, obligations that don’t end when you march through that arch today….

I want you to think about women like [Spelman graduates] Marian Wright Edelman and Janet Bragg….Instead of focusing on  what they didn’t have, they focused on what they did have: their intellect, their courage, their determination, their passion.  And with few advantages and long odds, with doors closed to them and laws stacked against them, still they achieved, still they triumphed, still they carved a glorious path for themselves in this world.  And graduates, every single one of you has an obligation to do the same.

Photos of the day 

June 24, 2011

President Barack Obama signs a robot after speaking at Carnegie Mellon University in Pittsburgh.

Carolyn Kaster/AP

A visitor looks at a LEAP turbine during the 49th Paris Air Show at the Le Bourget airport near Paris. LEAP is next-generation engine family for single-aisle jets selected by Airbus to power A320neo. Gonzalo Fuentes/Reuters

Market Commentary:

Canada

By Matt Walcoff

June 24 (Bloomberg) — Canadian stocks fell for a third day, led by energy companies, as gold futures dropped to a five- week low and crude oil failed to rebound from yesterday’s 4.6 percent plunge.

Goldcorp Inc., the world’s second-biggest gold producer by market value, fell 2.8 percent as concern Greece’s debt crisis will spread to other European countries boosted the U.S. dollar.

Nexen Inc., an oil and gas producer with operations on five continents, lost 2 percent a day after the International Energy Agency said it will release of 60 million barrels of crude.

 The Standard & Poor’s/TSX Composite Index slipped 70.69 points, or 0.5 percent, to 12,908.89 at 4 p.m. in Toronto. It gained 0.9 percent this week.

“Two things are going on: The risk trade is starting to come off a bit — when that happens there’s a movement toward safer currencies such as the U.S. dollar — and then the worry that Greece is going to default,” said Tony Demarin, chief investment officer at BCV Asset Management in Winnipeg, Manitoba, which oversees C$300 million ($305 million).

The S&P/TSX broke a three-week losing streak as investors speculated Greece will be able to enact austerity measures and avoid default. European leaders meeting in Brussels today attempted to stanch the crisis, vowing to stave off a Greek default as long as Prime Minister George Papandreou pushes through a package of budget cuts next week.

Base-metals producers climbed this week, while gold companies rebounded from a two-year low relative to prices of the metal. Gold and silver retreated today as the U.S. dollar gained for a third day against a basket of world currencies. The cost to insure against a sovereign-debt default in Europe rose to a record as Moody’s Investors Service said it may cut its ratings on 13 Italian banks.

Goldcorp fell 2.8 percent to C$46.24. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, dropped 3.4 percent to C$31.34. Iamgold Corp., which mines in West Africa, South America and Quebec, lost 4.4 percent to C$17.73, a five-month low.

Crude oil futures have fallen four straight weeks.“The rest of the world seems to believe we need lower oil prices in order for the economy to start growing again,” Demarin said. “Opening up the petroleum reserve is something they don’t do all that often.” Nexen declined 2 percent to C$19.49, extending its three- day drop to 5.6 percent. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, slipped 1.6 percent to C$38.26.

Niko Resources Ltd., which produces energy in South Asia, lost 3.2 percent to C$62.85 after agreeing to plead guilty to a Canadian charge of bribing a Bangladeshi official. The shares closed at the lowest level since May 2009.

Copper futures advanced as much as 2.5 percent in New York after the U.S. reported a bigger increase in durable-goods orders for May than most economists had forecast.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 3.2 percent to C$127.45. Teck Resources Ltd, the country’s biggest base-metals and coal producer, rose 0.9 percent to C$45.95.

BlackBerry maker Research In Motion Ltd. decreased 3.1 percent to C$28.23, trimming its weekly gain to 3.6 percent. Speculation that RIM may be acquired is unwarranted, Kris Thompson, an analyst at National Bank of Canada, said in a note to clients.

 US

By Rita Nazareth and Cecile Vannucci

June 24 (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index lower for a third straight day, as concern about the European debt crisis intensified and Oracle Corp. dragged down technology shares.

Technology companies in the S&P 500 dropped 1.8 percent as a group. Oracle, the largest maker of database software, sank 4.1 percent after reporting lower hardware sales. Micron Technology Inc. tumbled 14 percent as the maker of computer- memory chips reported sales and profit that missed estimates.

Bank of America Corp. and JPMorgan Chase & Co. slumped at least 1.4 percent, following losses in European lenders.

The S&P 500 fell 1.2 percent to 1,268.45 at 4 p.m. in New York, extending its drop in June to 5.7 percent. The Dow Jones Industrial Average declined 115.42 points, or 1 percent, to 11,934.58 today. More than 10.1 billion shares changed hands on U.S. exchanges as of 5 p.m., the highest since March, as investors bought and sold shares to match Russell Investments’ annual changes to its equity indexes. Russell says about $3.9 trillion is benchmarked to its global stock-market measures.

“The market has been in a correction mode for the month of June,” said Timothy Ghriskey, chief investment officer at the Solaris Group LLC in Bedford Hills, New York, which manages $2 billion. “The focus really has been on the European debt crisis, on Greece and on the potential for contagion.”

The S&P 500 has retreated 7 percent from this year’s high at the end of April amid weaker-than-estimated economic data and concern about Europe’s debt crisis. The index is still up 0.9 percent in 2011 on government stimulus measures and better-than- expected earnings.             

 Stocks fell as banks dragged on Europe’s benchmark index after Moody’s Investors Service said it may downgrade 13 Italian lenders because they would be vulnerable to a cut in the government’s credit rating. The euro dropped a third day and bond yields rose in Spain and Italy. Declines in the financial and technology companies overshadowed faster-than-forecast growth in U.S. durable-goods orders and European leaders’ pledge to support Greece if the nation approves austerity measures.

Equity futures rose earlier after the Commerce Department said orders for durable goods, or equipment meant to last at least three years, rose 1.9 percent, beating the median economist forecast of 1.5 percent. Demand for non-military capital equipment also beat expectations after revised April readings showed a smaller decline than previously reported.                     

“We’re getting indications that this is only a temporary soft spot for the economy,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “I do see a better economic picture in the back half of this year.”

A gauge of technology companies in the S&P 500 dropped 1.8 percent as 70 of its 74 stocks retreated. Oracle slumped 4.1 percent to $31.14. Chief Executive Officer Larry Ellison bought Sun Microsystems Inc. last year to capitalize on demand for the servers and databases used in data centers. While the hardware results may reflect Oracle’s effort to pare less-profitable machines from the lineup, they were disappointing enough to overshadow better-than-predicted performance in profit and sales of new software licenses.

Micron Technology tumbled 14 percent to $7.21. The price of dynamic random access memory, or DRAM, for personal computers dropped as supplies increased and demand from makers of consumer laptops and desktop PCs remained sluggish, the Boise, Idaho- based company said. Orders are also slowing for chips used in inexpensive mobile phones, pushing down prices, Micron Chief Executive Officer Steve Appleton said.

The KBW Bank Index of 24 stocks fell 1 percent. Bank of America, the largest U.S. lender by assets, retreated 1.8 percent to $10.52. JPMorgan declined 1.5 percent to $39.49.

The pace of profit growth by U.S. companies will slow as the cost of labor increases and stock investors should be wary of sovereign-debt concerns, according to Citigroup Inc.’s Tobias Levkovich. “The rate of growth is going to diminish meaningfully,” said Levkovich, Citigroup’s New York-based chief U.S. equity strategist, in an interview today on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene. “Margin pressures are driven by labor-cost changes, so as we’re starting to come and bring on some workers back, this is actually starting to chop into margins.”

Levkovich recommended avoiding consumer-discretionary stocks, including retail and media companies, as well as health- care shares as the government considers budget cutbacks. He said investors should be cautious about buying equities until there’s more clarity on the debt situations in Greece and the U.S. 

Have a wonderful weekend everyone.

 Be magnificent!

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

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

and the hills hidden by the clouds.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

It pays to be obvious, especially if you

Have a reputation for subtlety.

       -Isaac Asimov,1920-1992 

 

Dear Friends,

 Tangents: Michael Bloomberg, Mayor of New York City, addressing graduates of The George Washington University in Washington, D.C. earlier this month: 

As you think about your career, whatever you do, don’t worry about mapping it all out.  Just don’t play it safe.  Don’t be the person who quits a start-up company, or a band, before giving it a chance to make it big.  And don’t be afraid to start over or change direction.  The more risks you take, the happier you will be, even if they don’t work out,  And I can assure you, sometimes they won’t.  But I can also assure you this: No matter what job you have, no matter who your employer is, the harder you work, the luckier you will get….My advice is relatively simple: Continue learning.  Continue asking difficult questions.  Continue thinking independently.  Continue volunteering your time to help others.

Photo of the day

June 23, 2011

A motocross rider participates in the ‘Rocket Ride’ race during Erzberg Rodeo near the village of Eisenerz in the Austrian province of Styria. Erzberg Rodeo is one of the biggest Enduro races in the world and takes place from June 23 until June 26, 2011. Lisi Niesner/Reuters

Market Commentary: 

Canada

By Matt Walcoff

June 23 (Bloomberg) — Canadian stocks fell for a second day after European Central Bank President Jean-Claude Trichet said the continent is at a “red” level of risk and the U.S. reported an increase in initial jobless claims.

Nexen Inc., an oil and gas producer with operations on five continents, dropped 2.1 percent as crude futures slumped to a four-month low. Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 1.5 percent as world financial stocks retreated. Barrick Gold Corp., the world’s biggest gold-mining company, declined 1.4 percent as the U.S. dollar rose against 14 of 16 other major currencies.

 The Standard & Poor’s/TSX Composite Index decreased 80.98 points, or 0.6 percent, to 12,979.58. The index had rallied 2.1 percent on June 20 and June 21 on speculation Greece will pass austerity measures to address its debt crisis.

“You get these momentary distractions, like we’ve figured out a solution, then the next day you realize, ‘Oh darn, there isn’t a Santa Claus,’” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.02 million) each for more than 250 families. “We’re piled to the outer solar system in debt, and banks are full of all these bad bonds.”

The stock benchmark fell 7.5 percent this quarter through yesterday as concern that Greece will default on its debts mounted and data on employment and manufacturing in the U.S. indicated a slowdown in the economic recovery. The S&P/TSX hasn’t ended a quarter with a drop of more than 6.2 percent since 2008.

When asked yesterday the level of the European Systemic Risk Board’s planned risk “dashboard,” board chairman Trichet said “red.”

“The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union,” Trichet said after a board meeting in Frankfurt. First-time unemployment claims in the U.S. climbed to 429,000 last week from 420,000 the week before, the Labor Department said today in Washington. None of the 47 economists in a Bloomberg survey had forecast a reading that high.

The Thomson Reuters/Jefferies CRB Commodity Price Index declined to the lowest level since January as 16 of 19 commodities in the index retreated. Crude oil sank 4.6 percent in New York.                   

Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, decreased 2.1 percent to C$18.53. Husky Energy Inc., Canada’s third-largest energy company by revenue, plunged 5.7 percent, the most in two years, to C$26.55 after saying it will sell shares at C$27.05 each.

Every S&P/TSX bank and all but one insurer retreated. TD fell 1.5 percent to C$78.50. Royal Bank of Canada, its larger rival, dropped 1.3 percent to C$53.82. Manulife Financial Corp., North America’s fourth-biggest insurer, declined 1.2 percent to C$16.

The U.S. dollar gained as much as 1.6 percent against the euro after Markit Economics’s composite index of euro-area purchasing managers’ surveys trailed all 16 estimates in a Bloomberg survey.

Gold futures fell the most since May 5, ending a seven-day streak of gains, and silver slumped 4.7 percent. Barrick dropped 1.4 percent to C$42.98. Goldcorp Inc., the world’s second- largest gold producer, slipped 1.3 percent to C$47.59. European Goldfields Ltd., which is developing precious- and base-metal projects, declined 6.4 percent to C$9.24.                   

BlackBerry maker Research In Motion Ltd. increased 5.5 percent to C$29.14. RIM’s smartphones are less likely than competitors’ to develop hardware problems, WDS, a Poole, England-based company that tracks customer-support calls, said in a statement today.

RIM shares remain down 50 percent for the year. Teck Resources Ltd., the country’s biggest base-metals and coal producer, climbed 3.1 percent to C$45.54. The company said it may buy back up to 40 million shares over the next year.

TMX Group Inc., the owner of the Toronto Stock Exchange, advanced for a fifth day, rallying 2.4 percent to a three-year high of C$45.30. Maple Group Acquisition Corp. raised its unsolicited bid for the company to C$50 a share from C$48 a share.

 US

By Rita Nazareth and Cecile Vannucci

June 23 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a second day, as concern grew that Europe’s debt crisis will hurt banks and an increase in jobless claims added to signs the economy is slowing.

JPMorgan Chase & Co. and Wells Fargo & Co. dropped at least 1.2 percent as European Central Bank President Jean-Claude Trichet said the debt crisis threatens to infect banks. Chevron Corp. and Exxon Mobil Corp. slid more than 1.6 percent as oil tumbled. Stocks pared losses on reports that austerity measures proposed by Greece to win a bailout were endorsed by officials from the European Union and the International Monetary Fund.

The S&P 500 declined 0.3 percent to 1,283.50 at 4 p.m. in New York, after earlier falling as much as 1.9 percent. The Dow Jones Industrial Average retreated 59.67 points, or 0.5 percent, to 12,050 today. About 8.3 billion shares changed hands on U.S. exchanges, 17 percent more than the three-month average.

“It’s discouraging,” said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.8 billion. “The Band-Aid being placed isn’t really to bail out Greece. It’s to bail out the banks that hold Greek paper. If you lead people to think that their banks are going to be insolvent, that creates more problems.”

The benchmark gauge of U.S. stocks fell 4.6 percent this month amid concern that Greece will default on its debt and weaker-than-expected economic reports. The S&P 500 was still up 2.1 percent this year amid government stimulus measures and better-than-expected corporate earnings.                        

Global stocks tumbled today as Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

Measures proposed by Greek Finance Minister Evangelos Venizelos to complete a 78 billion-euro ($111 billion) austerity package required to win a bailout were endorsed by officials from the European Union and International Monetary Fund, said a person familiar with the matter.

A “solidarity levy” of between 1 percent and 5 percent would apply to all Greek wage earners, with members of parliament paying the top rate, Venizelos said at a news conference in Athens today. Self-employed Greeks will have to pay a separate charge estimated at around 300 euros a year on average, he said.

“It would be nice to put that European crisis behind us,” said John Carey, a Boston-based money manager at Pioneer Investments, which oversees about $250 billion. “Some market participants may be reassured by the dedication of the European countries to addressing the issues. It may be they patch together some near-term way of addressing it. I’m not terribly hopeful that they can put this to bed any time soon.”

Stocks also fell as applications for jobless benefits increased by 9,000 to 429,000 last week, Labor Department figures showed, exceeding the highest estimate in a Bloomberg News survey of economists. Purchases of new U.S. houses fell in May for the first time in three months, showing the industry is struggling to gain momentum. Sales dropped 2.1 percent to a 319,000 annual pace last month, figures from the Commerce Department showed.                       

“We’re just ending QE2 and the intent of that was to build employment and sustain the economy,” Huntington’s Bateman said. “That hasn’t accomplished half of those objectives.”

The S&P 500 yesterday snapped a four-day rally after the Federal Reserve lowered its forecast for economic growth and said it will end its $600 billion bond-purchase program this month as planned. The second round of so-called quantitative easing, nicknamed “QE2” by investors, helped propel a 23 percent rally in the S&P 500 from when Fed Chairman Ben S.

Bernanke foreshadowed the plan on Aug. 27.

The S&P 500 traded today near its average price of the last 200 days of 1,262.65, a level monitored by analysts who study charts to make forecasts. A decline below the 200-day moving average could herald more losses, according to Schaeffer’s Investment Research.

“This is a key level,” said Ryan Detrick, senior technical strategist at Schaeffer’s in Cincinnati. “With all of the uncertainty and all the things that are out there, it makes it that much more important. Fear is definitely coming back.”

 The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, jumped 4.2 percent to 19.29.

The KBW Bank Index declined 1.1 percent as 21 of its 24 stocks retreated. JPMorgan retreated 1.5 percent to $40.07. Wells Fargo dropped 1.2 percent to $27.04.

Energy producers declined. Oil tumbled, erasing its gains for the year, after the International Energy Agency said its members would release crude from strategic reserves.

Chevron, the second-largest U.S. oil company, dropped 1.7 percent to $99.36. Exxon Mobil retreated 1.7 percent to $78.44.

 The Bloomberg U.S. Airlines Index of 11 stocks rallied 3.7 percent amid expectations for lower costs as oil fell. US Airways Group Inc. gained 5.1 percent to $8.91. AMR Corp. added 5.2 percent to $6.05.

Bed Bath & Beyond Inc. rose 5.3 percent to $56.93. The home furnishings retailer said profit will rise 15 percent to 20 percent in the year ending February 2012, increasing its estimate from a range of 10 percent to 15 percent.

Bristol-Myers Squibb Co. jumped 5.7 percent to $29.33. The pharmaceutical company’s blood thinner apixaban, being developed with Pfizer Inc., prevented more strokes with less major bleeding than traditional treatment in patients with irregular heartbeats in a key study. Pfizer rose 1.8 percent to $20.65.

  Have a wonderful evening everyone.

Be magnificent!

There will have to be rigid and iron discipline

before we achieve anything great and enduring,

and that discipline will not come by mere academic argument

and appeal to reason and logic.

Discipline is learnt in the school of adversity.

 

-Mahatma Gandhi, 1869-1948

As ever,

 Carolann

 Joy is not in things; it is in us.

       -Richard Wagner, 1813-1883 

Dear Friends,

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

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

 

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

 

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

 

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

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

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

Photo of the day

June 22, 2011

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

Market Commentary:

 

Canada

By Matt Walcoff

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

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

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

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

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

US

By Rita Nazareth and Cecile Vannucci

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have a wonderful evening everyone.

Be magnificent!

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

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

-Swami Prajnanpad, 1891-1974

 

As ever,

 Carolann 

“Work and struggle and never accept

an evil that you can change.”

           -André Gide, 1869-1959

 

Dear Friends, 

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

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

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

— James Dent

 
Photos of the Day:

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

 

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

Market Commentary:

 Canada

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

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

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

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

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

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

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

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

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

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

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

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

(Reporting by Claire Sibonney)

US

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Be magnificent!

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

 As Always,

Kyle for Carolann

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

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

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

Photo’s of the day:

 

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

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

Market Commentary:

Canada

By Matt Walcoff 

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

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

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

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

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

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

Crude, Stocks

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

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

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

Juncker Gets Assurance

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

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

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

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

Euro ‘the Catalyst’

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

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

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

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

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

US

By Rita Nazareth

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

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

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

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

Greece Negotiations

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

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

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

Third Straight Gain

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

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

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

Falling Commodities

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

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

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

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

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

Italian-German Spread

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

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

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

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

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

 Be magnificent!

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

 As always, 

 Summer, for Carolann

 

 

 

Dear Friends, 

Tangents:

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

Photos of the day

June 17, 2011

 

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

 

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

Market Commentary:

Canada

By Matt Walcoff

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

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

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

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

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

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

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

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

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

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

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

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

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

 US

By Rita Nazareth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Have a wonderful weekend everyone.  Happy Fathers’ Day!

 Be magnificent!

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

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

and the hills hidden by the clouds.

 -Krishnamurti, 1895-1986

 

As ever,

 Carolann

 I think, therefore

Descartes exists.

   -Saul Steinberg, 1914-1999

 

Dear Friends,

Tangents: 

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

-from Wikipedia:

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

 -from Ulysses:

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

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

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

 Ineluctable modality of the visible.

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

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

Photos of the day 

June 16, 2011

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

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

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

Market Commentary: 

Canada

By Matt Walcoff

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

US

By Rita Nazareth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Have a wonderful evening everyone.

 Be magnificent!

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

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

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

you reduce yourself to a zero.

 -Mahatma Gandhi, 1869-1948

 As ever,

Carolann

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

                             -James Joyce, 1882-1941

                     A Portrait of the Artist as a Young Man     

Dear Friends,

Tangents: 

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

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

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

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

We’re going to win Game 7.

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

 Full moon tonight.

Photos of the day 

June 15, 2011

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

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

Market Commentary:

Canada

By Matt Walcoff

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

US

By Rita Nazareth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Have a wonderful evening everyone.

 Be magnificent!

 When you abandon every desire that rises up within you,

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

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

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

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

when you are indifferent to success and failure,

then you experience inner serenity.

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

just as a tortoise withdraws its limbs,

then you experience inner wisdom.

 -The Bhagavad Gita

 

As ever,

 Carolann

  Life’s under no obligation to give us

what we expect.  We take what we

get and are thankful it’s no worse

than it is.

    -Margaret Mitchell, 1900-1949

          Gone With the Wind 

Dear Friends, 

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

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

Photos of the day

June 14, 2011

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

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

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

 

Market Commentary:

 Canada

By Matt Walcoff

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

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

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

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

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

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

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

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

 US

By Nikolaj Gammeltoft

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have a wonderful evening everyone. 

Be magnificent! 

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

 -Svetasvatara Upanishad

As ever,

 Carolann

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

                         -George Washington, 1732-1799