March 30th, 2011 Newsletter

Dear Friends,

March 30, 1921, Virginia Woolf  wrote in her diary while at Zennor:

This is the last evening, and Leonard is packing, and I’m not in the mood for writing, but feel superstitiously that I should like to read something actually  written in Cornwall.  By looking  over my left shoulder I see gorse yellow against the Atlantic blue.  And we’ve been lying on the Gurnard’s Head, on  beds of samphire among grey rocks with buttons of yellow lichen on them.  You look down onto the semi-transparent water – the waves all scrambled into white round the rocks – gulls swaying on bits of seaweed – rocks now dry now drenched with white waterfalls pouring down crevices. We took a rabbit path round the cliff, and I find myself a little shakier than I used to be.  Still however maintaining without force to my conscience that this is the loveliest place in the world.

photos of the day

March 30, 2011

A model arrives for the Christie’s Green Auction: Bid To Save The Earth event in New York March 29, 2011.

Lucas Jackson/Reuters

Britain’s Prince Harry (l.) tries out an immersion suit, during training for the Walking with the Wounded expedition, on the island of Spitsbergen, situated between the Norwegian mainland and the North Pole. The third in line to the British throne will train for three days before accompanying the team on the first five days of their four-week expedition.

David Cheskin/AP

Market Closes for March 30^th, 2011

Market Commentary:

Canada

By Matt Walcoff

March 30 (Bloomberg) — Canadian stocks rose for a second day as gains in Canadian home prices and U.S. employment spurred bank shares and gold and natural gas producers advanced.

Toronto-Dominion Bank, Canada’s second-largest lender by assets, advanced 1.8 percent after a report by Teranet Inc. and National Bank of Canada showed a 0.4 percent increase in home prices in January. Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, surged 12 percent after making an unsolicited takeover bid for Cephalon Inc. Base metals producer Lundin Mining Corp. rose 4.9 percent after breaking off a deal to be bought by Inmet Mining Corp.

The Standard & Poor’s/TSX Composite Index climbed 153.23 points, or 1.1 percent, to 14,083.58.

“It’s a reduction in concerns about the slowdown in the world economy,” said Robert McWhirter, who oversees C$140 million ($144 million) as a money manager at Selective Asset Management Inc. in Toronto. “Now it appears people are becoming more comfortable moving toward the risk-on strategy.”

The index fell 1.5 percent this month through yesterday, jeopardizing an eight-month streak of gains. Energy companies retreated from a peak they’d reached at the outbreak of the Libyan conflict and insurers and uranium producers dropped after the Japanese earthquake and tsunami.

The S&P/TSX Financials Index climbed to the highest level since May 2008. ADP Employer Services said U.S. companies hired 201,000 workers in March.

TD, which has more than 1,000 U.S. branches, advanced 1.8 percent to a record C$86.40. National Bank, the country’s sixth- largest lender by assets, rose 2 percent to a record C$78.81 after Chief Executive Officer Louis Vachon told an annual meeting that the company is considering a stock split. Manulife Financial Corp., North America’s fourth-biggest insurer, gained 1.7 percent to C$17.19.

Valeant offered about $5.7 billion in cash for Cephalon, a Frazer, Pennsylvania-based maker of sleep and pain drugs, saying Cephalon had rebuffed its attempts to negotiate a friendly takeover.

The purchase of Cephalon could increase Valeant’s share price by $20, Louise Chen, an analyst at Collins Stewart LLC, said in a note to clients.

Valeant soared 12 percent to a seven-year high of C$48.58.

The shares have jumped 72 percent this year, the most among S&P/TSX stocks.

Gold futures advanced for the first time in five days on demand for alternative investments after Muammar Qaddafi’s forces retook the oil port of Ras Lanuf from rebels.

Barrick Gold Corp., the world’s biggest gold producer, increased 1.4 percent to C$50.08. Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 1.6 percent to C$48.09. China Gold International Resources Corp., which mines in China, rallied 3.6 percent to C$5.47 before the release of its fourth-quarter financial results.

Energy companies rose on the Libyan fighting and a forecast of below-normal temperatures in the U.S. that led to a gain in natural gas futures.

TransCanada Corp., the owner of the country’s largest pipeline system, advanced 1 percent to C$39.18. Cenovus Energy Inc., the country’s No. 5 energy company by revenue, increased 1.9 percent to C$38.21.

Bankers Petroleum Ltd., which produces oil and gas in Albania, climbed for the first time in seven days, rising 3.7 percent to C$8.12. Jamie Somerville, an analyst at TD, boosted his rating on the shares to “action list buy” from “buy.”

Lundin rallied 4.9 percent to the highest price since 2008, C$7.96, after terminating the agreement with Inmet so it could try to fight off a rival bid from Equinox Mineral Ltd. Lundin adopted a so-called poison pill that would make it more difficult for Equinox to succeed in its hostile offer.

Equinox, which mines copper in Africa, rose for a sixth day, advancing 2.7 percent to C$5.63. Inmet, which produces base and precious metals, surged 6.7 percent to C$66.62.

Westport Innovations Inc., which makes natural-gas engines, jumped 12 percent, the most in nine months, to C$21.10. U.S.

President Barack Obama promoted natural-gas-fueled vehicles in a speech at Georgetown University in Washington today.

Neo Material Technologies Inc., which makes rare-earth and zirconium products, rallied 7.5 percent to a record C$9.30 after increasing 4.6 percent yesterday. The Metal-Pages website said yesterday that rare-earth processors in China have had to stop production due to a supply shortage.

US

By Cecile Vannucci

March 30 (Bloomberg) — U.S. stocks rose, extending the biggest first-quarter rally in 13 years for the Standard & Poor’s 500 Index, as a report showing companies added more workers in March bolstered optimism about the economy.

Cephalon Inc. surged 28 percent for the biggest jump in the S&P 500 after Valeant Pharmaceuticals International Inc. offered to buy the maker of sleep and pain drugs. Visa Inc. climbed 2.8 percent on speculation that curbs on debit-card fees will be delayed or modified. AT&T Inc. rallied as its chief executive officer pitched the company’s acquisition of T-Mobile USA as a way to boost network capacity and improve service.

The S&P 500 gained 0.7 percent to 1,328.26 at 4 p.m. in New York and is up 5.6 percent for the first quarter, which ends tomorrow. The Dow Jones Industrial Average increased 71.60 points, or 0.6 percent, to 12,350.61 and has rallied 6.7 percent so far this year. The Russell 2000 Index of smaller stocks rose

1.3 percent to 840.28, the highest level since October 2007.

“Given the beginning of a strong cyclical recovery in the U.S. and a tougher environment in many of these other international markets, it seems to us like a good place for investors to be,” said Connor Browne, who oversees about $5 billion as co-manager of the Thornburg Value Fund at Thornburg Investment Management Inc. in Santa Fe, New Mexico. “We’re positively inclined toward valuations and fundamentals for the U.S. market.”

The S&P 500 is poised to complete a third straight quarterly advance and is headed for its biggest gain in the January-March period since 1998, when the index surged 14 percent. The benchmark gauge of U.S. stocks is trading for about

13.7 times its companies’ estimated operating earnings, compared with an average multiple of 18.1 times reported profits over the last decade, data compiled by Bloomberg show.

A report from ADP Employer Services today showed companies hired 201,000 workers in March, marking the third time in four months that the nation added more than 200,000 jobs. A Labor Department report on April 1 may show total U.S. non-farm payrolls rose 190,000 in March and the unemployment rate held at 8.9 percent, economists predicted. The jobless rate fell below 9 percent in February for the first time in 22 months.

“There’s certainly some positive expectations for the jobs numbers this Friday,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “The expectation is that the U.S. economy is going to remain strong and the equity markets are going to continue higher,” he said.

Cephalon advanced 28 percent to $75.44 after Valeant, Canada’s biggest drug maker, offered to buy the Frazer, Pennsylvania-based company for $73 a share in cash. The offer is valued at about $5.7 billion. Valeant rose 13 percent to $50.08.

Forest Laboratories Inc., another drugmaker, climbed 4.3 percent to $32.48.

Visa, the world’s biggest payments network, gained 2.8 percent to $74.23 after Federal Reserve Chairman Ben S. Bernanke said yesterday the central bank wouldn’t meet an April 21 deadline to come up with a final rule on debit-card transaction fees. The cap, mandated by the Dodd-Frank law that overhauled the financial industry last year, must be in place by July 21.

MasterCard Inc., the world’s second-biggest payments network, rose 0.8 percent to $253.66. AT&T Inc. advanced 2.2 percent, the biggest increase in the Dow, to $30.71. CEO Randall Stephenson today said the acquisition of Deutsche Telekom AG’s T-Mobile USA would boost network capacity and improve service for devices such as Apple Inc.’s iPhone. The executive spoke at an event at the Council on Foreign Relations in New York. Apple fell 0.7 percent to $348.63.

PPG Industries Inc. gained 5.9 percent to $95.93, its highest price since at least 1980. The world’s second-biggest paint maker forecast first-quarter profit of at least $1.30 a share, beating the average analyst estimate of $1.12.

Salesforce.com rose 5.6 percent to $134.49 after the largest supplier of customer-management software agreed to buy Radian6 Technologies Inc. for about $340 million in cash and stock to add software that lets companies keep abreast of the social Web.

BlackRock surged 6.6 percent to $198.84. The company will replace Genzyme Corp. in the S&P 500 after the close of trading on April 1, S&P said in a statement. Separately, Citigroup Inc. added the shares to its “top picks” list. Genzyme, which is being removed from the index because France’s Sanofi-Aventis SA is buying the company, dropped less than 0.1 percent to $76.01.

Coca-Cola Co. climbed 0.5 percent to $66.04 as the company said its bottled-water plants in Japan are operating 24 hours a day to meet increased demand because of concern that radiation discharges from the country’s stricken nuclear power plant have contaminated tap water.

Lennar Corp. slumped 4.2 percent to $18.27 for the biggest decline in the S&P 500. Stephen East at Ticonderoga Securities LLC cut the homebuilder to “neutral” from “buy.”

Nvidia Corp. slid 3.8 percent, the second-biggest drop in the S&P 500, to $18.45. ThinkEquity LLC analyst Krishna Shankar lowered his price target for the maker of three-dimensional graphics processors to $18 from $24.

Ameron International Corp. lost 6.6 percent to $69.82 after the maker of fiberglass pipes posted a $4.3 million loss in its fiscal first quarter ended Feb. 27 as poor weather hurt sales.

The S&P 500 usually climbs further following first-quarter gains similar to this year’s, according to Birinyi Associates Inc. The index rises about 7.1 percent in the final three quarters of years following January-March gains of 5 percent to 7 percent, Birinyi data dating back to 1928 show.

The U.S. stock market is about to begin one of the most- bullish months of the year, according to a March 28 note by Bespoke Investment Group, a Harrison, New York-based research company. The Dow has averaged an April gain of 4.2 percent over the past five years, the note said. April has been the best performing month for the past 50 years, it also said.

“People remain very bullish,” said Wedbush Securities’ James. “It’s been one of the strongest first quarters we’ve had” in more than 10 years. “People want to make sure that they show enough long positions in their portfolios going into the end of the quarter tomorrow.”

Have a wonderful evening everyone. Be magnificent!

A mind that is burdened with the past is a sorrowful mind.

-Krishnamurti, 1895-1986

As ever,

Carolann

Every action of our lives touches on some chord that will vibrate in eternity.

-Sean O’Casey, 1880-1964