March 9, 2012 Newsletter

Dear Friends,

Tangents:

Green therapy

Gardens can promote healing, says Scientific American.  “Scientists around the world are now digging into the data to find out which features of gardens account for the effect.”

• Lush, layered landscapes with shade trees, flowers and shrubs at various heights should take up roughly 70 per cent of the space.

• Abstract sculptures do not soothe people who are sick or worried.

• Gardens that can be seen, touched, smelled and listened to soothe best.  But avoid strongly fragrant flowers or other odours for patients undergoing chemotherapy.

• Fountains that sound like dripping faucets do not soothe anyone.

-Globe & Mail

photos of the day

March 9, 2012

The northern lights, or aurora borealis, fill the western sky above the Russian Orthodox Saint Nicholas Memorial Chapel in Kenai, Alaska. The display of lights came in the aftermath of a solar storm that struck Earth on Thursday.

M. Scott Moon/Peninsula Clarion/AP

People walk through the Casa Enzo Ferrari museum during a media preview in Modena, northern Italy. The museum honors the life and work of Enzo Ferrari, the founder of the Italian sports car manufacturer, and will officially open on Saturday.

Alessandro Bianchi/Reuters

Market Closures for March 9, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Matt Walcoff

March 9 (Bloomberg) — Canadian stocks rose, trimming a weekly loss, as energy and financial shares advanced after the U.S. reported a bigger gain in payrolls than most economists in a Bloomberg survey had forecast.

Nexen Inc., an oil and gas producer with operations on five continents, climbed 2.1 percent as crude oil headed for a weekly increase. Viterra Inc., Canada’s biggest grain handler, jumped 25 percent after saying it “received expressions of interest from third parties.” Neo Material Technologies Inc., which makes rare-earths and zirconium products, soared 37 percent after agreeing to be bought by Molycorp Inc.

The S&P/TSX Composite Index gained 37.57 points, or 0.3 percent, to 12,499.50 at 2:15 p.m. Toronto time, reducing its weekly drop to 1.1 percent.

“The U.S. economy is clearly improving — not stellar growth, but improving,” Jeff Bradacs, a money manager on a Manulife Financial Corp. team that oversees about C$1.5 billion ($1.5 billion), said in a telephone interview. “The stronger job number in the U.S. is important because it’s driving demand for commodities and oil, and that’s important for the Canadian stock market.”

The S&P/TSX is set to retreat for a second-straight week for the first time since Dec. 16. Raw-materials and energy stocks have slipped as the U.S. dollar rose on concern about sovereign debt and a potential economic slowdown in Europe, amid speculation the U.S. Federal Reserve won’t begin a third round of asset purchases. Resources companies account for 47 percent of Canadian stocks by market value, according to Bloomberg data.

U.S. nonfarm employers added 227,000 jobs in February, the Labor Department said today in Washington. Economists had forecast an increase of 210,000 positions, according to the median estimate in a Bloomberg survey.

Energy companies in the S&P/TSX gained as crude advanced for a third day on the New York Mercantile Exchange. Nexen increased 2.1 percent to C$19.94. Penn West Petroleum Ltd., a western Canadian oil and gas producer, rose 1.6 percent to C$20.78.

Oil-sands developer Athabasca Oil Sands Corp. climbed 4.2 percent to C$12.12 after R. Jason Konzuk, an analyst at Dundee Securities, assigned it a buy rating in new coverage.

“Athabasca has demonstrated the ability to compress project timelines through the execution of joint ventures, and we believe has the necessary financial capacity and technical capability to allow it to concurrently advance its project portfolio,” Konzuk wrote in a note to clients.

The S&P/TSX Financials Index advanced after the release of the U.S. economic data. Manulife, North America’s third-largest insurer, gained 1.6 percent to C$12.19. Sun Life Financial Inc., Canada’s third-biggest insurance company, climbed 1.2 percent to C$21.10. Bank of Montreal, the country’s fourth-largest lender by assets, increased 0.6 percent to C$57.88.

Base-metals and coal producers rose as copper gained for a third day on the Comex in New York. Teck Resources Ltd., Canada’s largest company in the industry, advanced 1 percent to C$36.56. First Quantum Minerals Ltd., the country’s second- largest publicly traded copper producer, increased 2.3 percent to C$21.02.

Copper and zinc producer HudBay Minerals Inc. rallied 5.6 percent to C$12.32. Shane Nagle, an analyst at National Bank of Canada, raised his rating on the shares to outperform from sector perform two days after it reported fourth-quarter earnings that beat the average analyst estimate in a Bloomberg survey by 40 percent, excluding certain items. An outperform rating means the stock will gain more than other companies the analyst monitors.

Viterra surged 25 percent to C$13.72 after rallying as much as 28 percent, the most intraday in nine years. The Canadian government’s plan to end the Canadian Wheat Board monopoly may encourage a takeover bid for the Regina, Saskatchewan-based company, Jason Zandberg, an analyst at PI Financial Corp. in Vancouver, said in a telephone interview.

Due to Viterra’s jump, the S&P/TSX Consumer Staples Index climbed the most intraday since January 2009, wiping out its decline for the year.

Neo Material Technologies jumped 37 percent to a record C$10.95 after Greenwood Village, Colorado-based mining company Molycorp agreed to buy the company for about C$1.3 billion ($1.3 billion) in cash and shares. Neo owners will receive C$8.05 in cash and 0.122 of a Molycorp share for each Neo share. Molycorp rose 16 percent in New York.

Rare Element Resources Ltd., which is developing a rare- earths project in Wyoming, surged 18 percent to C$5.95. Quest Rare Minerals Ltd., which explores in eastern Canada, soared 18 percent to C$2.93.

Uranium producer Denison Mines Ltd. plunged 11 percent to C$1.55 after reporting a fourth-quarter loss of 9 cents a share, excluding certain items. Analysts had forecast a loss of 3 cents a share, according to the average estimate in a Bloomberg survey. The shares tumbled as much as 14 percent, the most intraday in 11 months.

US

By Rita Nazareth

March 9 (Bloomberg) — U.S. stocks rose, capping the fourth straight weekly rally for the Standard & Poor’s 500 Index, after a government report showing stronger-than-forecast payroll growth bolstered optimism in the world’s largest economy.

Financial shares had the biggest gain among 10 groups in the S&P 500 as Greece’s private creditors agreed to a debt swap.

JPMorgan Chase & Co. and BB&T Corp. added at least 1.2 percent.

Lennar Corp. and D.R. Horton Inc. rallied more than 3 percent, pacing gains in homebuilders, after Credit Suisse Group AG raised its recommendations for the companies. Starbucks Corp. rose 2.9 percent on plans to introduce a new single-cup brewer.

The S&P 500 added 0.4 percent to 1,370.87 at 4 p.m. New York time. The index rose 2.1 percent in four weeks. The Dow Jones Industrial Average gained 14.08 points, or 0.1 percent, to 12,922.02. The Russell 2000 Index of small companies jumped 1.3 percent to 817. About 6.2 billion shares changed hands on U.S. exchanges, or 6.4 percent below the three-month average.

“The jobs report was solid, but not spectacular,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages $663 billion. “This helps depict the U.S. as the standout Western economy continuing to slowly, but steadily repair. We didn’t see any improvement in the unemployment rate. That tells me the Fed is going to stay accommodative. The path of least resistance for stocks is up.”

Today is the three-year anniversary of the bull market in U.S. stocks that followed the global financial crisis. The S&P 500 has rallied 103 percent from its 12-year low on March 9, 2009, on better-than-estimated economic and corporate data. The index is up 9 percent in 2012.

Equities rose today amid the best six-month streak of job growth since 2006. The 227,000 increase in payrolls last month topped the median projection of economists in a Bloomberg News survey. The jobless rate held at 8.3 percent. The latest pickup in employment may not be convincing enough for Federal Reserve Chairman Ben S. Bernanke, who last week said the labor market remains “far from normal,” a sign policy makers continue to see merit in keeping interest rates low for several years.

Investors also watched developments in Europe’s attempts to tame its debt crisis. Greece pushed through the biggest sovereign restructuring in history, opening the way for a second rescue package. An industry group ruled that Greece’s debt restructuring is a “credit event” that will trigger $3 billion in default insurance.

“This is a story of isolating Greece and preventing a massive financial contagion,” said Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp., which has $1.74 trillion in client assets.

Nine of 10 groups in the S&P 500 gained today, led by financial shares. The KBW Bank Index rallied 1 percent as 23 of its 24 stocks advanced. JPMorgan advanced 1.5 percent, the most in the Dow, to $41.03. BB&T increased 1.2 percent to $29.46.

A measure of homebuilders in S&P indexes rallied 3.3 percent. Lennar increased 3.1 percent to $25.45, while D.R.

Horton climbed 6.3 percent to $15.47. The shares were raised to the equivalent of buy at Credit Suisse.

Starbucks rose 2.9 percent to $51.84. The Verismo machine will make espresso-based beverages and brewed coffee. Starbucks will advertise and sell the machine and single-cup pods through a strategic relationship with closely held Krueger GmbH. Green Mountain Coffee Roasters Inc. tumbled 16 percent to $52.59.

Sprint Nextel Corp. surged 6.9 percent to $2.78. The request by regulators for Verizon Wireless and cable operators led by Comcast Corp. to provide more data on the companies’ proposed $3.6 billion airwaves deal appears to be “a partial victory” for smaller wireless operators such as Sprint, Stifel Nicolaus & Co. said in a note.

Molycorp Inc. soared 19 percent to $30.89. After losing two-thirds of its value in 10 months as demand for rare-earth metals imploded, it’s now seeking to boost shareholder returns with its biggest takeover.

The owner of the largest rare-earth deposit outside China yesterday agreed to buy Neo Material Technologies Inc. for C$1.3 billion ($1.3 billion) in cash and stock. With Neo Material, Molycorp will gain the ability to produce more types of magnets and increase sales to China, boosting profitability, Byron Capital Markets Ltd. said.

“It actually makes it a stronger story,” Jonathan Hykawy, a Toronto-based analyst at Byron Capital, said in a telephone interview. “Molycorp effectively has the pieces of the puzzle if this acquisition goes through to basically do the entire magnet industry. That’s a big, big, added slice of added cash flow that Molycorp really isn’t paying all that much for.”

Ten stocks in the Dow retreated today. Hewlett-Packard Co., the world’s biggest personal-computer maker, slumped 1.9 percent to $24.18. The shares had the biggest decline in the 30-stock index, after rallying for two straight days.

Texas Instruments Inc. lost 1 percent to $32.27. The largest maker of analog semiconductors reduced its first-quarter sales and profit forecasts, citing lower demand for products that let wireless devices connect and run applications.

Pall Corp. fell 3.1 percent, the most in the S&P 500, to $59.30. The supplier of filters for drugmakers and refineries was cut to neutral by Wedbush Securities, citing softness in markets including China.

Dynegy Inc. slumped 36 percent, the most in the Russell 2000 Index, to 76 cents. The independent power producer’s transfer of coal-fired power plants from a unit it later put into bankruptcy was fraudulent and harmed creditors, a court- ordered investigation found.

Have a wonderful weekend everyone.

Be magnificent!

The only way to achieve consciousness is by concentrating on the physical, the mental, and the spiritual.

Concentration on the powers of the spirit to discover unity in diversity is called consciousness.

All that draws on unity is moral; all that draws on diversity is immoral.

Swami Vivekananda, 1863-1902

As ever,

Carolann

Say yes to life even though you know

it may devour you.

-Stephen Larsen, 1970-2009

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7