By: Rita Nazareth
Bloomberg.com

Oct. 28 (Bloomberg) — U.S. stocks fell, extending a global slump, as an unexpected decrease in new-home sales added to concern the seven-month rally in equities outpaced prospects for economic growth. The dollar rose against most major currencies and Treasuries gained, while oil and metals fell.

Alcoa Inc., General Electric Co. and Caterpillar Inc. dropped at least 2.5 percent to lead declines in the Dow Jones Industrial Average. Lennar Corp. and D.R. Horton Inc. tumbled more than 5 percent after the Commerce Department said sales of new homes fell 3.6 percent in September. European and Asian shares slid as companies from SAP AG to ArcelorMittal and Canon Inc. reported disappointing earnings.

The Standard & Poor’s 500 Index retreated 1.1 percent to 1,051.61 at 1:37 p.m. in New York. The Dow slipped 48.14 points, or 0.5 percent, to 9,834.03. The MSCI World Index of 23 developed nations lost 1.6 percent.

“The stock market is due for a correction,” said Hank Smith, who helps oversee $5.5 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “Even though the economy has bottomed out, we’re still getting some disappointing numbers now and then. On the earnings front, a good deal of growth came in from cost cutting. Investors are using all that as an excuse to pull back.”

The S&P 500 has rallied 56 percent from a 12-year low on March 9 amid growing confidence a U.S. economic recovery will drive profit growth. The benchmark for U.S. equities has slipped 3.5 percent from this year’s high on Oct. 19 on speculation the seven-month rally has outpaced the prospects for earnings and economic growth.

Financial Post
Published: Tuesday, July 07, 2009

OTTAWA - Consumer bankruptcies jumped more than 34% in May from a year earlier as household finances continued to take the brunt of the economic downturn.

There were 9,900 personal bankruptcies filed during the month, up 34.4% from 7,364 in May 2008, the federal Office of the Superintendent of Bankruptcy reported Tuesday.

On a monthly basis, consumer insolvencies were down 9.5% from 10,578 in April.

There were 464 business bankruptcies in May, down 16.2% from 554 a year earlier, and down 12.3% from 529 in April.

Total bankruptcies were up 30.9% to 10,364 in May from 7,918 a year earlier. On a monthly basis, however, insolvencies were down 9.6% from 11,465 in April.

Here is some interesting news - more Americans are warming to the idea of buying a home. The University of Michigan reports that its index of home-buying attitude (a component of its consumer sentiment survey) jumped in May to the highest level in five years. This development is strongly suggestive of a tangible increase in home sales in the coming months (the University estimates that its index generally leads sales by about six months). What is driving the renewed interest? Compelling pricing, even for first-time buyers.

The income required to buy a first home at the current mortgage rate has dropped below median family income for the first time in recent U.S. history. This unprecedented affordability keeps us confident in our forecast that the glut of homes on the market will start to melt rapidly enough to stabilize prices later this year. This may prove to be one of the turning points out of this recession.

Mounir R. El-Ayari, CIM, FCSI, C.h. P. Strategic Wealth
Investment Advisor
Associate Portfolio Manager
e-mail: mounir.el-ayari@nbf.ca

The decline in home prices in 20 major U.S. cities slowed in February for the first time since 2007, amplifying signals that the market may be stabilizing. The S&P/Case-Shiller index’s 18.6 percent decrease compares with a record 19 percent decline the month before. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.