Financial life in a big town

UBS AG’s U.S. wealth management unit Paine Webber is not a core part of the bank’s operations but will not be sold at present, UBS Chief Executive Oswald Gruebel was quoted saying in the FT.

“We’ve had a lot of inquiries from potential buyers but it wouldn’t make sense to sell at current valuations,” Gruebel said, according to the report in Tuesday’s Financial Times.

Gruebel also told the FT the bank wanted to cut ties with the Swiss government by buying its way out of a “bad bank” deal and aimed to return to health within a year.

The bank previously said it had no plans to buy back toxic assets but could consider such a course of action at some point in future.

UBS bought U.S. brokerage Paine Webber in 2000 for about $10 billion and merged it into UBS Americas, its U.S. wealth management subsidiary, signaling its intention to aggressively expand in the U.S. wealth management segment.

UBS Americas had over $600 billion in assets at the end of 2008, according to the UBS annual report.

However the dual challenges of the financial crisis and a damaging tax fraud probe by the U.S. government, which caused considerable brand damage to UBS, have forced the bank to pare back its U.S. wealth management business.

In April, the world’s second largest wealth manager by client assets cut 2,000 U.S. jobs as part of a restructuring plan to cut 8,700 jobs worldwide. Earlier in September, sources close to the situation told Reuters the bank had cut a further 200 positions at the U.S. arm.

The bank has locked horns with Switzerland’s financial regulator, FINMA, over its aim to leave the bad bank scheme, under which it pays for protection against big losses on toxic assets, the paper said.

With credit markets recently recovering, the bank believes it could take the assets back onto its balance sheet, but conceded it may not be able to do so until late 2010, the newspaper said.

“It is very expensive,” Gruebel said of the bad bank scheme.

Separately UBS said Fiat SpA Chief Executive Sergio Marchionne and Royal Dutch Shell Plc Chief Executive Peter Voser will not stand for re-election to its board next year.

Marchionne had been mentioned as a possible alternative CEO for UBS in the midst of its troubles earlier this year but the bank turned to former Credit Suisse boss Gruebel.

(Additional reporting by Jan Harvey in London and Emma Thomasson in Zurich; Editing by Dan Lalor and David Holmes)

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It has been 31 years since the last trains left Union Station. And 24 years since its $140 million renovation as a hotel, shopping and entertainment spot on Market Street. But today the station is a shell of what it once was.

Banana Republic? Gone. Talbot’s? Gone. Body Shop, Brookstone, Nature Co.? Gone, gone, gone.

The space formerly occupied by Nature Co. is a gift shop called Fat Sassy’s. Nearby, a shop that calls itself a newsstand has one magazine rack near the front door and several shelves of liquor behind the counter.

But don’t write of this downtown landmark just yet.

A large expansion by Marriott, which in December took over the station’s hotel from Hyatt, is about to get under way. Marriott will move the front desk to the atrium near the station’s western end, allowing greater use of the barrel-vaulted Great Hall for

private events. Marriott also will extend its meeting and restaurant space into much of the retail area along the midway.

As a result, Union Station’s shops will be concentrated along the eastern concourse, where the food court is situated beneath the arched train shed, which dates to 1894. Whether this transformation — the station’s most extensive since the 1980s — will revive the place is yet to be seen.

Barbara Geisman, deputy mayor for development, said city officials hope better times are ahead.

"We would certainly like to see as much retail as possible in Union Station," she said. "As the downtown residential and business population grow, we think there’s a market for more mainstream retail there."

Resuscitating shopping at Union Station will require "some big-time marketing," Geisman said.

"A lot of this is that you get a name draw and then that kind of sets the tone for the rest of it," she said. "We think the station presents opportunities for larger retail."

Bass Pro Shops, based in Springfield, Mo., took a look a few years ago but passed on Union Station, Geisman said. She added that shopping habits have changed since the 1980s, when "festival markets" such as Quincy Market in Boston, South Street Seaport in New York and Union Station drew big crowds. All have faded.

"Things have changed a lot since then," Geisman said. "Instead of people going there on a whim because they want to see a neat old building, you now have a lot of people with disposable income who like to shop."

Frances Percich, Union Station’s marketing manager, said "serious" discussions are under way with two retailers, including one that would be new to St. Louis. She declined to name them. Percich said the station will continue to market itself as a tourist attraction with numerous spring and summer events.

"When people walk in here expecting a mall, they will be disappointed," she said. "We’re not a mall. We have no anchor store."

Among the few Union Station visitors one afternoon last week were Russ and Donna Clark of Yuba City, Calif. They were staying at the Marriott for a meeting. The Clarks said they had been unsure whether Union Station’s emptiness resulted from a renovation still under way or from a lack of business.

Told that the renovation was completed in 1985 and that the station had been in decline for years, Donna Clark said: "Wow, that’s a shame. This looks like a great idea. It’s disappointing not to see a lot of people."

Union Station’s current retail occupancy is 79 percent, Percich said. Ownership has changed in recent years. In 2003, the inability of St. Louis Station Associates, the investment group behind the 1980s renovation, to pay the mortgage led to foreclosure by Regency Savings Bank of Oak Park, Ill. Park National Bank of Chicago bought the property from Regency and owns it through Union Station Holdings LLC.

Doug Dean, the Marriott’s general manager, said the hotel renovation will restore some of the inn’s original 1890s configuration. He noted that the original front desk was off the atrium, remarkable for its glass-block floor. All 539 rooms, including the 67 in the station’s original "headhouse," will be redone. Dean declined to specify the overall cost, saying it remained "a moving target."

Four meeting rooms and a restaurant will be built near the new lobby. One floor above, the existing restaurant will be used mainly for private events. Beginning with a ballroom freshening done by November, the renovation project will be completed in late 2011, he said.

Hotel and shopping areas will remain open during the renovation.

Across Market from Union Station is the western end of the Gateway Mall, the milelong park that extends east to the Old Courthouse. Tricia Roland-Hamilton, head of the project to redo the mall, said that to thrive, the Union Station area must have more offices, residents and stores.

"The key to livening up that space, not just Union Station but that part of the mall, is density," she said. "And we don’t have that right now."

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Nasty bear markets tend to stimulate demand for information, and sometimes I wonder how private investors cope with all the noise and clutter of the business media. There is too much information out there. Who with a life can make an investment decision based on retail sales, the leading indicators, housing starts, jobless claims, the Philly Fed and ISM manufacturing indexes?

While we’re at it, why not pile on the inflation-deflation debate, the potential for a U.S.-China trade war and the U.S. Federal Reserve’s latest decision on interest rates?

Now, you need to know if you’re a "value" investor or a "growth" investor because of where we are in the business cycle. If you’re not sure of the difference, here is a clip from a recent item claiming value investing beats out growth.

"As a first step, we formed quartiles by sorting stocks by price/earnings (P/E) ratios and then stocks within each P/E quartile were sorted by price/book value (P/BV). As is typical for this type of study, we defined the low P/E—low P/BV group of stocks as value stocks and the high P/E—high P/BV as growth stocks. …

"To prevent problems from the inclusion of negative or extremely positive P/E- and P/BV-ratio firms, and eliminate likely data errors, we excluded negative P/E and P/BV ratios, as well as P/E ratios in excess of 150 and P/BV over 20."

Moving right along, you could switch to exchange traded funds (ETFs) and dump those expensive actively managed mutual funds.

You could ignore all of the above and adopt a less complex strategy of rebalancing your asset mix once or twice a year. As a last resort, you could fire your full-service adviser and switch to a discount broker to at least lower your trading costs.

Now that I’ve tabled some strategies, I should mention that none of the above works in a bear market.

In a bear market, economic numbers mean nothing. In a bear market, both value and growth investors get slaughtered. In a bear market, ETFs and actively managed mutual funds get slaughtered. And lower costs do little to offset losses.

In a bull market, all strategies work. ETFs go up, managed mutual funds go up, value goes up, growth goes up and our current adviser is well worth those extra fees.

In a nutshell, all we really need to know is the current status of the equity markets no fax cash advances. Are we in a bull or bear market? The rule here is: In a bull market, be an investor, and in a bear market, be a trader.

One of the most reliable tools for confirming the bulls or the bears is to monitor the financial stocks, as that group typically leads the other stock sectors in both cycles.

Technically, the 2007-09 bear became official in November 2007, when the S&P/TSX financials index quietly slipped below the 200-day moving average five months after the price peak on June 2007.

A prudent person, however, does not act on one isolated technical event but rather seeks out more evidence to confirm the possibility of a new bear market.

I have found that wealth management companies – mutual fund companies and investment dealers – tend to lead the broader financial services group, which includes banks and life insurance firms.

If we know the broader S&P/TSX financials index peaked in mid-2007, we need to know if the wealth managers "confirmed" by posting earlier price peaks.

The following confirmed the financial bear: CI Financial Corp. peaked in April 2006; Canaccord Capital Inc. in May 2006; AGF Management Ltd., April 2007; and IGM Financial Inc, May 2007.

Now we have good news, because we know the S&P/TSX financials index rebounded from the March 2009 low to rally above the 200-day moving average in early May.

Once again our wealth-manager test has confirmed the bull market, with many of them posting their last new 52-week low ahead of the broader S&P/TSX financials index.

One example of the strong wealth manager group is shown in our chart this week, which plots the weekly closes of the S&P/TSX financials index above wealth manager Canaccord Capital’s.

I have identified the December 2008 lows of each plot at (A). Note now the respective lower March 2009 lows at (B) for the financial index and the respective higher March lows at (B) for Canaccord.

This tells me the wealth managers are outperforming the broader financial services industry and, until that changes, I remain a bull.

Bill Carrigan, CIM is an independent stock-market analyst. He can be reached at info@gettingtechnical.com.

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Sales of newly built U.S. single-family homes rose to their highest level in nearly a year in August, according to government data on Friday that indicated the housing market was gradually recovering from a three-year slump.

New home sales have risen for five straight months. The Commerce Department said sales rose 0.7 percent to a 429,000 annual pace, the highest since September last year, from a downwardly revised 426,000 in July.

However, the increase was below market expectations for a 440,000 unit rate. July’s sales pace was previously reported at 433,000 units.

Compared to August last year, total new homes sales fell 3.4 percent.

The median home sales price in August fell percent 11.7 percent from a year earlier to $195,200, the lowest since October 2003, the department said. In July, the median home price was $215,600.

The inventory of new homes available for sale at the end of August fell 3.0 percent to 262,000 units, the lowest since November 1992.August’s sales pace left the supply of new homes available for sale at 7.3 months’ worth, the lowest since January 2007.

(Reporting by Lucia Mutikani; Editing by Theodore d’Afflisio)

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The worldwide personal computer market is pulling out of its slump quickly and could defy predictions by growing this year, Intel Corp. CEO Paul Otellini said Tuesday.

Otellini’s comments at a conference on Tuesday were more bullish than many analysts have been. Market research firms IDC and Gartner have both predicted a year-over-year decline in PC shipments in 2009, which would be the first such drop since 2001.

Otellini said he expects PC sales to be "flat to slightly up" this year from last. He said the rebound is being fueled by the fact computers are "indispensable, something that people need in their daily lives."

"I think that the market is poised for a resurgence," he said.

Researchers at Gartner Inc. predict a 2 percent decline in PC shipments for 2009, though that’s better than a few months ago, when the group was forecasting a drop of 6 percent.

"Things are looking much better in the second half," Gartner research director George Shiffler said.

But Shiffler wasn’t quite willing to go as far as Otellini did. He expects second-half shipments to be flat from last year, not strong enough to push the entire year into positive territory.

"It wouldn’t surprise me if we did see positive growth, but that’s not our call at the moment," Shiffler said.

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The U.S. securities regulator warned Congress on Tuesday that parts of the $450 trillion private swaps market could still fall through regulatory cracks under the Obama administration’s financial reform plan.

Securities and Exchange Commission Chairman Mary Schapiro said stricter rules were needed to prevent market participants from shopping for the weakest rules, and said regulators needed more tools to enforce anti-fraud authority.

The administration’s proposal “unfortunately does not currently provide the tools needed to adequately police all these swaps,” Schapiro told the House Agriculture Committee hearing.

Global policymakers agree that the over-the-counter derivatives market should be regulated after a type of derivative, credit default swaps, led to insurer American International Group’s near collapse and $180 billion government bailout.

However, Congress has lost some of its momentum. Agriculture Chairman Collin Peterson said on Tuesday: “I would hope there would be some way we get this wrapped up by the end of this year.”

Senator Jack Reed introduced a bill on Tuesday to regulate the derivatives market. But Senate Banking Chairman Christopher Dodd said “nothing has been written yet.”

The administration proposal would split responsibility between the SEC and the Commodity Futures Trading Commission.

The SEC would oversee derivatives based on individual securities and the CFTC would regulate derivatives that draw their value from a broader index of securities.

Schapiro said traders could exploit differences in regulation between swaps and the equity and futures markets and swaps needed to be regulated like their underlying assets.

“Congress should extend the federal securities laws to all securities-related OTC derivatives and extend the Commodity Exchange Act to all commodity-related and non-securities related OTC derivatives,” said Schapiro.

Under the administration plan, “standardized” contracts would be required to be cleared and be traded on exchanges or via a “swap execution facility.” Customized contracts would face higher margin and capital requirements.

She urged lawmakers to close the unregulated foreign bank loophole for “identified banking products.”

Last week, processors, distributors and other “end users” said they often pledge assets, but not cash, in swaps deals. It would be a costly burden, they said, to post a cash reserve, the normal procedure at clearinghouses.

CFTC Chairman Gary Gensler tried to assuage concerns that reforms would hamper the ability of commercial users to hedge their price risks.

“We can bring this market on to exchanges and clearing, while allowing energy companies to actively use these risk management contracts,” said Gensler. One approach would be for end users to develop credit arrangements with members of clearinghouses, he said. 

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Lennar Corp, the No. 3 U.S. homebuilder, reported a larger quarterly loss on Monday, as it wrote down the value of land and other assets to deal with the recession, but it pointed out signs of real estate market recovery.

Lennar said its net loss widened to $171.6 million, or 97 cents per share, in the third quarter ended August 31 from $89 million, or 56 cents per share, a year earlier.

Analysts were expecting a net loss of 51 cents per share, according to Reuters Estimates.

Revenue dropped to $720.7 million from $1.1 billion as deliveries of homes tumbled 29 percent to 2,691 homes.

The company said its loss included 42 cents per share in charges related to valuation adjustments and other write-offs and 34 cents per share in tax-related charges.

The sector has been gaining steam in recent weeks, following several brokerage upgrades, as Wall Street becomes increasingly confident that the worst of the housing slump has passed.

As evidence of the recovery, Lennar’s cancellation rate fell to 19 percent from 27 percent in the same quarter a year ago, and the value of its backlog rose 19 percent from the previous quarter to $647 million allstate insurance company.

New orders in the third quarter slipped 8 percent from the same period a year ago, the smallest percentage year-to-year decline since November 2006, Lennar said.

“Our new orders increased sequentially each month during the quarter and we ended the quarter with our highest backlog since August 2008,” Chief Executive Officer Stuart Miller said in a statement.

“In order to capitalize on the improvement in our sales pace, we increased our home starts during the quarter, which will lead to higher deliveries in the fourth quarter,” he added.

Lennar trails Pulte Homes Inc, which became the nation’s largest homebuilder following its August acquisition of Centex, and D.R. Horton Inc.

Its stock has soared from a low of $3.42 in November last year to a year-high of $17.66 last Thursday.

(Reporting by Christopher Kaufman, with additional reporting by Scott Malone; Editing by Lisa Von Ahn and Gerald E. McCormick)

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Parents have gotten a lot smarter in 2009.

Well, at least they’ve gotten smarter when it comes to telling their children about money, saving and investing. In the past, they rarely told them much of anything constructive about those topics.

Financial experts say the financial crisis has provided a unique teaching opportunity that many parents have seized upon. Adults want their kids better prepared to avoid the mistakes they’ve made.

"For a long time, the answer to a youngster’s question, ‘Can I get this?’ was, ‘No, we don’t have enough money’ or ‘Yes, we have enough money’," said Evelyn Zohlen, president of Inspired Financial LLC, Huntington Beach, Calif. "Now parents, as a result of the recession and economy of the past 12 months, are using this as an opportunity to expand their answers."
For example, parents are explaining that they don’t want to charge more on a credit card because they consider it important to pay off their credit card bill every month, Zohlen said. She considers this a "subtle refining" of the prior common response, providing a lesson on how the overall financial process works.

"It is ironic to me that adults have been forced to relearn financial lessons themselves," she said. "They’re sharing those lessons with their children now."

The tried-and-true approach of giving an allowance for chores done around the house remains valid, said Zohlen. It’s an easy learning opportunity to tell the child how much he’ll receive each week. The next step is planning what to do with money earned, such as how much will be saved or whether the child would want to donate a portion to an animal shelter or some other cause, she said.

Savings goes into a cash equivalent such as a money-market fund or bank account, she said, but when the child gets a bit older you must begin the conversation about investing.

Ask the youngster to name his favorite companies, with Walt Disney Co., McDonald’s Corp. or Coca-Cola Co. the typical types of responses you’ll hear, she said. Next, find some mutual funds for the child that own those shares, she said.

"Parents don’t have to teach their kids about modern portfolio theory, but they can begin to talk about what a mutual fund is and explain that it owns lots of different companies," Zohlen said.

Just don’t drop the weight of the entire global meltdown on your child’s small shoulders.

"It’s a terrific time to be talking to kids about saving and investing, given what’s gone on in the market," said Christine Benz, director of personal finance for Morningstar Inc. in Chicago. "But it’s a fine line, because if you’re nervous or worried, you want to be careful about communicating those feelings, since you really don’t want to scare your child payday loans online."

A common mistake is not stressing to children the importance of starting to save and invest early in life so that it becomes a lifelong habit, Benz said. Studies show the dramatic difference a few years’ head start can make as far as the amount accumulated later in life.

"The bottom line is that you want to get kids interested in investing early because it can absolutely change their lives," asserted Charles Carlson, editor of the DRIP Investor newsletter.

An all-too-common parental error Carlson has observed is applying the parents’ time horizon and risk parameters to their kids, saying "stocks are bad" or some other investment directive that doesn’t take into account the child’s far longer time horizon.

"You can start with a company-specific approach, telling the child that it is possible to buy shares in the company that makes the jeans bought for him that day," suggested Carlson. "Or if he likes a video game, you can explain it is possible to buy shares of GameStop Corp., the store where the game was purchased."

Educate the child about savings but also get him interested in the process of investing, said Carlson. Both are easier if the child has some sort of connection with the company being discussed.

For youngsters Carlson prefers dividend reinvestment plans offered by companies, most with minimum initial investments of $250 or less, that make it easy for the parent or grandparent to make an initial investment. Then the youngster can kick in small amounts of money to build the investment gradually.

"To me, a mutual fund is a harder sell for kids," believes Carlson. "But if they like baseball you can talk to them about stock in Nike Inc., or if they’re into computers, you can talk about Microsoft Corp."

Weigh the possibilities, but whatever type of investment is chosen, it is important to get started.

"If you have a child who’s showing some interest in investing and the stock market, there’s probably nothing like investing in individual stocks to teach the child how to navigate that environment," said Benz. "But if the goal is to teach savings and the importance of investing, a mutual fund is the way to go."

Benz recommends these funds with $1,000 minimum initial investments as excellent launching pads for young people: Oakmark Equity and Income Fund; Ariel Fund; Artisan International Fund; and Vanguard STAR Fund.

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LOS ANGELES — Ticketmaster Entertainment Inc. has developed a new way to resell tickets that shuts out the brokers and scalpers it has long scorned, and instead keeps the profits for itself, performers and venue owners.

The system relies on Ticketmaster’s "paperless" ticketing platform, which makes customers prove their purchase by showing a credit card and ID when they arrive at an event. Without paper tickets, there’s nothing for scalpers to resell.

With its new exchange system, Ticketmaster has come up with a way to let buyers resell a paperless ticket, while still cutting out ticket-resale leader StubHub and other brokers. That gives Ticketmaster a chance to capture more of the so-called secondary market, which generates greater fees and profits per ticket.

The resale system debuted this month at Penn State’s college football season opener and is likely headed for other collegiate stadiums.

The system involved 21,000 season tickets that are reserved for full-time Penn State students. The tickets are highly prized because they come at a big discount and Nittany Lions games usually sell out the 108,000 seat stadium.

The system required both the buyer and seller to use their student IDs, so resellers had to use Ticketmaster’s online trading system to transfer or trade. The buyer couldn’t then resell the paperless ticket.

Penn State, in an effort to ensure that the resold tickets would remain affordable, capped the resale price per ticket to $60, about twice the original face value and fees.

Just 965 students chose to resell their tickets for the season opener against Akron on Sept. 5, and the average resale price was just $39.61, said associate athletic director Greg Myford.

"The students seem to be grateful for that," Myford said. "They can get a ticket and they don’t have to worry about really being gouged. We’ve largely eliminated those only interested in scalping from the process."

For Ticketmaster, the new system brought in additional revenue.

For the initial sales run, fees amounted to a little more than $4 per ticket, but on resales the buyer was required to pay $1.95 and a 15 percent transaction fee — up to $10.95 a pop. In the home opener, the total resale fee averaged $7.89 and was shared between Ticketmaster and the university.

Artists or venue owners will determine whether an event with paperless ticketing makes use of the new exchange system, said Dave Scarborough, Ticketmaster’s executive vice president of technology. He said the fees Ticketmaster will collect on the resales are needed to "recoup our investment in the technology."

Paperless tickets still account for fewer than 1 percent of all ticket sales, said analyst Brett Harriss of Gabelli & Co. But that could be changing. Prominent musicians, such as Miley Cyrus and even former Ticketmaster critics Bruce Springsteen and Nine Inch Nails’ Trent Reznor, have taken up Ticketmaster’s paperless tickets. Nine Inch Nails’ website called the move "an effort to keep tickets in the hands of the fans and out of the hands of brokers/scalpers."

But StubHub, a subsidiary of eBay Inc., said the setup limited options for fans.

"We don’t think fans are excited about the lack of choice and the lack of options outside of the Ticketmaster wall," said StubHub spokesman Andy Pray. "It limits the choices for fans if they want to resell or pass them along the chain."

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The Toronto stock market snapped a five-session winning streak Thursday, pulled lower by a sharp drop in base metal and gold stocks.

"We have some profit taking," said Fred Ketchen, manager of equity trading at Scotia Capital. "This market is in a state where it needs to be relaxed for a bit."

The S&P/TSX composite index lost 27.37 points to 11,528.23 near the end of a strong trading week in which optimism about economic recovery had sent the main TSX index running ahead to its highest close in almost a year on Wednesday.

"I think it is probably justified, I think there is growing enthusiasm because there's growing confidence," added Ketchen.

The TSX base metals sector fell 3.98 per cent as the December copper contract declined 4.05 cents to $2.896 a pound. Teck Resources (TSX: TCK.B) lost 61 cents to $29.39 and 1st Quantum Minerals lost $6.10 to $64.25.

The gold sector was also a major decliner, down 2.25 per cent as December gold on the New York Mercantile Exchange gave back $6.70 to $1013.50 (U.S.) an ounce. Goldcorp Inc. (TSX: G) lost 54 cents to $44.97.

The TSX Venture Exchange declined 11.8 points to 1,272.74.

Stock markets in Canada and the United States are up smartly this week after Federal Reserve chairman Ben Bernanke said that the U.S. recession was likely over and a report on Wednesday showed industrial activity surged 0.8 per cent in August, better than the 0.6 per cent increase economists had forecast.

The Canadian dollar closed 0.17 of a cent lower to 93.74 cents U.S. after a report showing that consumer prices in Canada declined in August for the third consecutive month and other data indicating a Canadian economic recovery is on the way.

Statistics Canada reported that the annual rate of inflation was negative 0.8 per cent last month, as the relatively low cost of gasoline and energy continued to drag the consumer price index down.

That compared with the July reading of minus 0.9 per cent, which was Canada's lowest inflation rate in 56 years.

The agency also said that its composite leading index, designed to indicate where the economy is headed in the next six to 12 months, rose 1.1 per cent in August, the biggest jump since April 2002.

The agency said jumps of one per cent or more in the index usually come early in a recovery that follows a downturn.

The TSX energy sector was down 0.4 per cent with the October crude contract on the Nymex down four cents at $72.47 (U.S.) a barrel. Crude oil had surged about $4 a barrel over the last three sessions amid signs the U guaranteed fast personal loans.S. economy, the world's largest consumer of crude, has stopped shrinking. In turn, the rise has sent the TSX energy sector up well over three per cent this week.

New York markets were little changed amid some earnings disappointments and positive economic data.

The Dow Jones industrial average was down 7.79 points to 9,783.92.

The Nasdaq composite index fell 6.4 points to 2,126.75 while the S&P 500 index was off 3.27 points to 1,065.49 as the U.S. Commerce Department said that construction of new homes and apartments rose 1.5 per cent to an annual rate of 598,000 units last month, slightly lower than the 600,000-unit pace that economists had forecast. But it was still the highest level in nine months.

There was also an indication that job cuts are slowing as the U.S. Labour Department said that the number of newly laid-off workers seeking unemployment benefits fell last week to the lowest level since early July.

Earnings news wasn't quite so positive as FedEx said its first-quarter earnings fell 53 per cent to $181 million and warned its profit will remain weak through the end of the year.

Revenue fell 20 per cent to about $8 billion and its shares lost $1.74 to $76.46.

The TSX financial sector was the best performing sector, up 0.45 per cent. Manulife Financial Corp. (TSX: MFC) shares rose 50 cents to $22.15 (Canadian) as it said it is buying fund manager Markland Street Asset Management Inc. Manulife said the deal allows it to expand its presence in the retail structured products area. Markland had assets under management of approximately $114 million at the end of August.

Sun Life Financial Inc. (TSX: SLF) shares ticked 31 cents higher to $31.62 after the life insurer reassured investors on Thursday that it won't slash dividend payments in the near future. During the second quarter, Manulife cut its quarterly dividend in half despite a 76 per cent surge in profits during the second quarter.

Elsewhere in the resource sectors, shares in Opti Canada Ltd. (TSX: OPC) were unchanged at $2.25 on heavy volume of 20.7 million shares after going as high as $2.57, in a second volatile day of trading.

Copper Mountain Mining Corp. (TSX: CUM) shares jumped after the company called an unsolicited takeover offer from Taseko Mines Ltd. (TSX: TKO) "untimely" and said it undervalues the company's growth potential and jeopardizes its current plans. Copper Mountain shares jumped 24 cents or 17 per cent to $1.65 while Taseko Mines added one cent to $2.93.

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