Bloomberg News

Canadian Financial, Energy Shares Drop on Economic Concerns

October 25, 2011

Oct. 25 (Bloomberg) -- Canadian stocks fell for the first time in three days, led by financial and energy shares, as U.S. home prices and consumer confidence declined and investors awaited a summit of European leaders tomorrow.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, dropped 2 percent as energy shares fell. Toronto-Dominion Bank, the country’s second- largest lender by assets, lost 1.7 percent after the S&P/Case- Shiller index of U.S. home prices declined more than forecast. Barrick Gold Corp., the world’s biggest gold producer, gained 3.4 percent as the metal climbed for a third day.

The Standard & Poor’s/TSX Composite Index dropped 52.53 points, or 0.4 percent, to 12,109.75.

“Uncertainty is still with us until we get better news, and we may not even get certainty tomorrow,” Tony Demarin, the chief investment officer at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$300 million ($295 million). “Gold is an asset class that protects you against the uncertainty of what’s going to happen there.”

The S&P/TSX rallied 2.8 percent to a one-month high in the previous two days as investors speculated European leaders will reach a deal to prevent the continent’s sovereign debt crisis from weakening banks and the broader economy. The index is heading for its first monthly gain since February.

Another Summit

The EU finance ministers’ meeting scheduled for tomorrow was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled, EU President Herman Van Rompuy said.

The S&P/Case-Shiller index of U.S. home prices declined 3.8 percent in August from last year, S&P said today. Economists had forecast a retreat of 3.5 percent, according to the median estimate in a Bloomberg survey.

The U.S. Conference Board reported that its gauge of consumer confidence fell to the lowest level since March 2009. The index trailed all 76 forecasts in a Bloomberg survey of economists.

Canadian Natural lost 2 percent to C$33.84. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, decreased 2.6 percent to C$35.46. TransCanada Corp., the owner of Canada’s biggest pipeline system, fell 1.1 percent to C$43.46.

Banks Fall

The six largest S&P/TSX banks dropped. TD lost 1.7 percent to C$73.68. Royal Bank of Canada, its bigger domestic rival, slipped 0.8 percent to C$47.70. Mortgage insurer Genworth MI Canada Inc. decreased 3 percent to C$20.73.

Precious metals gained as economic concerns spurred demand for an investment haven.

Barrick advanced 3.4 percent to C$48.05. Goldcorp Inc., the world’s second-largest producer of the metal by market value, increased 3.8 percent to C$48.02. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, climbed 3.7 percent to C$32.56.

Futuremed Healthcare Products Corp. jumped a record 31 percent to C$8.12 after Cardinal Health Inc. agreed to buy the company for C$8.15 a share in cash. Shares of Concord, Ontario- based Futuremed had plunged 25 percent from July 11 to yesterday and closed at a record-low C$5.60 Oct. 6.

--Editors: Stephen Kleege, Jeff Sutherland

To contact the reporters on this story: Matt Walcoff in Toronto at; Kaitlyn Kiernan in New York at

To contact the editor responsible for this story: Nick Baker at

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