Bloomberg News

Canadian Stocks Advance as Economic Data Signal Growth in U.S.

December 30, 2011

Dec. 29 (Bloomberg) -- Canadian stocks rose, trimming the year’s decline, as gold stocks gained after the U.S. Dollar Index erased the day’s gains and financial and energy companies advanced on data indicating a strengthening U.S. economy.

Barrick Gold Corp., the world’s largest gold producer, rallied 1.8 percent after the Financial Times said European Parliament members proposed a “road map” to the issuance of common euro-region bonds. Royal Bank of Canada, the country’s biggest lender by assets, increased 1.2 percent as an index of U.S. business activity fell less than economists forecast. Suncor Energy Inc., Canada’s largest oil and gas producer, climbed 2 percent as crude futures rose.

The Standard & Poor’s/TSX Composite Index gained 113.29 points, or 1 percent, to 11,841.70.

“Data has been relatively good when you compare to what people’s expectation was and what’s going on in Europe,” Sadiq Adatia, chief investment officer at Sun Life Global Investments in Toronto, said in a telephone interview. The unit of Sun Life Financial Inc. oversees about C$3.3 billion ($3.2 billion) for clients. “The U.S. seems to be a better story. Canada’s biggest trading partner is the U.S. If the U.S. does start to get some traction, that should benefit Canada.”

The S&P/TSX has tumbled 12 percent this year, led by energy and raw-materials producers, as the European debt crisis led to reductions in global economic-growth forecasts. The groups make up 47 percent of Canadian stocks by market value.

Euro Bonds

The S&P/TSX Gold Index rebounded after closing at the lowest since July 2010 yesterday. The U.S. dollar fell and precious-metals shares gained after the Financial Times said members of the main European Parliament parties have proposed allowing so-called euro bonds as part of a new European Union treaty. The London-based newspaper cited a draft of the proposal and an interview with Guy Verhofstadt, the leader of the parliament’s Liberal group.

Barrick rose 1.8 percent to C$46.07. Goldcorp Inc., the world’s second-biggest company in the industry by market value, advanced 2 percent to C$44.42. B2Gold Corp., which mines in Nicaragua, surged 8.8 percent to C$3.08.

The S&P/TSX Financials Index gained after the Institute for Supply Management-Chicago Inc. said its business barometer retreated to 62.5 from 62.6 in November. Economists had forecast a reading of 61, according to the median estimate in a Bloomberg survey. Readings above 50 signal growth.

Home Sales

U.S. pending home sales increased 7.3 percent in November, nearly five times as much as the median economist forecast in a Bloomberg survey, the National Association of Realtors said today in Washington.

Royal Bank advanced 1.2 percent to C$51.47. Toronto- Dominion Bank, its largest domestic rival, climbed 0.7 percent to C$75.25. Manulife Financial Corp., North America’s fourth- largest insurer, rose 2.2 percent to C$10.68.

Energy stocks gained with oil after the release of the U.S. economic data. Suncor advanced 2 percent to C$29.12. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, increased 1.7 percent to C$37.48. Oil- sands developer MEG Energy Corp. rallied 3.1 percent to C$41.08.

Ivanhoe Energy Inc., which produces oil in China and Ecuador, jumped 16 percent to C$1.19. Shares of the Vancouver- based company have surged 57 percent since falling to a post- March 2009 low on Dec. 19, the first day after its removal from the S&P/TSX took effect. Robert Friedland, a co-founder of the company, said Dec. 14 that he resigned as chief executive officer.

--Editors: Jeff Sutherland, Nick Baker

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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