Bloomberg News

Canadian Stocks Decline as EU Puts Off Second Greek Aid Program

January 31, 2012

Jan. 30 (Bloomberg) -- Canadian stocks fell, led by producers of raw materials, after German Chancellor Angela Merkel said European leaders won’t complete a second aid program for Greece at a summit today.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, lost 5.6 percent as copper dropped the most in three weeks. Semafo Inc., which mines gold in West Africa, plunged 12 percent after saying production may decline this year. Ruggedcom Inc., which makes communications equipment used in industry, soared 25 percent after agreeing to be bought by Siemens AG.

The S&P/TSX Composite Index decreased 30.08 points, or 0.2 percent, to 12,436.42 in Toronto.

“We’ve gotten a pretty robust move out of the blocks,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees about C$250 million ($250 million). “It’s understandable the market may take a pause, especially in the face of continuing concern about Europe regarding the Greece settlement.”

The S&P/TSX gained each of the previous six weeks, the longest streak since April 2009, as improving U.S. manufacturing and employment data and the U.S. Federal Reserve’s plan to keep interest rates at historical lows until at least late 2014 overshadowed the European debt crisis.

Today’s summit won’t complete the Greek aid program because talks with banks over debt reduction aren’t completed, Merkel told reporters before the summit in Brussels today. Greek finance minister Evangelos Venizelos yesterday rejected the idea of European intervention in the country’s budget policy, citing “national dignity.”

Spending Unchanged

U.S. personal spending was unchanged in December, the Commerce Department said today in Washington. Most economists in a Bloomberg survey had forecast an increase.

The S&P/TSX Materials Index retreated from the highest close since Dec. 1 as the U.S. Dollar Index climbed the most since Jan. 13.

First Quantum lost 5.6 percent to C$21.74. Goldcorp Inc., the world’s second-largest gold producer by market value, slipped 0.9 percent to C$48.78. Ivanhoe Mines Ltd., Rio Tinto Group’s majority-owned partner in Mongolia’s Oyu Tolgoi copper project, decreased 4.5 percent to C$16.29.

Semafo sank 12 percent to C$7.04 after forecasting 2012 production of 235,000 to 260,000 ounces. The company, based in Montreal, produced 250,100 ounces of gold last year. Josh Wolfson, an analyst at Stifel Financial Corp., cut his rating on the shares to “hold” from “buy.”

Banks, Insurers

Financial companies in the S&P/TSX dropped for a fifth day, the longest streak since July. Bank of Nova Scotia, the country’s third-largest lender by assets, declined 0.7 percent to C$51.96. Bank of Montreal lost 0.6 percent to C$58.18, while Manulife Financial Corp., North America’s fourth-largest insurer, decreased 0.5 percent to C$11.81. Great-West Lifeco Inc., Canada’s second-biggest insurance company, lost 1.1 percent to C$21.72.

Ruggedcom jumped 25 percent to a record C$32.85 after Siemens agreed to buy the Concord, Ontario-based company for C$33 a share. Belden Inc., based in St. Louis, had made an unsolicited offer of C$22 a share last month.

Mood Media Corp., the owner of Muzak Holdings LLC, rallied 21 percent, the most since September 2009, to C$2.85. The company estimated fourth-quarter earnings before interest, taxes, depreciation and amortization of $34 million, beating the average analyst forecast of $32.1 million, according to a Bloomberg survey. It was Mood Media’s first gain since Jan. 12.

--Editors: Stephen Kleege, Joanna Ossinger

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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