Bloomberg News

Canadian Stocks Decline After U.S. Retail Sales Trail Forecasts

February 14, 2012

Feb. 14 (Bloomberg) -- Canadian stocks fell for the third time in four days, led by raw-materials companies, after U.S. retail sales increased less than forecast and European officials said Greece must do more to cut its debt.

Barrick Gold Corp., the world’s largest gold producer, dropped 0.7 percent as the U.S. Dollar Index rose. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 4.7 percent after saying its Horizon oil-sands upgrader may be out of service until mid- or late March.

The S&P/TSX Composite Index slipped 44.22 points, or 0.4 percent, to 12,354.47, the lowest close since Jan. 18.

“The problems south of the border are still not resolved,” David Cockfield, a managing director at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “A lot of people are still waiting on what’s going on in Europe. The earnings season hasn’t been a spectacular one. We’re starting to lose ground here.”

The index gained 5.4 percent in the two months ending yesterday as data from the U.S. signaled an improving economy. The U.S. accounted for 74 percent of Canada’s exports last year, Statistics Canada said last week.

Smaller Increase

U.S. retail sales climbed 0.4 percent in January, the Commerce Department said today in Washington. Economists had forecast a gain of 0.8 percent, according to the median estimate in a Bloomberg survey.

Stocks extended their retreat after Luxembourg Prime Minister Jean-Claude Juncker, chairman of the group of euro- region finance ministers, said he “did not yet receive the required political assurances from the leaders of the Greek coalition parties” on budget cuts.

Gold futures fell for a third day on the Comex in New York as the euro dropped against the U.S. dollar. Barrick decreased 0.7 percent to C$47.64. Silver Wheaton Corp., Canada’s third- biggest precious-metals company by market value, declined 1.3 percent to C$35.16 as silver retreated. Eldorado Gold Corp., the country’s fifth-largest company in the industry by market value, slipped 2.1 percent to C$13.02 to extend its streak of losses to eight days, the longest since June.

African Discovery

Volta Resources Inc., which explores for gold in Africa, soared 35 percent, the most since December 2009, to C$1.51 after reporting a discovery.

Base-metals and coal producers in the S&P/TSX fell to the lowest since Jan. 9 as copper futures dropped for a third day on the Comex in New York.

Teck Resources Ltd., Canada’s largest company in the industry, lost 0.8 percent to C$38.97. Inmet Mining Corp., a copper and zinc producer, decreased 3.1 percent to C$63.75. Lundin Mining Corp., which operates in Europe, slumped 4.5 percent to C$4.86.

Canadian Natural decreased 4.7 percent to C$36.36 after cutting its 2012 production forecast for the Horizon upgrader, which processes oil sands into refinery-ready crude. The company shut the plant on Feb. 5 for maintenance, expecting to complete the work by the end of the month. More damage was found to a unit at the plant than was originally thought, Calgary-based Canadian Natural said today.

Analyst Upgrade

Cenovus Energy Inc., Canada’s fifth-biggest energy company, gained 2.3 percent to C$38.60 after Menno Hulshof, an analyst at Toronto-Dominion Bank, raised his rating on the shares to buy from hold. In a note to clients, Hulshof said he based his upgrade in part of the progress of the Christina Lake joint venture with ConocoPhillips.

TransCanada Corp., the owner of the country’s largest pipeline system, advanced 1.6 percent to C$42.15 as natural gas rallied 4.2 percent on the New York Mercantile Exchange on forecasts for colder weather in the western U.S.

Bankers Petroleum Ltd., which operates in Albania, slumped 5.6 percent to C$4.70 after plunging 5.9 percent yesterday, when the company reported a decline in production for January and increased its development-cost estimates. At least six analysts cut their 12-month share-price forecasts today.

Labor Unrest

Calvalley Petroleum Inc., which operates in Yemen, tumbled 19 percent, the most since October 2008, to C$1.30 after saying it will shut down its Block 9 production due to the strike at Petromasila, the state-run operator of the Masila oil field. “Certain groups within the region have organized blockades on major roads within the Masila basin,” hampering oil transportation, Calvalley said in a press release.

Imax Corp., the maker of giant-screen movie projection systems, rallied 11 percent to C$24.45 after saying box-office revenue this year through Feb. 12 increased about 45 percent from a year earlier.

Trimel Pharmaceuticals Corp. surged 36 percent to C$3.41 after closing at the highest yesterday since becoming publicly traded through a reverse takeover in July. The company said today its Tefina female sexual dysfunction medicine was successful in a study.

--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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