Bloomberg News

Canadian Stocks Rise as U.S. Gas Supplies, Jobless Claims Drop

February 17, 2012

Feb. 16 (Bloomberg) -- Canadian stocks rose for a second day, led by gold and energy producers, after U.S. employment and housing reports beat estimates and natural gas inventories in Canada’s biggest trade market declined more than forecast.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, gained 1.8 percent. Goldcorp Inc., the world’s second-biggest gold producer by value, advanced 4.4 percent after topping analysts’ average earnings estimate. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by value, increased 2 percent after the U.S. reported higher corn exports.

The S&P/TSX Composite Index climbed 123.56 points, or 1 percent, the most in three weeks, to 12,485.59.

“There’s positive news out of the U.S.,” said Luciano Orengo, who oversees C$1.6 billion ($1.6 billion) as a money manager at Manulife Financial Corp. in Toronto. “Those are the two things that have been weighing the heaviest in the U.S.: the housing picture and the employment picture.”

The S&P/TSX fell 0.7 percent this month through yesterday after rallying 4.2 percent in January. Gold stocks led the decline as the U.S. dollar advanced on concern Greece’s efforts to reduce its budget deficit won’t avert a default. Seven of the world’s 20 largest gold companies by revenue are Canadian, according to Bloomberg data.

Americans filed 348,000 first-time unemployment claims last week, the Labor Department said today in Washington. None of the 45 economists in a Bloomberg survey had estimated a total that low. New-home construction advanced 1.5 percent to an annual rate of 699,000 in January, the Commerce Department said. That beat the median economist estimate of 675,000.

Gas Inventories

Energy stocks gained with natural gas futures after the U.S. Energy Department said inventories dropped more than 21 of 24 analysts in a Bloomberg survey had forecast.

Canadian Natural increased 1.8 percent to C$37.07. Encana Corp., the country’s biggest natural gas producer, climbed 4.3 percent to C$20.15. Nexen Inc., an oil and gas producer with operations on five continents, rose 4.1 percent to C$19.71 after reporting fourth-quarter earnings that surpassed the average analyst estimate in a Bloomberg survey by 55 percent, excluding certain items.

The S&P/TSX Materials Index gained for the first time in 10 days, ending the longest streak of losses since June 2001.

Beating Estimates

Goldcorp Inc., the world’s second-largest gold producer by market value, increased 4.4 percent to C$47.25 after beating the average fourth-quarter earnings estimate of analysts in a Bloomberg survey by 9.8 percent, excluding certain items.

Kinross Gold Corp., Canada’s third-biggest gold producer by market value, advanced 7 percent, the most since May 2010, to C$11.07 after Tony Lesiak, an analyst at Macquarie Group Ltd., raised his rating on the shares to outperform from neutral. An outperform rating means the analyst forecasts the company will return at least 5 percentage points more than its benchmark over 12 months.

Agnico-Eagle Mines Ltd., which produces gold in Canada, Mexico and Finland, surged 7.2 percent to C$36.57. The shares sank as much as 7.7 percent earlier, after Agnico-Eagle took a $644.9 million writedown on its Meadowbank project and posted a quarterly loss.

Closing Positions

Investors who had sold borrowed shares of the company to make a profit on a decline probably took advantage of the tumble to close their positions, John Stephenson, a money manager at First Asset Investment Management Inc. in Toronto, said in an e- mail message. The firm oversees $2.7 billion.

Dundee Precious Metals Inc., which operates in Bulgaria, Armenia and Namibia, jumped 6.9 percent to C$9.95 a day before it is to release fourth-quarter financial results.

Potash Corp. climbed 2 percent to C$45.73 as corn futures rebounded on the Chicago Board of Trade after settling at the lowest since Jan. 24 yesterday. U.S. exporters sold more corn last week than in any week since October, the Agriculture Department said today in Washington.

The S&P/TSX Financials Index rose to a three-week high after the U.S. released its economic data. Manulife Financial Corp., North America’s third-largest insurer, gained 4.6 percent to C$12.59. Bank of Nova Scotia, Canada’s third-biggest lender by assets, advanced 1.4 percent to C$53.62.

Topped Estimates

Finning International Inc., the world’s biggest Caterpillar dealer, rallied 5.2 percent to C$28.15 after its fourth-quarter earnings surpassed the average analyst estimate by 19 percent, excluding certain items.

Stantec Inc., an engineering and architecture services company, surged 5 percent to C$30.75, the highest close since December 2009, after initiating a quarterly dividend. The company will pay 15 Canadian cents a share, with the first payment on April 17.

Parex Resources Inc., an oil and gas producer with operations in Colombia and Trinidad, plunged 15 percent to C$7.15 after releasing production results that Darren B. Engels and Martin P. Molyneaux, analysts at FirstEnergy Capital Corp., called “disappointing.” At least three firms, including FirstEnergy, cut their ratings on the shares. The tumble was the biggest since the company began trading in November 2009.

--With assistance from Liezel Hill in Toronto. Editors: Joanna Ossinger, Stephen Kleege

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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