Bloomberg News

Canadian Stocks Gain for Week as Energy Shares Rally on Economy

February 24, 2012

Feb. 24 (Bloomberg) -- Canadian stocks fell, paring a second weekly gain, as declines by gold companies offset a rally in energy shares after U.S. consumer sentiment and home sales reports bolstered confidence in the global economy.

Goldcorp Inc., the world’s second-biggest producer of the metal, fell 1.4 percent as demand for a haven eased and gold declined. Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.6 percent as crude rose for a seventh day. Magna International Inc., North America’s largest auto-parts supplier, rallied 5.4 percent after it said fourth-quarter earnings jumped 42 percent.

The S&P/TSX Composite Index slipped 5.51 points, or less than 0.1 percent, to 12,725.77 in Toronto, paring its weekly rally to 2.2 percent.

“Previously there was a concern about a double dip” in the economy, Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “We’ve had good earnings, a lot of good guidance, and we’ve had some economic numbers over the last several months that are showing that seems like it’s no longer the case.”

Canadian materials and energy companies advanced earlier this week as commodities gained after euro-area finance ministers approved 130 billion euros ($175 billion) in aid for Greece. The index has advanced eight of the past nine weeks as improving economic data from the U.S. overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

Financial Stocks

Financial shares gained as purchases of new homes in the U.S. exceeded economists’ forecasts in January and a gauge of consumer confidence topped estimates. Finance ministers and central bank governors from the Group of 20 nations meet tomorrow in Mexico and may discuss committing fresh cash to the International Monetary Fund to defuse the European fiscal crisis.

Toronto-Dominion Bank, Canada’s second-largest lender, gained 0.4 percent to C$79.30. Brookfield Asset Management Inc., the country’s largest real-estate company, gained 1.6 percent to C$31.51.

The S&P/TSX Gold Index fell for the first time this week the metal retreated after its three-day rally. Goldcorp fell 1.4 percent to C$48.64.

“The price of gold has really been a steady riser, and we just haven’t seen much of that carry through in the valuations of gold shares,” Radman said.

Iamgold Corp., which mines in West Africa, South America and Quebec, fell 9.1 percent to C$15.90 after reporting fourth- quarter earnings that missed analysts’ estimates.

Iran Concerns

Oil climbed for a seventh day, the longest streak of advances since January 2010, as sanctions against Iran made it more difficult for the Persian Gulf nation to sell crude.

Suncor Energy, the country’s largest oil and gas producer, increased 1.6 percent to C$36.97.

Nexen Inc. rose 1.5 percent to C$21.18. The oil and gas producer with operations on five continents said it has begun producing oil from its Usan field off the coast of West Africa.

Enerplus Corp., an oil and gas producer with operations in Canada and the U.S., lost 2.4 percent to C$24.01 after it reported a fourth-quarter loss.

Laramide Resources Ltd., a Canadian uranium-mining company, rose 18 percent to C$1.14 on speculation an election next month in Australia’s Queensland state will lead to the end of a ban on extracting the mineral.

Magna International rallied 5.4 percent to C$47.36 after it said fourth-quarter earnings jumped 42 percent on increased production of cars and light trucks in North America.

--Editors: Stephen Kleege, Joanna Ossinger

To contact the reporters on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net; Andrew Theen in New York at atheen@bloomberg.net

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


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