Bloomberg News

Canadian Stocks Fall on Worse-Than-Expected Jobs Report

April 09, 2012

Canadian stocks fell to their lowest level of the year, led by energy and financial companies, after U.S. employers added fewer jobs than forecast in March.

Manulife Financial Corp., North America’s third-largest insurer, retreated 3.1 percent. Encana Corp. (ECA), the country’s largest natural gas producer, lost 1.3 percent. Avion Gold Corp. (AVR), which explores for the metal in Mali, surged 9.3 percent after the military junta that seized power in the West African country last month agreed to step down.

The Standard & Poor’s/TSX Composite Index (SPTSX) declined 84.61 points, or 0.7 percent, to 12,018.50 in Toronto.

“It’s a bit of a knee-jerk reaction to the Friday news in the face of very thin markets,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview. Michael’s firm oversees C$1 billion ($1 billion). “A good deal of the negativity in the market is a function of the fact that U.S. employment numbers disappointed people.”

The benchmark equity gauge rose 3.7 percent in the first quarter this year as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. The Canadian index had its biggest weekly drop of the year last week. The market was closed on April 6 for the Good Friday holiday. The index fell 2 percent in March, after two straight months of increases.

Pace of Growth

Financial stocks in the S&P/TSX fell for a fourth straight day after U.S. employers added 85,000 fewer jobs in March than economists projected, the biggest shortfall since the report released on July 8, according to data compiled by Bloomberg. The Labor Department’s April 6 statement spurred concern about the pace of American growth.

Royal Bank of Canada (RY) dropped 0.7 percent to C$56.55. Manulife Financial decreased 3.1 percent to C$12.73. Sun Life Financial Inc. (SLF), Canada’s third-biggest insurance company, fell 3.3 percent to C$22.77. Sun Life got 45 percent of its revenue from the U.S. in 2011, according to Bloomberg data.

Canadian energy companies decreased as oil fell for the third time in four days after Iran agreed to resume talks on its nuclear program and economic reports from the U.S. and China raised concern about fuel demand.

Cenovus Energy Inc. (CVE), Canada’s fifth-largest energy company, declined 1.2 percent to C$33.92. Penn West Petroleum Ltd., a western Canadian oil and gas producer, dropped 2.1 percent to C$17.62. Encana Corp. lost 1.3 percent to C$18.47.

Avion Gold surged 9.3 percent to 94 Canadian cents. The company produced 26,256 ounces of gold from its Tabakoto/Segala operations in Mali in the first three months of 2012, a quarterly record, according to a statement today.

The Economic Community of West African States lifted sanctions against Mali yesterday after the military junta that seized power in the country last month agreed to hand over power to a civilian government that will hold elections.

Harry Winston Diamond Corp. (HW), a diamond-mining company and jewelry retailer, increased 1.4 percent to C$13.93 after being raised to hold from sell at Desjardins Securities.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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


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