Bloomberg News

Canadian Stocks Rebound From Six-Day Skid on U.S. Jobs

May 10, 2012

Canadian stocks rebounded from a six- day skid, led by banks and energy producers, as Greece attempted to form a new government and the U.S. reported a decline in jobless claims.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, climbed 0.8 percent. Canadian Natural Resources Ltd. (CNQ), the country’s third-biggest energy company, increased 1.5 percent. Royal Bank of Canada (RY), the nation’s biggest lender, rose 1.1 percent. Teck Resources Ltd. (TCK/B), the country’s biggest base-metals producer, rose 0.5 percent as copper prices increased.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 61.16 points, or 0.5 percent, to 11,736.17 in Toronto.

“You’ve had six straight days of negativity and the market was bound to bounce back,” Irwin Michael, a portfolio manager at ABC Funds in Toronto, said in a telephone interview. Michael’s firm oversees C$1 billion ($1 billion). “It’s a bit of a relief rally. Investors are taking a pause and looking ahead.”

The benchmark gauge declined 5.3 percent during the six-day slump and is heading for a second straight weekly decline. Last week it fell as a U.S. report showed employers added fewer jobs than forecast in April and commodity prices dropped. Energy and mining shares account for 43 percent of Canadian stocks by market value.

Canadian energy companies gained today as U.S. first-time claims for jobless benefits fell last week to a one-month low. Suncor Energy climbed 0.8 percent to C$29.30. Canadian Natural Resources increased 1.5 percent to C$31.15. Crescent Point Energy Corp. (CPG), a western Canadian oil and gas producer, rose 3.6 percent to C$42.38.

Political Impasse

Financial companies in the S&P/TSX increased as former Greece Finance Minister Evangelos Venizelos attempted to form a government that will ensure the nation remains in the euro area. Global stocks slumped yesterday amid the political impasse as concern grew that Greece’s debt crisis is worsening.

Royal Bank of Canada rose 1.1 percent to C$53.95. Toronto- Dominion Bank, Canada’s second-largest lender, increased 0.7 percent to C$80.19. Bank of Nova Scotia (BNS), the country’s third- largest lender, gained 0.5 percent to C$52.80.

The S&P/TSX Diversified Metals and Mining index rose as copper advanced for the first time in three days after the news from Greece eased concerns that the country will default on loans, boosting the outlook for global economic growth and commodity demand.

Teck Resources rose 0.5 percent to C$33.42. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi Mongolian gold and copper mine, gained 1.7 percent to C$9.99.

Linamar Corp. (LNR), Canada’s second-largest auto-parts maker, surged 12 percent to C$20.89 after reporting first-quarter earnings excluding some items of 59 Canadian cents, exceeding the average analyst estimate of 53 Canadian cents.

Magna International Inc. (MG) rose 2.3 percent to C$43.64. North America’s largest auto-parts supplier reported that first- quarter profit rose 6.5 percent and raised its full-year sales forecast.

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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