Stocks in Toronto Climb as Weaker U.S. Dollar Helps Gold, Oil to Advance

Canadian stocks rose for a second day, led by gold producers, as prices of the precious metal rose to the highest since December on concern sovereign risk may erode the value of currencies.

Barrick Gold Corp., the world’s largest producer of the metal, increased 3 percent as Canadian gold companies advanced for an eighth day. Open Text Corp., the largest software company based in Canada, plunged 9 percent after missing analysts’ earnings estimates. Suncor Energy Inc., Canada’s biggest oil and gas company, climbed 1.9 percent as oil futures rallied to their highest price in two weeks.

The Standard & Poor’s/TSX Composite Index rose 10.38 points, or 0.1 percent, to 12,210.70. For the month, the index gained 1.4 percent, led by a 5.7 percent surge in raw materials producers.

“It truly signals that gold is now possibly becoming the currency of last resort,” said Derek Webb, president of Webb Asset Management Inc. (USA), which manages C$40 million ($39 million) for U.S. and Canadian clients.

Gold has gained 5.9 percent this month as European leaders struggled to control a debt crisis that has led to S&P downgrades of Greek, Portuguese and Spanish credit ratings.

Greek bond yields fluctuated today as European officials said a decision on a bailout of the country will happen in the forthcoming days.

“The sovereign issue has been brought back front and center, and people are realizing there’s going to be no easy solutions,” Webb said.

Gold’s Streak

Gold futures rallied 1 percent to $1,180.70 an ounce on the Comex in New York. The S&P Gold Index’s eight-day streak of gains is the longest since 1994.

Barrick climbed 3 percent to a 2010 high of C$44.30. Iamgold Corp., which mines in South America, Canada and Africa, surged 4.1 percent to C$18.18. Aurizon Mines Ltd., which operates in Quebec, soared 5.3 percent to a 12-month high of C$5.79 to lead the S&P/TSX.

Goldcorp Inc., Canada’s second-largest gold producer, rose 2.1 percent to C$43.91 as Royal Bank of Canada analyst Michael D. Curran increased his 12-month price estimate on the company’s U.S.-listed shares to $52 from $48.

Crude oil for June delivery increased 98 cents to $86.15 a barrel after the U.S. Commerce Department said the country’s economy grew at an annual rate of 3.2 percent last quarter, capping the biggest six-month gain since 2003.

Energy Shares

Suncor advanced 1.9 percent to C$34.75. EnCana Corp., Canada’s largest natural gas producer, climbed 2 percent to C$33.60.

Most banks and insurers fell after reports that U.S. prosecutors are considering criminal fraud charges against Goldman Sachs. Federal prosecutors in New York are conducting a review of the case, according to two people familiar with the matter.

Also today, Barclays Plc, the U.K.’s third-largest bank by assets, said revenue at its investment banking unit dropped 26 percent last quarter.

Royal Bank declined 1.3 percent to C$61.59. Toronto- Dominion Bank, Canada’s second-biggest bank, lost 0.6 percent to C$75.50. Manulife Financial Corp., Canada’s largest insurer, decreased 1.6 percent to C$18.32.

Property and casualty insurer Fairfax Financial Holdings Ltd. jumped 4.7 percent, the most since September, to C$385. Bank of Montreal analyst Tom MacKinnon raised his price estimate on the stock to C$420 from C$400 after the company’s first- quarter profit surpassed both analyst estimates in a Bloomberg survey.

Open Text Declines

Open Text tumbled 9 percent, the most since 2006, to C$43.03 after its third-quarter profit of 70 cents a share missed the average of 17 analyst estimates by 5.4 percent. At least eight analysts reduced their 12-month price forecasts on the stock.

Sierra Wireless Inc., which makes wireless-communications products, sank 13 percent to C$8.23 after estimating it will earn 5 cents a share to 12 cents a share in the second quarter, compared with the average analyst forecast of 14 cents a share.

To contact the reporters on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

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