Canada Stocks Rise for Second Day on Increase in U.S. Consumer Confidence

Canadian stocks gained for a second day, extending a weekly advance, after consumer confidence rose more than expected in the U.S.

Barrick Gold Corp., the world’s largest gold producer, increased 0.8 percent as the metal climbed for the first time in three days. Suncor Energy Inc., Canada’s largest oil and gas company, advanced 1.1 percent on an analyst rating. Teck Resources Ltd., the country’s biggest base-metals producer, climbed 2.2 percent as copper rallied for a fourth day.

The Standard & Poor’s/TSX Composite Index rose 31.07 points, or 0.3 percent, to 11,666.92. The index increased 0.8 percent on the week.

“A lot of people say they’re really going to determine global growth,” Jennifer Radman, who helps oversee C$1 billion ($964 million) as a money manager at Caldwell Investment Management Ltd. in Toronto, said about U.S. consumers. “If consumers aren’t buying the Chinese goods, there’s nothing for the Chinese to manufacture. So much of our economy is dependent on how the U.S. does.”

The S&P/TSX has fallen 3.1 percent this quarter. The Canadian benchmark has outperformed all but four of 23 other developed markets’ primary indexes as a 10 percent gain in gold has largely offset the impact of the European debt crisis.

The Thomson Reuters/University of Michigan preliminary June consumer sentiment index increased to 75.5 from 73.6 last month. Economists forecast an advance to 74.5, according to the median estimate in a Bloomberg survey.

Natural gas gained for the first time in four days on speculation hot weather in the U.S. will boost demand for the fuel used in some power plants.

Suncor and Nexen Inc. rose after Canadian Imperial Bank of Commerce analyst Andrew Potter gave them “sector outperformer” ratings in new coverage, saying the stocks could return 30 percent in the next 12 to 18 months.

Suncor, Nexen

Suncor gained 1.1 percent to C$33.75 after Potter told clients its combination of “industry-leading oil growth” and “substantial free cash flow” merits a premium price versus its peers. Nexen, an oil and gas producer with operations on five continents, advanced 1.5 percent to C$22.90. Cenovus Energy Inc., the oil company spun off from EnCana Corp. in December, increased 0.9 percent to C$29.72 after receiving another “sector outperformer” rating from Potter.

Gold futures advanced 0.7 percent in New York as the euro slipped against the U.S. dollar for the first time in four days.

“There’s so much hand-wringing over the euro, it has prompted some investors to switch a part of their euro holdings and just hold gold,” said Terry Shaunessy, president of Shaunessy Investment Counsel in Calgary, which manages C$200 million. “The confidence level still is not high among participants in the market when it comes to reassurance given by those in positions of authority.”

Barrick, Iamgold

Barrick increased 0.8 percent to C$44.56. Eldorado Gold Corp., which has operations in Turkey and China, climbed 1.8 percent to C$17.89. Iamgold Corp., which mines in Africa, South America and Quebec, rallied 4.9 percent to C$18.29.

Nevsun Resources Ltd., which is developing a gold, copper and zinc mine in Africa, surged 17 percent to a three-year high of C3.65. The company said it “is not aware of any material undisclosed development” behind the jump in share price.

Copper completed its biggest weekly increase in two months, and other base metals also climbed. Teck rose 2.2 percent to C$34.93. Base-metals and coal producer Sherritt International Corp. gained 2.5 percent to C$6.50.

Manulife Financial Corp. and Agrium Inc. decreased after downgrades to “neutral” from “buy” from Bank of America Corp. analysts. Manulife, North America’s third-largest insurer, lost 1.2 percent to C$16.52 on the cut by analyst Steve Theriault. Agrium, Canada’s second-biggest fertilizer producer, retreated 1.3 percent to C$54.17 after David C. Silver reduced his rating on the stock.

Satellite-equipment maker Com Dev International Ltd. plunged 19 percent, the most in eight years, to C$1.89 after reporting earnings that missed the average analyst estimate by 21 percent, excluding certain items. Analysts at CIBC and National Bank of Canada reduced their ratings on the Cambridge, Ontario-based company.

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

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