Canada Stocks Slip as RIM, Suncor Fall on U.S. Retailer Sales, Fed Minutes
Canadian stocks fell after the U.S. reported a larger-than-expected drop in retail sales and the Federal Reserve trimmed its growth forecast for the year.
RIM, the BlackBerry maker, declined 0.9 percent after failing to provide a time frame for the release of a new operating system at its annual meeting. Ritchie Bros. Auctioneers Inc. tumbled 9.3 percent on speculation the company will reduce its forecasts for gross auction proceeds. Suncor Energy Inc., Canada’s largest oil and gas producer, slipped 0.8 percent as natural gas futures decreased.
The Standard & Poor’s/TSX Composite Index fell 17.92 points, or 0.2 percent, to 11,654.92 as of 3:28 p.m. in Toronto.
“Because we export a lot to the United States, Canada’s going to be hugely influenced by the health of the U.S. economy,” said Murray Leith, who helps manage C$6.5 billion ($6.3 billion) as a money manager at Odlum Brown Ltd. in Vancouver. “It just seems to be a very fickle, short-term- oriented market, so the weak retail numbers give people an excuse to sell.”
The S&P/TSX surged 5.2 percent in the six days ending yesterday as the country reported job growth five times the median economist estimate and France’s Total SA agreed to buy oil sands developer UTS Energy Corp. The index rallied 0.9 percent yesterday after Alcoa Inc. began the earnings-reporting season by topping the average analyst estimate by 14 percent, excluding certain items.
Retail sales retreated 0.5 percent in May, the U.S. Commerce Department said today. Economists had forecast a loss of 0.3 percent, according to the median of 75 economists’ estimates in a Bloomberg survey.
Fed Minutes
North American stocks dropped further after minutes of last month’s meeting of Fed officials said “the economic outlook had softened somewhat.” The central bankers lowered their central tendency forecast for 2010 growth to a range of 3 percent to 3.5 percent versus 3.2 percent to 3.7 percent in April.
Natural gas futures decreased 1.1 percent, while crude oil lost earlier gains to settle at $76.79 a barrel, down 9 cents.
Suncor fell 0.8 percent to C$32.91 to contribute the most to the S&P/TSX’s loss. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, dropped 1.7 percent to C$16.61. Canadian Oil Sands Trust, the largest owner of the Syncrude project, declined 1.3 percent to C$27.39.
Canada’s largest insurers, which all have operations in the U.S., retreated. Manulife Financial Corp., North America’s third-largest insurer, lost 0.9 percent to C$15.57.
U.S. Revenue
Great-West Lifeco Inc., Canada’s second-largest insurance company, decreased 1.2 percent to C$24.78. Sun Life Financial Inc., which got 47 percent of its revenue from the U.S. last year, slipped 0.7 percent to C$28.20.
RIM, Canada’s largest technology company, fell after surging 11 percent in the previous three days, losing 0.9 percent to C$57. The company made no major announcements at its annual meeting yesterday, and UBS AG analyst Maynard J. Um told clients RIM provided “little clarity on timing & strategy” on a new operating system.
Ritchie Bros., which calls itself the world’s largest industrial auctioneer, sank 9.3 percent, the most in 13 months, to C$19.33 after announcing a conference call to be held tomorrow.
Raymond James Financial Inc. analyst Ben Cherniavsky told clients in a note that he thinks the company will reduce its forecast for 2010 gross auction proceeds. Analyst Craig R. Kennison of Robert W. Baird & Co. cut his 12-month price estimate on the company’s U.S.-listed shares to $22 from $24, citing the company’s announcement.
Alimentation Couche-Tard
Alimentation Couche-Tard Inc., the owner of Mac’s and Circle K convenience stories, retreated for the first time in nine days, decreasing 3.1 percent to C$19.86. Analyst Vishal Shreedhar of UBS reduced his rating on the stock to “neutral” from “buy,” citing recent share-price increases. Couche-Tard had soared 15 percent this month through yesterday.
Money manager Sprott Inc. rallied 8.5 percent to C$3.58 and earlier today surged as much as 14 percent, the most since 2008. Cormark Securities Inc. President Peter Grosskopf will replace company founder Eric Sprott as chief executive officer on Sept. 7, the company said yesterday.
To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@bloomberg.net
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