Canadian Stocks Rally Led by Gold Producers; RIM Advances
Canadian stocks rose, completing a weekly gain, as gold share rallied after U.S. and Canadian employment reports missed estimates and Research In Motion Ltd. gained on speculation it can avert a ban on BlackBerry services in Saudi Arabia.
Barrick Gold Corp., the world’s largest producer of the metal, advanced 2.8 percent as gold futures climbed for an eighth day. RIM advanced 3.5 percent. Magna International Inc., Canada’s largest auto-parts maker, surged 7.5 percent as it beat analysts’ estimates for second-quarter profit.
The Standard & Poor’s/TSX Composite Index increased 25.20 points, or 0.2 percent, to 11,799.97 at 4:12 p.m. in Toronto, for a 0.7 percent weekly gain.
“When there’s economic jitters people always go to gold,” said Sadiq Adatia, who helps manage C$12 billion ($11.6 billion) as chief investment officer at Russell Investment Canada in Toronto. “And RIM cannot not be in those markets -- people will back away from that a little bit.”
The S&P/TSX has gained less than 0.5 percent this year as a U.S. unemployment rate stuck at 9.5 percent dimmed the impact of stronger-than-forecast corporate earnings. The Thomson Reuters/Jefferies CRB Commodity Price Index has dropped 3.1 percent. Energy and raw-materials companies make up 46 percent of Canadian stocks by market value.
Canadian stocks fell earlier after the Labor Department said U.S. private payrolls expanded by 71,000 last month, compared with the average economist estimate of 90,000. June’s figure was reduced to 31,000 from a preliminary 83,000.
Canadian payrolls shrank by 9,300 jobs in July, the first drop this year, Statistics Canada said. Twenty-one of 22 economists in a Bloomberg survey had forecast a gain in employment.
Gold futures gained 0.5 percent to extend their longest rally since November as the U.S. employment report dragged the U.S. Dollar Index to its lowest level since April 14, boosting the appeal of precious metals as alternative assets.
Barrick advanced 2.8 percent to C$44.65 for a seventh- straight rise. Goldcorp Inc., Canada’s second-largest gold producer, increased 2.3 percent to C$41.61. Yamana Gold Inc., which mines in South America, rallied 3.3 percent to C$10.24.
RIM advanced 3.5 percent to $54.93. The Waterloo, Ontario- based company and three Saudi Arabian phone carriers are in talks to avert a ban on BlackBerry services in the country, after a government deadline to shut off its messaging service lapsed, two people familiar with the talks said.
Magna International Inc., Canada’s largest auto-parts maker, surged 7.5 percent to C$81.37 after beating analysts’ average second-quarter profit estimate by 72 percent, excluding certain items. The company also raised its quarterly dividend 67 percent to 30 cents a share, payable Sept. 15.
GMP Capital Inc. surged 4.7 percent to C$9.79. Canada’s second-largest non-bank brokerage raised its quarterly dividend to 6 cents a share from 5 cents a share.
Manulife Financial Corp. fell 1.2 percent to C$14.03 to add on to yesterday’s 11 percent decline, which followed the announcement of a wider-than-forecast second-quarter loss. Other financial shares declined. Royal Bank of Canada, the country’s biggest bank, decreased 0.6 percent to C$52.98. Brookfield Asset Management Inc., the country’s biggest real estate company, slipped 0.5 percent to C$26.40 after missing all three analysts’ second-quarter profit estimates in a Bloomberg survey.
Crude oil retreated for a third day, while natural gas’s gains from earlier in the day were wiped out.
Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, dropped 0.4 percent to C$36.44. EnCana Corp., Canada’s biggest natural gas producer, decreased 1.1 percent to C$32.02.