Canada Stocks Rise for Eighth Day on U.S. Private-Industry Payrolls Data
Canadian stocks gained for an eighth day, the longest rising streak in seven months, after the U.S. reported a higher-than-forecast increase in private-sector employment.
Manulife Financial Corp., North America’s third-largest insurer, advanced 2.9 percent as U.S. businesses added to their payrolls for an eighth straight month. Goldcorp Inc., the world’s second-biggest gold producer by market value, fell 3.7 percent after agreeing to buy Andean Resources Ltd. for about C$3.6 billion ($3.4 billion). Linamar Corp., Canada’s second- largest auto-parts maker, soared 8.5 percent after U.S. auto sales topped forecasts.
The Standard & Poor’s/TSX Composite Index climbed 33.83 points, or 0.3 percent, to 12,144.92 at 4 p.m. in Toronto, for a 2.2 percent weekly gain.
“The market’s been totally a function of what the economy is doing, so it’s good to see some decent numbers coming in,” said Jennifer Radman, who helps oversee C$1 billion as a money manager at Caldwell Investment Management Ltd. in Toronto. “It’s confidence returning to the market.”
The S&P/TSX gained 5.1 percent during the past eight days, the longest streak of increases since February. Data on U.S. economic growth, manufacturing and home sales eased concern that the recovery might slow for Canada’s biggest trading partner.
Beating Forecast
U.S. private-sector payrolls increased 67,000 in August, the Labor Department said today in Washington. Economists had forecast a gain of 40,000 jobs, according to the median estimate in a Bloomberg survey.
“Whenever we’ve seen announcements like this with good economic news and good corporate announcements, investors have seized on that as a sign the recovery is still on track,” said Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto.
The S&P/TSX trimmed its gain after the Institute for Supply Management’s said its index of U.S. non-manufacturing businesses slipped to 51.5 last month from 54.3 in July. The median economist forecast was 53.2.
The S&P/TSX Financials Index advanced for a sixth day, led by companies with large U.S. businesses.
Manulife, owner of Boston-based John Hancock Financial Inc., increased 2.9 percent to C$13.23, bringing its three-day rally to 11.5 percent, the most since July 2009. Sun Life Financial Inc., an insurer with 45 percent U.S. revenue in the second quarter, climbed 4.8 percent to C$27.83. Toronto-Dominion Bank, which has 1,049 U.S. branches, rose 1.7 percent to C$74.40.
Winning Bid
Goldcorp and Andean announced their deal less than six hours after Eldorado Gold Corp., which mines in Turkey and China, said it offered Andean C$6.36 a share in Eldorado shares for the company. With the Goldcorp offer, Andean shareholders would receive C$6.50 a share in cash, up to C$1 billion, with the balance in Goldcorp shares.
Andean, a Perth, Australia-based company that explores for gold in Argentina, surged 45 percent to C$6.98, a record high. Goldcorp fell 3.7 percent to C$44.49. Eldorado dropped 3.1 percent to C$19.89. Ventana Gold Corp., which also explores for precious metals in South America, jumped 12 percent to C$9.49.
Other gold producers declined as the U.S. employment statistics reduced demand for precious metals as a haven. Barrick Gold Corp., the world’s largest producer, lost 1.1 percent to C$47.09. Osisko Mining Corp., which explores for gold in Quebec, slumped 3.5 percent to C$13.25.
Auto Sales
Auto-parts makers Magna International Inc. and Linamar rose after U.S. auto sales in August did not drop as much as forecast, according to Steve Arthur, an analyst at Royal Bank of Canada.
Magna, Canada’s biggest auto-parts maker, gained 1.5 percent from a two-year high to C$89.21 in its first day of trading after the almost $976.2 million buyout of founder Frank Stronach’s Class B shares. Linamar surged 8.5 percent, the most in six months, to C$19.66.
Producers of raw materials used in the industry rallied as copper futures gained. Teck Resources Ltd., Canada’s largest base-metals and coal producer, rose 2.4 percent to C$39.70, stretching its weekly advance to 13 percent. Copper producer Quadra FNX Mining Ltd increased for a sixth day, the longest streak in almost a year, climbing 2.7 percent to C$13.
To contact the reporter on this story: Matt Walcoff in Toronto at Mwalcoff1@bloomberg.net
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