Canadian Stocks Fall After Retail Sales, U.S. Home Prices Drop

Canadian stocks fell for a second day, led by financial companies, after Canadian retail sales and U.S. home prices decreased.

Manulife Financial Corp., North America’s third-biggest insurer, lost 4.6 percent after the U.S. government said home prices retreated for an eighth month. Barrick Gold Corp., the world’s largest gold producer, advanced 1.3 percent as the metal closed at a record $1,292.10 an ounce. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, decreased 2.1 percent as crude oil slumped to a three-week low.

The Standard & Poor’s/TSX Composite Index slipped 23.31 points, or 0.2 percent, to 12,147.26 after gaining 2.2 percent from Aug. 31 through yesterday. The MSCI World Index surged 8.2 percent in the same period. The index of developed-market stocks hasn’t gained that much in a month since July 2009.

“People are looking at the rise in markets that occurred since first of September and trying to figure out, in case of economic uncertainty, is that realistic?” said Robert McWhirter, who oversees C$140 million ($136 million) as a money manager at Selective Asset Management Inc. in Toronto.

Seven of eight Canadian publicly traded insurers and seven of eight banks declined after Statistics Canada reported that retail sales dropped 0.1 percent in July from June. The median forecast of 15 economists in a Bloomberg survey was for a 0.6 percent gain, and none of them had predicted a gain less than 0.5 percent.

U.S. Home Prices

Prices of U.S. homes decreased 0.5 percent in July from the previous month, the Federal Housing Finance Agency said today in Washington. Economists had forecast a retreat of 0.2 percent, according to the median estimate in a Bloomberg survey.

Manulife lost 4.6 percent to C$12.79. Toronto-Dominion Bank, Canada’s second-largest lender by assets, fell 1.4 percent to C$74.22. Laurentian Bank of Canada, the country’s seventh- largest bank, dropped for a seventh day, declining 2.1 percent to C$42.90.

Most S&P/TSX energy stocks declined as crude oil slipped after the U.S. government reported an unexpected increase in inventories.

Canadian Natural lost 2.1 percent to C$33.47. Suncor Energy Inc., Canada’s largest oil and gas producer, slipped 1.5 percent to C$32.35. Niko Resources Ltd., which produces oil and gas in South Asia, decreased 3.4 percent to C$97.85.

FOMC Statement

The U.S. dollar retreated as much as 1.1 percent against a basket of world currencies a day after the Fed’s Open Market Committee said it might need to take more action to recharge the economy.

An index of S&P/TSX gold companies rose for a third day as the metal advanced 1.4 percent.

Barrick increased for a fifth day, rising 1.3 percent to C$48.66. Goldcorp Inc., Canada’s second-largest gold producer, gained 0.8 percent to C$45.59. Silver reseller Silver Wheaton Corp. climbed 3.4 percent to a record C$26.74 as that metal surged 2 percent.

Base metals rallied with the declining U.S. dollar. Copper futures rose 2.4 percent in New York.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, gained for the first time in seven days, rallying 2.3 percent to C$39.91. Ivanhoe Mines Ltd., which is developing a $4.6 billion copper and gold mine in Mongolia with Rio Tinto Group, advanced 3.8 percent to a record C$22.73.

BlackBerry maker Research In Motion Ltd. increased 1.5 percent to C$49, after a 4.1 percent surge yesterday. The company may release a tablet computer with a new operating system at a conference next week, the Wall Street Journal reported late yesterday, citing people familiar with the plans.

Baffinland Soars

Baffinland Iron Mines Corp., which owns iron deposits in the Canadian Arctic, soared 68 percent, the most in six years, to 94 Canadian cents after receiving an 80-cent-a-share takeover offer from Iron Ore Holdings LP. The latter company is backed by the Energy & Minerals Group, a Houston private-equity firm that pools money from investors to take over companies, financing the purchases mostly with debt, with the intention of selling them later for a profit.

Agrium Inc., Canada’s second-largest fertilizer producer, climbed 2.2 percent to C$77.51 after David Silver, an analyst at Bank of America Corp., raised his rating on its shares to “buy” from “neutral.” The stock should benefit from investors who have received cash from acquisitions and want to maintain a stake in the agriculture industry, Silver wrote in a note.

Shoppers Drug Mart Corp., the country’s biggest drug-store chain, rose for a ninth day, the longest streak in six years, gaining 2.3 percent to C$39.30. The company yesterday had its rating raised by Bank of America Corp. and said it will offer financial services at its stores.

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

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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