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Canadian Stocks Fall as U.S. Economic Data Weakens Gold Futures

Canadian stocks fell, erasing earlier gains, after stronger-than-estimated U.S. economic data weakened gold prices and spurred speculation the U.S. Federal Reserve will buy fewer assets than forecast to boost growth.

Barrick Gold Corp., the world’s largest producer, lost 1.7 percent as the metal slipped 1.9 percent. Copper producer Taseko Mines Ltd. sank 33 percent as the Canadian government denied its plans for a mine in British Columbia. Agrium Inc., the country’s second-largest fertilizer producer, dropped 3.8 percent after reporting profit 60 percent below the average analyst estimate, excluding certain items.

The Standard & Poor’s/TSX Composite Index decreased 98.36 points, or 0.8 percent, to 12,583.06 as of 11:26 a.m. in Toronto before a Fed decision on a potential securities-purchasing program known as quantitative easing.

“Expectations of quantitative easing are becoming less and less,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which oversees C$1.7 billion ($1.69 billion). “If things are OK, there’s no need to pump so much money in there and build up future problems with inflation as well as drive down the U.S. dollar.”

The benchmark climbed 0.1 percent from Oct. 13 to yesterday as investors awaited the U.S. Federal Reserve’s decision on whether to increase the money supply through asset purchases. A Fed announcement is scheduled for about 2:15 p.m. in Washington.

U.S. factory orders rose 2.1 percent in September, the Commerce Department said today in Washington. Economists had forecast a gain of 1.6 percent, according to the median of 68 economist estimates in a Bloomberg survey.

ISM Index

The ISM’s index of U.S. non-manufacturing businesses advanced to 54.3 last month from 53.2 in September. The median forecast for October among 76 economists in a Bloomberg survey was 53.5. ADP Employer Services said earlier that U.S. employment rose by 43,000 last month. The median projection in a Bloomberg survey called for a gain of 20,000.

Gold and silver futures fell the most in two weeks as the U.S. dollar advanced against most other major currencies.

Barrick lost 2.7 percent to C$48.32. Goldcorp Inc., the world’s second-largest gold producer by market value, decreased 2.1 percent to C$44.42. Kinross Gold Corp., Canada’s third- biggest producer, retreated 2.3 percent to C$17.72.

Taseko Mines slumped 33 percent to C$4.38 a day after Canadian Environment Minister Jim Prentice said the government has refused permission for the Prosperity mine. In July, a government panel had said the project would harm fish habitat, navigation and land use by Indian groups.

Gold Buyer

Franco-Nevada Corp., which had agreed to buy 22 percent of the gold produced at Prosperity, fell 4.8 percent to C$33.84 and dropped as much as 6.4 percent, the most in nine months.

Agrium fell 3.8 percent to C$84.67 after its third-quarter profit missed the average analyst estimate by 60 percent, excluding certain items. P.J. Juvekar, an analyst at Citigroup Inc., cut his rating on the shares to “hold” from “buy.”

Construction company Aecon Group Inc. tumbled 9.2 percent to C$11.03 after its third-quarter earnings excluding certain items missed the average analyst estimate by 62 percent. The shares plunged as much as 9.8 percent, the most intraday since 2008.

Twelve of 17 S&P/TSX companies that reported financial results since yesterday’s market close topped the average earnings estimate of analysts.

Intact, Calfrac

Property and casualty insurer Intact Financial Corp. rose 4.1 percent to C$47.50 after its adjusted third-quarter profit surpassed the average analyst estimate by 38 percent. Oilfield- services provider Calfrac Well Services Ltd. surged 5.7 percent to C$27.32 after reporting earnings that beat the average analyst estimate by 74 percent, excluding certain items.

ShawCor Ltd., which provides products and services to the energy industry, gained 5.9 percent to C$32.62 after topping its average analyst profit estimate by 12 percent.

WestJet Airlines Ltd., Canada’s largest airline by market value, advanced 4.5 percent to a six-month high of C$13.37 after instituting a quarterly dividend. The company also said it may buy back as much as 5 percent of its outstanding shares over the next year.

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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