Canadian Stocks Decline as Concern Over European Debt Mounts

Canadian stocks fell after Cisco Systems Inc. forecast profit below analysts’ estimates and European bond yields rose on concern over budget deficits.

Toronto-Dominion Bank, Canada’s second-biggest lender by assets, retreated 0.8 percent as financial companies slumped for a third day. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 0.9 percent as natural gas prices decreased. Canadian Tire Corp., the country’s fifth-largest retailer by market value, advanced 7 percent after reporting per-share earnings that topped the average analyst estimate by 21 percent, excluding certain items.

The Standard & Poor’s/TSX Composite Index fell 46.26 points, or 0.4 percent, to 12,896.38 as of 10:29 a.m. in Toronto.

The S&P/TSX dropped 3.9 percent in the first half of the year, in part on concern a European debt crisis would derail the global recovery. Since then, the benchmark has jumped 14 percent, led by raw-materials producers, as commodities have surged on speculation central-bank stimulus measures would weaken the U.S. dollar.

Today, Irish and Spanish government bonds each declined for a 13th day as French Foreign Minister Christine Lagarde said investors must share in the cost of safeguarding sovereign debt.

Royal Bank of Canada, the country’s largest bank, slipped for a fourth day, losing 0.9 percent to C$53.78. TD decreased 0.8 percent to C$73.04. Sun Life Financial Inc., Canada’s third- biggest insurer, retreated 1.1 percent to C$28.98.

Oil, Gas

S&P/TSX energy stocks fell as natural gas dropped on forecasts for milder weather in the U.S. and oil fluctuated after closing at a two-year high yesterday.

Suncor dropped 0.9 percent to C$36. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, slipped 0.6 percent to C$19.86. Pacific Rubiales Energy Corp., which produces oil and gas in Colombia, declined for a fifth day, slumping 2.1 percent to C$31.46

BlackPearl Resources Inc., which produces oil in Canada, surged 13 percent to C$5.23 after announcing the results of an independent resource assessment on its core properties. Analysts at Macquarie Group Ltd., Bank of Nova Scotia and FirstEnergy Capital Corp. raised their share-price estimates on the company.

Gold stocks retreated as the U.S. dollar climbed for a fifth day against a basket of world currencies.

Barrick Gold Corp., the world’s largest producer, decreased 0.7 percent to C$51.49. Goldcorp Inc., the world’s second- biggest producer by market value, lost 0.6 percent to c$47.16. Eldorado Gold Corp., Canada’s fifth-largest gold-mining company by market value, slumped 1.6 percent to C$17.38.

Cisco Forecast

Technology companies fell after Cisco, the world’s largest maker of computer networking equipment, forecast second-quarter earnings at least 16 percent below the average analyst estimate.

BlackBerry maker Research In Motion Ltd. dropped 1.3 percent to C$57.84. Celestica Inc., which makes electronics for companies including Cisco and RIM, declined 3 percent to C$8.97.

Canadian Tire and Caterpillar dealer Finning International Inc. rallied after topping analysts’ profit forecasts.

Canadian Tire surged 7 percent to C$63 after raising its quarterly dividend 31 percent to 27.5 cents a share as of the dividend payable March 1. Earlier today, the stock jumped as much as 9.4 percent, the most intraday since 2008

Finning rose 5.4 percent from a two-year high to C$26.36. The company’s third-quarter earnings surpassed the average of 13 analyst estimates by 40 percent, excluding certain items, the most since at least 2005.

CML Healthcare Income Fund, which operates medical-imaging and laboratory-testing clinics, sank 8 percent, the most intraday in two years, to C$11.23. The company announced third- quarter earnings of 23 cents a share, excluding certain items, compared with analyst forecasts of 25 cents a share and 27 cents a share.

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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