Canadian Stocks Rise as Gold, Oil Gain on Weaker U.S. Dollar

Dec. 3 (Bloomberg) -- Canadian stocks rose for a fifth day as the U.S. dollar fell the most in five months, boosting oil and precious-metal futures.

Barrick Gold Corp., the world’s largest gold producer, increased 1.2 percent as the metal gained for a fifth day. Royal Bank of Canada, Canada’s largest lender by assets, dropped 4.4 percent after failing to meet the average analyst profit forecast for the fifth-straight quarter. Suncor Energy Inc., the country’s biggest oil and gas producer, advanced 1.5 percent as crude climbed to a 25-month high.

The Standard & Poor’s/TSX Composite Index rose 15.42 points, or 0.1 percent, to 13,178.95. For the week, the index rallied 2.2 percent, the most in three months.

“Silver’s on a monster run, gold’s on a monster run and the U.S. dollar is weak,” said Steven Conville, who helps manage C$8 billion ($7.96 billion) at Macquarie Private Wealth Inc. in Markham, Ontario. “The index is being lifted by a high concentration in resources.”

The Thomson Reuters/Jefferies CRB Commodity Price Index advanced 5 percent this week, the most in 13 months, as a gauge of Chinese manufacturing increased more than forecast and the U.S. dollar retreated after three weeks of gains. Energy and raw-material companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

The greenback fell 1.4 percent against a basket of world currencies today after the U.S. reported its unemployment rate rose to 9.8 percent from 9.6 percent last month. Nonfarm payrolls increased by 39,000, less than all 27 economist estimates in a Bloomberg survey.

Record Run

An index of S&P/TSX gold companies climbed for a fourth day to a record. Barrick rallied 1.2 percent to an all time high of C$54.22. Producer Gammon Gold Inc. surged 8.5 percent to C$7.79 after Timmins Gold Corp., a rival bidder for Capital Gold Corp., said it wouldn’t increase its offer. Silver reseller Silver Wheaton Corp. rose 2.6 percent to C$39.37 as the metal climbed to a 30-year high.

Crude oil gained 1.4 percent to $89.19 a barrel in New York. Suncor advanced 1.5 percent to C$36.24. Cenovus Energy Inc., Canada’s fifth-largest energy company by market value, increased 2.2 percent to C$31.62.

Canadian Oil Sands Trust, the biggest owner of the Syncrude project, slumped 12 percent, the most in 24 months, to C$25.05 after saying it expects to declare a quarterly dividend of 20 cents a share next month. The company’s last three shareholder payouts have been 50 cents a unit, and Bloomberg analysts had forecast a dividend of 35 cents a share for next quarter.

Analysts at Bank of Montreal and UBS AG cut their rating on Canadian Oil Sands units.

Oilfield services company Trinidad Drilling Ltd. soared 7.9 percent to C$5.89 after announcing a debt offering. Some of the proceeds will be used to pay off higher-interest debt. Greg Colman, an analyst at Wellington West Holdings Inc., raised his 12-month price estimate on the shares to C$8.15 from C$7.50, telling clients the placement will reduce balance sheet risk.

Ivanhoe Energy Inc., which produces oil and gas in China, soared 9.1 percent to C$2.39 after announcing the completion of digging of two wells.

Canadian bank stocks fell after Royal Bank said it earned 84 cents a share in the fourth quarter, excluding certain items, trailing the average analyst estimate by 17 percent. Yesterday, its largest competitor, Toronto-Dominion Bank, reported profit that missed its average analyst estimate by 5.3 percent, excluding certain items.

“They’re the heavyweights,” Conville said. “If their stuff is not good, then that’s letting you know the broader economy is not as good as we want it to be.”

Earnings Effect

Royal Bank dropped 4.4 percent, the most since May 2009, to C$53.25. TD declined 1.5 percent to C$72.23. Bank of Nova Scotia, the No. 3 bank, advanced 3.1 percent to a record C$55.63 after reporting earnings that topped the average analyst forecast by 2.5 percent.

Western Coal Corp., which mines in Canada and the U.S., jumped 13 percent to a record C$11.60 after agreeing to an C$11.50-a-share takeover offer from Walter Energy Inc. Teck Resources Inc., Canada’s largest coal and base-metals producer, climbed for a fifth day, rallying 1.6 percent to C$54.86.

Rogers Communications Inc., Canada’s largest wireless carrier, retreated for a fourth day, losing 2.8 percent to C$35. The Ontario Teachers’ Pension Plan would demand $1.5 billion for its 66 percent share of Maple Leaf Sports & Entertainment Ltd., the Globe & Mail reported, citing unidentified people with knowledge of the matter.

The Toronto Star said Dec. 1 that Rogers is in talks to buy the owner of the Toronto Maple Leafs hockey team.

Vector Aerospace Corp., which repairs aircraft engines, surged 22 percent, the most in seven years, to a record C$8.80. The company announced a review of strategic alternatives, including a potential sale of the business.

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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