Canada Stocks Rise as Banks, RIM Rally After U.S. Profit Reports

Canadian stocks climbed, sending the main benchmark higher for the third week in four, as banks and technology companies rose on better-than-forecast earnings at JPMorgan Chase & Co. and Intel Corp.

Royal Bank of Canada and Toronto-Dominion Bank gained at least 1.8 percent after JPMorgan’s profit rose 47 percent, beating analyst estimates. Research In Motion Ltd. advanced 1.4 percent as Intel’s higher-than-estimated earnings spurred a technology rally. Goldcorp Inc. led a drop in gold producers as the metal slumped to the lowest in seven weeks.

The Standard & Poor’s/TSX Composite Index rose 62.58 points, or 0.5 percent, to 13,464.06 as of 4 p.m. in Toronto. The main benchmark for Canadian equities, which closed at a two- year high on Jan. 12, has risen 1.4 percent this week.

“We had some strong reports out of Intel and JPMorgan, two bellwethers in the market,” said Youssef Zohny, who helps oversee C$50 million ($48.8 million) as an associate portfolio manager at Van Arbor Asset Management Ltd. in Vancouver. “At the same time, we have continued weakness in gold and silver companies, which is an indicative of anticipation for stronger economic growth.”

The S&P/TSX fell 0.3 percent this month through yesterday after surging 14 percent last year. The equity benchmark was led by a 36 percent surge in 2010 in raw-materials companies, the third-largest industry in the Canadian stock market. Demand from emerging markets such as China, whose economy grew by 10 percent last year, according to the average estimate in a Bloomberg survey of economists, led to gains in base-metal prices.

Banks Rally

Financial shares, which make up the largest portion of the S&P/TSX, rose 1.7 percent as a group today, for the biggest gain among 10 industries. JPMorgan, the second-biggest U.S. bank by assets, posted a record $4.83 billion profit, buoyed by $2 billion in reserves added back to earnings as credit quality and the U.S. economy improved.

Royal Bank, Canada’s largest bank by assets, rallied 1.8 percent to C$53.89. Toronto-Dominion rose 2.8 percent to C$76.17.

RIM rose 1.4 percent to C$64.18, following gains in U.S. chipmakers.

Intel, the world’s biggest chipmaker, said fourth-quarter net income jumped 48 percent to $3.39 billion, or 59 cents a share, from $2.28 billion, or 40 cents, a year earlier. Analysts had estimated profit of 53 cents a share. Intel also forecast first-quarter sales that may exceed analysts’ estimates as companies boost spending on computers and servers.

Fertilizer Producers

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer company, rose 1.6 percent to C$170.60. Agrium, North America’s third-largest potash producer by capacity, gained 0.8 percent to C$92.50. Credit Suisse Group AG analyst Elaine Yip raised earnings estimates and price forecasts for the companies and their U.S. rivals CF Industries Holdings Inc., Intrepid Potash Inc. and Mosaic Co.

Potash, CF and Agrium are Credit Suisse’s top picks as rising crop prices drive demand for fertilizer, Yip said in a report. She increased her U.S. dollar price target for Potash to $189 from $160, and for Agrium to $105 from $93.

“Because of continuing demand for food products, you need fertilizer to expand returns in the farmland,” said Fred Ketchen, Toronto-based managing director of equity trading at Scotia McLeod Inc., which manages about C$100 million ($94 million). “There a lot of enthusiasm and underlying support in the market.”

Gold

Raw-materials producers had the biggest decline in the S&P/TSX, dropping 1.4 percent, collectively.

Barrick Gold Corp., the world’s biggest gold-mining company, fell 0.6 percent to C$46.59. Goldcorp, the second- biggest by market value, dropped 3.3 percent to C$40.17. Silver Wheaton Corp., a silver reseller, declined 2.3 percent to C$31.38.

Mullen Group Ltd. rose 10 percent to C$19.09 for the biggest advance in the S&P/TSX. Macquarie and First Energy Capital upgraded the oil and natural-gas transportation company to “outperform.”

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net; Jennifer A. Johnson in New York at Jjohnson156@bloomberg.net

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

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