Canadian Stocks Increase as Gold Rebounds; Potash Corp. Rallies

Canadian stocks rose for the first time in four days as gold futures rebounded from a two-month low and Potash Corp. of Saskatchewan Inc. gained after an analyst raised his share-price estimate on the stock.

Barrick Gold Corp., the world’s biggest gold producer, increased 0.7 percent as the metal climbed after three weeks of losses. Copper producer Quadra FNX Mining Ltd. plunged 12 percent after releasing 2011 forecasts that Greg Barnes, an analyst at Toronto-Dominion Bank, called “disappointing” in a note to clients. Potash Corp., the world’s largest fertilizer producer by market value, rallied 1.9 percent after Horst Hueniken, an analyst at Stifel Financial Corp., said the shares should touch $175 in the next 12 months.

The Standard & Poor’s/TSX Composite Index rose 93.44 points, or 0.7 percent, to 13,352.01 at 11:17 a.m. in Toronto.

Developed economies “will pick up in the summer, and when that happens, all bets are off on the commodities,” said Gerry Brockelsby, who helps oversee about C$125 million ($126 million) as a money manager at Marquest Asset Management Inc. in Toronto. “The fertilizer business is the same as most of the commodities. Particularly China; they need more and more of this stuff, and the supply side is not keeping up with the demand.”

After six months of gains, the S&P/TSX slipped 1.4 percent this month through Jan. 21 as gold stocks plunged 12 percent. The appeal of precious metals has declined as 44 of 60 S&P 500 companies that have reported earnings since Jan. 10 have topped their average analyst estimate, according to Bloomberg data.

Gold Futures Rise

Gold futures advanced as much as 0.9 percent in New York today. Yamana Gold Inc., Canada’s third-largest producer, increased 1.6 percent to C$11.14. Agnico-Eagle Mines Ltd., the country’s No. 5 producer by revenue, climbed 1.2 percent to C$68.45.

Barrick rose 0.7 percent to C$46.90 after saying a partial injunction on the expansion of its Cortez Hills mine in Nevada will be lifted next month. Three Indian tribes oppose the project, citing religious and environmental objections.

Fertilizer producers gained after Hueniken boosted 12-month share-price estimates on North American companies in the industry, telling clients in a note that fertilizer prices are likely to increase.

Potash Corp. climbed 1.9 percent to C$162.83 on the Toronto Stock Exchange as Hueniken raised his price forecast on the company’s U.S.-traded shares to $175 from $162.50. Agrium Inc., Canada’s second-largest fertilizer producer, rallied 1.2 percent to C$87.85 on the TSX after Stifel boosted its share-price estimate to $115 from $100.

Quadra FNX

Quadra FNX sank 12 percent to C$13.76 after forecasting 2011 copper production of about 240 million pounds. Barnes had estimated the company would produce 280 million pounds of copper this year. Earlier today, the shares tumbled as much as 16 percent, the most intraday since December 2008, when the company was known as Quadra Mining Ltd.

Canadian National Railway Co., the country’s largest railroad, rose 1 percent to C$68.10 after announcing a tentative contract agreement with the Canadian Auto Workers. The union had said it would strike tomorrow if an agreement was not reached.

Loblaw Cos., Canada’s largest grocery chain, gained 3.4 percent to C$39.28 after Michael Van Aelst, an analyst at TD, raised his rating on the stock to “action list buy” from “buy.”

In a note to clients, Van Aelst said the stock is historically inexpensive relative to forecast profit. Loblaw traded at $13.21 per dollar of estimated earnings over the next 12 months as of Jan. 21, the lowest since at least 2005, according to Bloomberg data.

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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