Canadian Stocks Gain on U.S. Home Sales, CP Railway Profit

Canadian stocks gained, erasing the 2011 loss for the nation’s benchmark index, as commodity producers gained on stronger-than-estimated U.S. home sales and Canadian Pacific Railway Ltd. beat analyst earnings estimates.

Suncor Energy Inc., the country’s biggest oil and gas producer, advanced 4 percent as crude futures rebounded from an eight-week low. First Quantum Minerals Ltd., Canada’s second- largest publicly traded copper producer, rose 6.8 percent as the metal rallied. Oilfield services company Trinidad Drilling Ltd. climbed 5.5 percent. Canadian Pacific rose 2.9 percent.

The Standard & Poor’s/TSX Composite Index rose 206.12 points, or 1.6 percent, to 13,465.75 at 4 p.m. in Toronto, the biggest increase in two months.

“Canadian Pacific is a good indicator in terms of traffic for other industries,” said Robert Floyd, president of BirchLeaf Investments Inc., who says his growth-oriented investments for clients soared 56 percent in 2009 and an additional 22 percent through Nov. 30. He declined to disclose his assets under management. “That would suggest that things are humming along at a fairly good pace. A lot of investment professionals look at the rails for investment direction.”

The S&P/TSX had fallen 1.4 percent this month through yesterday as gold, oil and copper futures declined. The MSCI World Index of developed-market stocks gained 2.4 percent as 68 percent of its companies that announced financial results since Jan. 10 had topped analysts’ profit forecasts.

U.S. Home Sales

The Thomson Reuters/Jefferies CRB Index of commodity futures rose for the first time in three days, gaining 1.6 percent, after the Commerce Department said U.S. new-home sales climbed 18 percent in December to a 329,000 annual pace. The median estimate of economists in a Bloomberg News survey called for a rise to 300,000.

U.S. President Barack Obama last night called for progress on stalled trade pacts, investments in roads and education, reworking the corporate tax code, and freezing discretionary spending to cut the deficit.

U.S. Federal Reserve policy makers maintained plans to buy $600 billion of Treasuries through June. The expansion is “continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said today in its statement.

The U.S. is Canada’s biggest trade partner.

Optimism

“We saw a bit of optimism after Obama’s speech last night, but the biggest thing boosting the market is better-than- expected home sales in the U.S.,” said Youssef Zohny, who helps oversee C$50 million ($49.8 million) as an associate portfolio manager at Van Arbor Asset Management Ltd. in Vancouver. “Overall, economic data is really driving the market.”

Canadian Pacific Railway Ltd. rose 2.9 percent to C$68.28, the highest price since June 2008. The country’s second-largest railroad said fourth-quarter earnings were C$1.12 a share on an adjusted basis, beating the average analyst estimate of C$1.08, according to a Bloomberg survey.

Energy companies in the S&P/TSX Index closed at the highest level since Sept. 2008. Crude futures rose 1.3 percent to $87.33 a barrel in New York, while copper rose 1 percent to $4.267 a pound.

Energy Shares

Canadian Natural Resources Ltd., the country’s second largest energy company by market value, climbed 3.1 percent to C$42.64. Suncor Energy, gained 4 percent to C$39.10. Cenovus Energy Inc., Canada’s fifth-biggest energy company rose 4 percent to C$32.72. Trinidad Drilling rose the most since Dec. 7, gaining 5.5 percent to C$6.68. Talisman Energy climbed 3.1 to C$22.60.

First Quantum, a Vancouver-based copper and gold mining company, jumped 6.8 percent to C$119.51. Capstone Mining Corp. rose 6.2 percent to $C4.60. The copper producer with operations in Canada and Mexico affirmed its forecast for 2011 copper production.

Magna International Inc., Canada’s biggest autoparts company, rose 2.5 percent to C$58.22, after Citigroup Inc. included the shares among its top picks.

Gold producers in the S&P/TSX Composite Index rose the most since May 25. Barrick Gold Corp., the world’s largest producer of the metal, rose 3.6 percent to C$47.59. Kinross Gold Corp., Canada’s third-largest producer of the metal, climbed 5.2 percent to C$17.15.

To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@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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