Canada Stocks Pare Gains as Middle Eastern Instability Grows
Canadian stocks fell for a fourth day as commodity producers slipped after violent protests in Libya heightened concern that political instability in the Middle East will slow the economic recovery.
Suncor Energy Inc. dropped 4.5 percent to lead declines among energy producers as oil fell on assurances from the U.S., Saudi Arabia and the International Energy Agency that they can compensate for any disruption of Libyan shipments. Barrick Gold Corp. declined 3.1 percent as gold fluctuated after seven days of gains. Autoparts maker Magna International Inc. slumped 10 percent after the reporting fourth-quarter earnings that missed analyst estimates.
The Standard & Poor’s/TSX Composite Index fell 81.15 points, or 0.6 percent, to 13,875.04 at 3:45 p.m. in Toronto.
“It’s still about the Middle East, Libya, Yemen, Egypt -- all those countries. There are still a lot of jitters from that area,” said Adrian Mastracci, a money manager at KCM Wealth Management Inc. in Vancouver and leader in the Globe & Mail’s annual stock-picking competition for financial professionals. “The economic recovery is still not fully developed, so you do have to be mindful of some risks.”
Economists surveyed by Bloomberg estimate Canadian gross domestic product growth accelerated 3.2 percent this quarter from 2.3 percent in the fourth quarter 2010. Sixty-four out of 118 companies in the S&P/TSX Index that have reported earnings since Jan. 10 have surpassed analyst estimates, Bloomberg data show.
Libya’s Muammar Qaddafi, who has lost control of much of the country’s oil-rich east, appealed to citizens to end violence as his forces stepped up a crackdown on opponents and more than 100 people were reportedly shot dead.
Crude oil for April delivery fell 0.8 percent to settle at $97.28 a barrel on the New York Mercantile Exchange. The contract touched $103.41, the highest intraday price since September 2008. Suncor Energy, Canada’s biggest oil and gas producer, slumped 4.5 percent to C$43.99, after earlier sliding 4.8 percent, the biggest intraday drop since May.
Canadian Imperial Bank of Commerce and National Bank of Canada reported earnings that beat the average analyst estimate. CIBC, Canada’s fifth-largest bank, gained 3.5 percent to C$82.46. National Bank, the country’s sixth-biggest lender, climbed 2.8 percent to C$73.77 after reporting profit excluding some items that beat the average estimate by 9.7 percent.
Canadian lenders are benefiting from lower loan losses as the country’s economic recovery accelerates and job creation rises. Canada’s six banks may report a 14 percent average increase in profit before one-time items for the quarter, said Andre-Philippe Hardy, an analyst at Royal Bank of Canada Capital Markets.
European Goldfields Ltd., a gold and lead producer, fell 22 percent, the most in the S&P/TSX, after Reuters reported that Greece delayed issuing a permit for two mines. The company said after trading was halted that it hadn’t been officially notified by Greece that there is any issue regarding the permitting process.
Northern Dynasty Minerals Ltd. soared 8.7 percent to C$18.96, after earlier reaching C$20.64, the biggest intraday gain since December 2010. The Vancouver-based explorer for gold, copper and molybdenum in Alaska said it received a positive preliminary assessment technical report for its Pebble Project in southwestern Alaska. Northern Dynasty is a possible takeover target, according to Adam P. Graf, an analyst at Dahlman Rose & Co.
Valeant Pharmaceuticals International Inc. advanced 2.9 percent to C$39.27. The maker of drugs for central nervous system disorders reported fourth-quarter earnings of 47 cents a share on an adjusted basis, beating the average analyst estimate by 1.3 percent, Bloomberg data show.
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