Canadian Stocks Gain as U.S. Earnings Top Forecasts, Oil Rises
Canadian stocks rose for a second day as companies including Intel Corp. and Freeport-McMoRan Copper & Gold Inc. topped analysts’ earnings forecasts and oil and metals gained on a weaker U.S. dollar.
Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, advanced 2.7 percent after the U.S. government reported a decline in crude inventories. Toronto-Dominion Bank (TD) increased 1.5 percent after at least 20 S&P 500 companies reported profit that surpassed their average analyst estimate. Barrick Gold Corp. (ABX), the largest producer of the metal, climbed 1 percent as the U.S. dollar retreated.
The Standard & Poor’s/TSX Composite Index gained 160.65 points, or 1.2 percent, to 13,897.48, the biggest gain in four weeks.
“It’s an earnings- and growth-driven rally today,” said Blair Falconer, who manages C$800 million ($839 million) at HSBC Securities (Canada) Inc. in Toronto. “The scare stories about growth, whether it’s the issues with European debt or the issues with inflation, all those risk factors really seem to have abated in the last couple of days.”
The S&P/TSX had fallen 2.7 percent this month before the market opened, more than every other developed-market benchmark gauge except Greece’s. Banks and energy companies dropped after the International Monetary Fund cut its growth forecast for the U.S. and Standard & Poor’s lowered its outlook on U.S. sovereign credit ratings.
Intel, the world’s biggest chipmaker, forecast second- quarter sales that may top analysts’ estimates. Oil and metals rallied as the U.S. dollar declined to a 16-month low against a basket of world currencies.
Crude increased 2.9 percent, the most in a month, in New York. U.S. supplies fell by 0.6 percent last week. Eleven of 13 analysts in a Bloomberg survey had forecast an increase.
Suncor climbed 2.7 percent to C$42.51. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, rose 2.4 percent to C$44.25.
Petrominerales Ltd. (PMG), which produces oil and gas in Colombia, rallied 5.8 percent to C$35.96 after Natalia Agudelo, an analyst at Celfin Capital, began coverage of the company with a “buy” rating. In a note to clients, Agudelo cited the company’s “aggressive exploration program” and “proven and experienced” management.
The S&P/TSX Financials Index gained the most in three weeks. TD advanced 1.5 percent to C$82.30. Bank of Nova Scotia (BNS), Canada’s third-largest lender by assets, increased 1.3 percent to C$57.21. Manulife Financial Corp. (MFC), North America’s fourth- biggest insurer, climbed 1 percent to C$16.68.
Precious-metals producers advanced as gold touched a record $1,506.50 an ounce in New York.
Barrick gained 1 percent to C$52.30. Franco-Nevada Corp., which owns precious-metals and oil and gas royalties, increased 3.1 percent to a record C$37.49. Semafo Inc. (SMF), which produces gold in Africa, rallied 4.4 percent to C$8.24.
North American Palladium Ltd. (PDL), which mines in Ontario, jumped 9.2 percent from a five-month low to C$5.93 as that metal surged.
Fifteen of 16 S&P/TSX base-metals and coal producers gained after Freeport, the largest publicly traded copper producer, raised its 2011 sales forecast. Copper advanced the most in four weeks.
“Miners in Canada are starting to forecast much-stronger revenue and earnings growth for the rest of 2011,” Falconer said.
Teck, First Quantum
Teck Resources Ltd. (TCK/B), the country’s largest base-metals and coal producer, increased 2.1 percent to C$52.68. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, climbed 6.7 percent to C$128.60. Copper Fox Metals Inc. (CUU), which owns a base- and precious-metals project in British Columbia, surged 15 percent to C$2.65.
Quadra FNX Mining Ltd. (QUX), which mines copper in the U.S., Canada and Chile, soared 13 percent, the most since July 2009, to C$15.59 after analysts at Royal Bank of Canada and TD raised their ratings on the shares to “outperform” and “buy,” respectively.
In a note to clients, Greg Barnes, an analyst at TD, cited a higher net asset value estimate for Quadra FNX’s Victoria project in Ontario.
Magna International Inc. (MG), Canada’s largest auto-parts maker, rose 5.6 percent to C$46.44. Herbert Demel, an executive vice president, told a Shanghai auto forum that the company forecasts emerging markets will account for 15 percent of sales by 2013, up from 10 percent now.
MagIndustries Corp. (MAA), which is developing a potash mine in the Republic of Congo, surged 50 percent, the most in 24 months, to 22.5 Canadian cents after agreeing to be bought by Shanghai- based Evergreen Industries Group for 25 Canadian cents a share in cash.
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