Canadian Stocks Rise as UBS, UPS, Ford Beat Earnings Forecasts
Canadian stocks rose, led by railroads and insurers, after companies including UBS AG, United Parcel Service Inc. and Ford Motor Co. beat analysts’ profit estimates.
Canadian National Railroad Co., the country’s biggest railroad, advanced 1.2 percent before the release of its first- quarter financial results. BlackBerry maker Research In Motion Ltd. (RIM) gained 3.1 percent after an analyst at Royal Bank of Canada (RY) said the company’s PlayBook tablet computer is selling more quickly than some had forecast. Silver Wheaton Corp. (SLW), Canada’s fourth-largest precious-metals company by market value, lost 4.8 percent as silver retreated for the first time in nine days.
The Standard & Poor’s/TSX Composite Index increased 1.78 points, or less than 0.1 percent, to 13,909.10. Among S&P/TSX companies, 128 advanced, 117 dropped and three were unchanged.
“It’s a fairly credible rally,” said Bob Decker, a money manager at Aurion Capital Management in Toronto, which oversees C$5.7 billion ($6 billion). “You’ve got relatively good value, especially as compared to fixed-income alternatives, and you’ve got a very benign interest rate environment. That’s supportive for equity valuations and a steady recovery in the economy.”
Since the current earnings-reporting season began April 11, 122 of 154 S&P 500 companies and six of 12 S&P/TSX companies that have reported financial results have surpassed their average analyst estimate. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.
CN and Canadian Pacific Railway Ltd. (CP) gained as North American transportation stocks advanced after Ryder System Inc. and UPS boosted their full-year profit forecasts.
CN climbed for a fifth day, increasing 1.2 percent to C$71. The company is scheduled to release first-quarter earnings at 4 p.m. in Montreal. CP rose 2.2 percent to C$61.67.
RIM rose 3.1 percent to C$52.60 after Mike Abramsky, an analyst at Royal Bank, said 14 percent of the Best Buy Co. stores Royal Bank has checked have sold out of the version of the PlayBook with 16 gigabytes of memory. RIM shares plunged 26 percent from Feb. 18 to yesterday.
S&P/TSX financial companies advanced after companies including UBS, Switzerland’s largest bank, and Ford, the No. 2 U.S. automaker, beat analysts’ profit forecasts.
Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, gained 1.1 percent to C$17. Sun Life Financial Inc. (SLF), Canada’s third-biggest insurance company, increased 2 percent to C$30.85. Brookfield Asset Management Inc. (BAM/A), the country’s largest real estate company, climbed 1.4 percent to C$31.66.
Gold lost 0.4 percent from a record settlement to $1,503.50 an ounce on speculation the U.S. Federal Reserve will take steps to prevent inflation. Silver sank 4.4 percent, the most since March 15.
Silver Wheaton decreased 4.8 percent to C$37.32. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, retreated 1.2 percent to C$51.90. First Majestic Silver Corp. (FR), which mines in Mexico, sank 7.5 percent to C$19.61, extending its two-day slide to 12 percent.
Barrick Gold Corp. (ABX), the world’s biggest gold-mining company, fell 3.5 percent to C$47.75 after David Haughton, an analyst at Bank of Montreal, cut his rating on the shares to “market perform” from “outperform.” In a note to clients, Haughton cited Barrick’s agreement to buy Equinox Minerals Ltd. (EQN), saying copper-mining companies trade for less relative to earnings than do gold-mining companies.
Yesterday, Barrick slumped 6.7 percent after saying it will buy Equinox for C$8.15 a share.
Equinox dropped 3.1 percent to C$8.11 after surging 11 percent to a record yesterday. Minmetals, which had bid C$7 a share for Equinox, said Barrick’s offer “is above our most optimistic assessment of value,” according to a statement from Chief Executive Officer Andrew Michelmore.
First Quantum Minerals Ltd. (FM), which, like Equinox, mines copper in Africa, slumped 2 percent to C$133.75 after rallying 5 percent yesterday.
Colossus Minerals Inc. (CSI), which explores for precious metals in Brazil, surged 6.9 percent to C$8.81 after reporting drilling results. In a note to clients, Ron Stewart, an analyst at Dundee Securities Ltd., called the results “nothing short of extraordinary.”
Lumber producers West Fraser Timber Co. and Canfor Corp. rebounded after sinking 12 percent and 18 percent, respectively, this month through yesterday. West Fraser, Canada’s largest lumber producer, jumped 4.5 percent to C$55.27. Canfor rose 5.5 percent to C$12.87.
To contact the reporter on this story: Matt Walcoff in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Baker at email@example.com