Canadian Stocks Advance as Metals Rebound; Nexen Shares Retreat
Canadian stocks rose for a second day, led by raw-materials and energy producers, as an index of commodities rebounded from its biggest weekly drop since 2008.
Goldcorp Inc. (G), the world’s second-biggest gold producer by market value, increased 2.2 percent as precious metals rallied. Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, climbed 1 percent as oil gained the most in two months. Forzani Group Ltd. (FGL), Canada’s largest sporting-goods retailer, soared 49 percent after agreeing to be bought by Canadian Tire Corp.
The Standard & Poor’s/TSX Composite Index gained 110.53 points, or 0.8 percent, to 13,677.13.
“Things got overdone in the short term,” said Doug Davis, vice chairman of Davis-Rea Ltd. in Toronto, which manages C$450 million ($465 million). “The economy is still recovering, both in Canada and the U.S.”
The S&P/TSX fell 2.7 percent last week as the Thomson Reuters/Jefferies CRB Commodity Price Index plunged 9 percent. Precious metals dropped as CME Group Inc., the owner of the Comex exchange, raised the amount of cash that must be deposited when borrowing from brokers to trade silver futures. Fuels declined after the U.S. reported a decline in gasoline consumption and increase in natural gas inventories.
Producers of precious metals gained today as investors speculated last week’s 4.2 percent retreat in gold and 27 percent tumble in silver were overdone.
Barrick Gold Corp. (ABX), the world’s largest producer of the metal, advanced 1.2 percent to C$45.96. Goldcorp increased 2.2 percent to C$48.42. Silver Wheaton Corp. (SLW), Canada’s fourth- biggest precious-metals company by market value, climbed 2.4 percent to C$35.47. First Majestic Silver Corp. (FR), which mines in Mexico, jumped 8.1 percent to C$19.02.
Crude oil, which sank 15 percent last week, rose 5.5 percent today after Germany said exports advanced to a record last month.
Canadian Oil Sands Ltd., the largest owner of the Syncrude project, increased 3.2 percent to C$31.85. Suncor advanced 1 percent to C$40.66. Oilfield-services company Flint Energy Services Ltd. (FES) soared 12 percent, the most since June 2009, to C$15.47 before the release of its first quarter financial results.
Contract driller Ensign Energy Services Inc. (ESI) climbed 4 percent to C$17.71 after reporting first-quarter earnings that beat the average of 10 analyst estimates by 36 percent, excluding certain items.
Nexen Inc. (NXY), an oil and gas producer with operations on five continents, declined 2.7 percent to C$23.14. The company said it has suspended operations in Yemen due to a strike and that its North Sea Buzzard oil field is operating at reduced rates due to problems with the platform’s cooling system.
Industrial-metals producers rose as copper rallied from a five-month low.
First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, gained 3.1 percent to C$127.50. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, advanced 5.7 percent to C$24.67. Taseko Mines Ltd. (TKO), which produces copper in British Columbia, jumped 5.2 percent to C$4.90.
Molybdenum Producer Thompson Creek Metals Co. sank 5.2 percent to a seven-month low of C$10.30 after cutting its 2011 production forecast.
Copper Fox Metals Inc. (CUU), which is developing a base- and precious-metals project in British Columbia, jumped 18 percent to C$2.38. On May 6, two federal-government agencies said a proposed power line to the region “is not likely to cause significant adverse environmental effects.”
Forzani surged a record 49 percent to C$26.25 after agreeing to be bought by Canadian Tire, the country’s largest general-goods retailer, for C$26.50 a share in cash. Canadian Tire rose 2.7 percent to C$60.19.
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 1.6 percent to C$52.62 as corn and wheat rose. Viterra Inc., Canada’s biggest grain handler, climbed 3.8 percent to C$11.50.
Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, rose 1.4 percent to C$17.71 after surging 5.1 percent May 6. On May 5, the company reported first-quarter profit that topped the average analyst estimate by 56 percent, excluding certain items.
BlackBerry maker Research In Motion Ltd. (RIM) fell 2.6 percent from a four-year low to C$43.39 after T. Michael Walkley, an analyst at Canaccord Financial Inc., reduced his 12-month price estimate on RIM’s U.S.-traded shares to $49 from $61. In a note to clients, Walkley cited RIM’s market-share losses to Apple Inc.’s iPhone and smartphones using Google Inc.’s Android operating system.
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