Canadian Energy, Financial Stocks Gain as Material Shares Slump

Canadian stocks swung between gains and losses as energy shares recovered from earlier declines along with crude-oil prices, and metal producers fell. Financial companies advanced.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, rose 0.6 percent as crude oil advanced 0.6 percent on concerns that flooding of the Mississippi River will disrupt fuel output. Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, lost 1.8 percent as the U.S. dollar strengthened. North American Palladium Inc., a precious-metal producer in Ontario, slid 23 percent after reporting a first-quarter loss.

The Standard & Poor’s/TSX Composite Index, which rallied the past two days, dropped 25.16 points, or 0.2 percent, to 13,651.97 at 2:22 p.m. in Toronto after falling as much as 0.3 percent.

The S&P/TSX lost 3.1 percent this quarter through yesterday, more than all other benchmark stock indexes for developed markets except the Athens Stock Exchange General Index. Energy and materials stocks retreated as oil declined 3.9 percent and copper fell 6.8 percent. Those industries make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

Oil fell as much as 2.4 percent early in the day after CME Group Inc. increased the amount of money traders must hold as collateral for their crude, gasoline and heating oil transactions, effective after the close of business today. The Energy Department will probably report tomorrow that supplies rose last week, according to a Bloomberg News survey.

Suncor Energy

Suncor Energy rose 0.6 percent to C$40.85. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, lost 1.1 percent to C$41.66.

Goldcorp Inc. (G), the world’s second-biggest gold producer by market value, declined 0.6 percent to C$48.04. Teck Resources dropped 1.8 percent to C$48.07. North American Palladium lost 23 percent to C$4.22 after reporting a first-quarter loss of 6 Canadian cents a share, excluding certain items. Analysts, on average, forecast a profit of 1 Canadian cent a share, according to a Bloomberg survey.

Silver Wheaton Corp. (SLW), Canada’s fourth-largest precious- metals producer by market value, rose 0.9 percent to C$35.80 after the stock was raised to “buy” from “hold” by Craig West, an equity analyst at GMP.

Bank Stocks

Toronto-Dominion Bank (TD), Canada’s second-largest lender, rose 0.5 percent to C$82.62. Bank of Nova Scotia (BNS), the nation’s third- biggest lender, rose 0.5 percent to C$57.96. Canadian banks rank high on the list of the world’s strongest banks, according to data compiled by Bloomberg. National Bank of Canada (NA), which rose 0.7 percent to C$78.95, was ranked at No. 3, and the country has five banks in the top 20.

Health-care stocks climbed, with pharmacy-benefits manager SXC Health Solutions Corp. (SXC) rose 1.2 percent to C$58.66. Financial, technology and health-care stocks offer “value,” Bill Miller, the chairman and chief investment officer of Legg Mason Capital Management Inc., wrote in the Financial Times today. He said valuations in those industries have been more expensive 90 percent of the time during about the past 60 years.

S&P 500 financial companies are currently trading at 13.6 times reported operating earnings, while technology stocks are trading at 15.6 times and health-care shares are selling at a multiple of 13.2.

George Weston Ltd. (WN), the majority owner of Loblaw Cos., Canada’s biggest grocery chain, fell 1.3 percent to C$70.04 after reporting first-quarter sales that fell 0.8 percent short of analyst estimates, according to Bloomberg data.

To contact the reporters on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net; Jeff Sutherland in New York at jsutherlan13@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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