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Canadian Stocks Fall as U.S. Dollar Gains, Energy Producers Slip

Canadian stocks fell for a fourth day, completing a weekly decline, as energy shares retreated after the U.S. dollar strengthened.

Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, decreased 1.5 percent as the U.S. dollar rose against 15 of 16 other major currencies. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, lost 1.3 percent as a gauge of financial stocks retreated for a third day. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer, advanced 1.5 percent as corn futures advanced.

The Standard & Poor’s/TSX Composite Index (SPTSX) slipped 12.26 points, or 0.1 percent, to 13,377.16, extending its weekly drop to 1.4 percent.

“Speculative money is being run out of the commodity markets,” said Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, which oversees C$250 million ($259 million).

The S&P/TSX retreated for a third week for the first time since January 2010. The index decreased 4.2 percent from April 21 through yesterday as oil, copper and silver each plunged at least 10 percent. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.

The U.S. dollar gained against the euro today after Reuters quoted European Central Bank President Jean-Claude Trichet as saying inflation was at a “peak.” The news service later corrected its story to say Trichet referred to a “hump” in inflation as he had in previous interviews.

Growth Issues

“The catalyst was the remarks that Trichet made this afternoon our time that suggested that growth was not going to be maybe what people had anticipated,” said Laura Wallace, senior manager for a team at Scotia Asset Management that oversees C$11 billion for private clients.

Canadian Natural fell for a fifth day, sliding 1.5 percent to C$39.41. Canadian Oil Sands Ltd. (COS), the largest owner of the Syncrude project, dropped 1.8 percent to C$30.98.

Petrominerales Ltd., which produces oil and gas in Colombia, slumped 3.9 percent to C$28.89 after Rafi Khouri, an analyst at Raymond James Financial Inc., cut his rating on the shares to “underperform” from “market perform.” In a note to clients, Khouri cited a decline in production.

Shares of the Bogota- and Calgary-based company have retreated nine straight days.

Banks, Insurers

Canadian financial shares declined along with U.S. banks amid concern about Europe’s debt crisis.

Manulife, the owner of John Hancock Financial Service Inc., lost 1.3 percent to C$17.25. Sun Life Financial Inc. (SLF), Canada’s third-largest insurer, decreased 0.8 percent to C$30.18. Brookfield Asset Management Inc. (BAM/A), Canada’s biggest real-estate company, slipped 0.7 percent to C$31.28.

Fertilizer producers climbed as corn futures rose on signs demand for U.S. exports is increasing. Potash Corp. gained 1.5 percent to C$49.92. Agrium Inc. (AGU), Canada’s second-biggest fertilizer producer, advanced 2.2 percent from a seven-month low to C$78.

Neo Material Technologies Inc., which makes rare-earth and zirconium products, sank 9.4 percent, the most since December 2008, to C$8.69 after saying it will sell $200 million in debt that can be converted into stock.

Sino-Forest Corp., the largest Canada-based forestry company by market value, tumbled 6.3 percent, the most since June, to C$19.20. In a phone interview, Sino-Forest Chief Financial Officer Dave Horsley said the shares were dropping on speculation the company was late filing first-quarter financial results, which he said was not the case.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

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

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