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Canadian Banks, Energy Shares Fall as U.S. Home Sales Decline

Canadian bank and energy shares fell after data on U.S. home sales and Philadelphia-region manufacturing trailed most economists’ forecasts and natural gas futures retreated.

Royal Bank of Canada (RY), the country’s largest lender by assets, slipped 0.6 percent after the National Association of Realtors said U.S. sales of existing homes declined last month. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, decreased 0.8 percent after the U.S. reported higher natural gas inventories than most analysts forecast. Canadian National Railway Co. (CNR) rose 1.5 percent as North American transportation shares gained on lower oil prices.

The Standard & Poor’s/TSX Composite Index slipped 1.64 point, or less than 0.1 percent, to 13,605.61 at 12:32 p.m. in Toronto.

“The home-sales number for the States and the Philly Fed index have dealt a reality check to the market,” said Andrew Pyle, who helps manage C$200 million ($206 million) as an associate portfolio manager for Scotia McLeod in Peterborough, Ontario. “It seems things are not as rosy as some had believed.”

The S&P/TSX rose 1.7 percent this week through yesterday as investors took advantage of the lowest share prices relative to earnings in six months and oil, copper and agricultural commodities rebounded. The stock benchmark remained down 3.6 percent for the quarter as of yesterday’s close.

Home Sales

U.S. existing-home sales fell 0.8 percent last month, the National Association of Realtors said today in Washington. All but three of 75 economists in a Bloomberg survey had forecast a gain.

The Federal Reserve Bank of Philadelphia’s gauge of regional manufacturing increased at the slowest pace in seven months. The reading trailed all 59 economist forecasts in a Bloomberg survey.

Natural gas futures dropped to the lowest level in a month after the U.S. Energy Department said supplies increased by 92 billion cubic feet last week. Crude oil declined as much as 1.9 percent.

Canadian Natural slipped 0.8 percent to C$40.42. Talisman Energy Inc. (TLM), an oil and gas producer with operations in North America, the North Sea and Indonesia, lost 1.4 percent to C$20.26. Daylight Energy Ltd. (DAY), which produces oil and gas in Canada, decreased 3.4 percent to C$9.85 after cutting its production forecast.

CN, Canada’s largest railroad, gained 1.5 percent to C$74.74 as oil prices slid. Trucking company TransForce Inc. (TFI) advanced 1.6 percent to a four-year high of C$15.85.

Banks Retreat

The S&P/TSX Banks Index retreated for the first time in a week. Royal Bank fell 0.6 percent to C$59.46. Canadian Imperial Bank of Commerce, the country’s fifth-largest lender by assets, dropped 0.5 percent to C$83.58. Manulife Financial Corp. (MFC), North America’s fourth-biggest insurer, slipped 0.4 percent to C$17.39.

Base-metals and coal producers declined after Hong Kong Monetary Authority said it may ask some banks to set aside more reserves, raising speculation China will take more steps to curb inflation. Copper retreated for the first time in six days.

Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, lost 1 percent to C$48.20. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, decreased 1.3 percent to C$133.30.

Fertilizer Producers

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, retreated 1.1 percent to C$52.91 as wheat futures fluctuated after surging 12 percent this week through yesterday. Agrium Inc. (AGU), Canada’s second-biggest fertilizer producer, slipped 1 percent to C$78.84.

BlackBerry maker Research In Motion Ltd. (RIM) fell 2.5 percent to C$43.01 after market-research firm Gartner Inc. said its share of the global smartphone market fell to 13 percent last quarter from 20 percent a year earlier.

Electronic-whiteboard maker Smart Technologies Inc. (SMA) sank 23 percent to C$7.25, the lowest level since its July initial public offering, after saying it lost 2 cents a share in the fourth quarter, excluding certain items. All eight analysts in a Bloomberg survey had forecast a profit. Analysts at Cowen Group Inc. and Piper Jaffray Cos. cut their ratings on the company to “neutral.”

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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