Canadian stocks fell to a six-month low as metal prices dropped a day after U.S. Federal Reserve Chairman Ben S. Bernanke called his country’s economic recovery “frustratingly slow.”
Barrick Gold Corp. (ABX), the world’s largest gold producer, declined 2 percent as the U.S. dollar rose. Contract driller Major Drilling Group International (MDI) Inc. tumbled 6.6 percent after reporting earnings that missed analyst estimates. Sino- Forest Corp., the forestry company that plunged after a short seller said it manipulated financial data, gained 21 percent after analysts at Royal Bank of Canada and Dundee Securities Ltd. expressed confidence in the company.
The Standard & Poor’s/TSX Composite Index retreated 99.13 points, or 0.8 percent, to 13,183.79, the lowest close since Dec. 16 and the first under the 200-day moving average since Aug. 25. The S&P/TSX has declined seven straight days, the longest streak of losses since June 2006.
“We continue to have poor numbers” from the U.S., said Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, which manages C$18 billion ($18 billion). “With 70 percent or 80 percent of exports that go to the U.S., if you have an economy that’s not going as well as we thought, it’s certainly a negative for the TSX.”
The stock benchmark has dropped 4.7 percent since May 30 as data on U.S. employment and manufacturing and Canadian building permits reflected slowing growth. The index closed at its lowest price relative to earnings since September.
Bernanke’s speech in Atlanta yesterday indicated a third round of asset purchases known as quantitative easing is unlikely, according to Sung Won Sohn, an economics professor at California State University-Channel Islands and former chief economist at Wells Fargo & Co.
The U.S. Dollar index extended its gains after Germany said industrial production dropped in April and German Finance Minister Wolfgang Schaeuble said bondholders must contribute a “substantial” share of a second aid package for Greece.
Gold futures slipped while silver slumped 1.1 percent. Barrick declined for a seventh day, losing 2 percent to C$43.36. Eldorado Gold Corp. (ELD), which mines in China and Turkey, decreased 2.5 percent to C$13.80 for an eighth-straight loss, the longest streak since 1997.
Silver Wheaton Corp. (SLW), Canada’s fourth-biggest precious- metals company by market value, retreated 3.5 percent to C$31.76. Silvercorp Metals Inc. (SVM), which produces the metal in China, sank 11 percent, the most in two years, to C$8.54.
Base-metals and coal producers fell as copper futures dropped. Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, declined 1.3 percent to C$46.63. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, lost 3.3 percent to C$122.05. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, decreased 2.3 percent to C$21.47 after closing at an eight-month low yesterday.
Major Drilling sank 6.6 percent to a six-month low of C$12.85 after its fourth-quarter profit trailed the average of six analyst estimates by 37 percent, excluding certain items.
Westport Innovations Inc. (WPT), which develops natural-gas engine technologies, plunged 15 percent, the most since February 2009, to C$19.36 after reporting a larger fourth-quarter loss than all eight analysts in a Bloomberg survey had estimated.
Uranium producers retreated after the New York Times said energy and nuclear officials from several countries pledged to enhance nuclear-safety rules.
Cameco Corp. (CCO), the world’s largest uranium producer, fell 2.4 percent to C$25.88. Uranium One Inc. (UUU), a mining company controlled by ARMZ Uranium Holding, slumped 6.9 percent to a nine-month low of C$3.09. Denison Mines Corp. (DML) dropped 9.2 percent to C$1.78.
Sino-Forest advanced 21 percent to C$4.92. In a note dated yesterday and made public today, Paul Quinn, a Royal Bank analyst, reiterated an “outperform” rating on the company.
Richard Kelertas, an analyst at Dundee Securities, said on a conference call yesterday that the assertions made by short seller Carson Block are unfounded.
The shares had plunged 78 percent from June 1 to yesterday. On June 2, Block, the founder of Hong Kong-based Muddy Waters Research, said Sino-Forest’s stated land holdings do not match Chinese city records and its disclosed production may be inaccurate. The company has denied the statements and published documents on its website it says support its published financial data.
BlackBerry maker Research In Motion Ltd. (RIM) lost 2.7 percent to C$35.93, a four-year low. Stephen Patel, an analyst at Gleacher & Co., cut his 12-month price estimate on RIM’s U.S.- traded share to $43 from $56, citing competition and “uncertainty over new handset launches” in a note to clients.
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