Canadian Stocks Advance as U.S. Retail Sales Surpass Forecasts

Canadian stocks advanced the most in almost four weeks after the U.S. reported a smaller drop in retail sales than most economists had forecast.

Suncor Energy Inc. (SU), Canada’s biggest fuel producer, rose 2 percent as crude climbed from a four-week low. Bank of Nova Scotia (BNS), the country’s third-largest lender by assets, gained 1.4 percent after the U.S. Commerce Department said retail sales slipped 0.2 percent in May, less than 67 of 81 economists’ estimates in a Bloomberg survey. Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, increased 3 percent after Chinese factory production topped economists’ forecasts.

The Standard & Poor’s/TSX Composite Index rallied 158.1 points, or 1.2 percent, to 13,097.82 after closing at the lowest level since November yesterday.

“We’ve been bombarded with weak data for a while now, and we’re seeing two good data points in the same day in the U.S. and China,” said Mathieu Roy, a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick, which manages about C$1.5 billion ($1.5 billion). “That, coupled with a lot of selling for a while now, was enough to change moods a little bit.”

The S&P/TSX plunged 6.3 percent this month through yesterday, the most among 24 developed-market stock benchmarks, as economic data have reflected a slowing global recovery. The index has not ended a month with a decline that large since February 2009.

Retail Sales

Excluding autos, U.S. retail sales rose 0.3 percent last month, the Commerce Department said in Washington. Economists had forecast a gain of 0.2 percent, according to the median of 73 estimates in a Bloomberg survey.

S&P/TSX energy stocks rallied the most since May 18. Suncor advanced 2 percent to C$38.35. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, increased 2.1 percent to C$39.41. Oil sands developer BlackPearl Resources Inc. (PXX) climbed for the first time in two weeks, jumping 4.8 percent to C$6.55.

The S&P/TSX Financials Index, the largest part of the S&P/TSX Composite, gained from the lowest level since January.

Scotiabank advanced 1.4 percent to C$57.70. Bank of Montreal (BMO), Canada’s fourth-largest lender by assets, increased 0.9 percent to C$60.68. Manulife Financial Corp. (MFC), North America’s fourth-biggest insurer, rose 1.6 percent to C$16.16.

Industrial Production

Base-metals and coal producers climbed after China reported a 13.3 percent increase in industrial production for May, surpassing 16 of 21 economist forecasts in a Bloomberg survey. Copper futures gained the most in nearly three months.

Teck advanced 3 percent to C$46.29. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, rose 4.6 percent to C$123.19. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, rallied 5.4 percent to C$22.82.

Sherritt International Corp. (S), which produces coal and base metals, sank 5.7 percent to C$6.61 after raising cost estimates for the Ambatovy Project in Madagascar. Sherritt owns a 40 percent interest in the nickel and cobalt project.

Uranium One Inc. and Methanex Corp. (MX) climbed after Brian MacArthur, an analyst at UBS AG, boosted his ratings on the companies to “buy” from “neutral,” citing recent share-price declines in notes to clients.

Uranium One, Methanex

Uranium One, a mining company controlled by Moscow-based ARMZ Uranium Holding, surged 7.7 percent to C$2.81 after closing at an 11-month low yesterday, ending an 11-day streak of losses. Methanex, the world’s largest methanol producer, increased 4.7 percent to C$29.16.

An index of S&P/TSX gold stocks advanced from a 10-month low as inflation quickened in China and India.

Goldcorp Inc. (G), the world’s second-largest gold producer by market value, rose 1.3 percent to C$45.60. Eldorado Gold Corp. (ELD), which mines in China and Turkey, climbed 1.8 percent to C$13.89. First Majestic Silver Corp. (FR), which mines in Mexico, surged 4.5 percent to C$16.81 as that metal gained 1.9 percent.

China Gold International Resources Corp. rebounded 8.7 percent, the most in 11 months, to C$3.77 after tumbling 18 percent yesterday. The gold producer said production at its Chang Shan mine nearly doubled in April and May from a year earlier.

Sino-Forest Corp. (TRE), the forestry company battling a short seller’s assertions of financial manipulation, fell 33 percent to a five-year low of C$3.36 after reporting first-quarter earnings that trailed the average of six analyst estimates by 39 percent, excluding certain items.

Tree acquisitions will slow as Sino-Forest devotes resources to its investigation of the assertions made by Carson Block of Muddy Waters LLC, the company said.

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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