Canadian Stocks Rise as Precious Metals Climb; Celestica Jumps

Canadian stocks rose for a fourth day, extending a weekly gain, as gold advanced after Fitch Ratings said a new bailout of Greece will be considered a “restricted default.”

Goldcorp Inc. (G), the world’s second-largest producer of the metal by market value, increased 2.6 percent as the euro fell against 13 of 16 other major currencies, boosting precious- metals prices. Contract manufacturer Celestica Inc. (CLS) soared 11 percent after beating analysts’ profit estimates. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, rallied 2 percent on concern a flood at a mine in Belarus may tighten world potash supplies.

The Standard & Poor’s/TSX Composite Index climbed 60.33 points, or 0.5 percent, to 13,494.63 to complete a 1.5 percent weekly increase.

“Fitch Ratings, what they’ve said is the role of the private sector in the Greek bailout plan will really constitute a bit of a restricted default,” Luciano Orengo, who manages C$1.6 billion ($1.7 billion) at Manulife Financial Corp., said in a telephone interview. “People didn’t like the wording of that. That’s why you’re seeing a rise in gold prices again.”

The Canadian stock benchmark advanced 1.4 percent in the previous three sessions as banks and energy producers climbed on speculation European leaders would reach an agreement to contain the continent’s debt crisis. Euro-area leaders yesterday announced 159 billion euros ($229 billion) in new aid for Greece and an expansion of the role of their 440-billion-euro rescue fund.

Debt Concern

Gold increased 0.9 percent and silver 3 percent as the euro fell on concern the agreement won’t stop the crisis’s spread.

Goldcorp climbed 2.6 percent to C$51.47. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, rose 1.6 percent to C$47.62. Silver Wheaton Corp. (SLW), Canada’s fourth- largest precious-metals company by market value, gained 3.6 percent to C$37.45.

Lake Shore Gold Corp. (LSG), which operates in Ontario, rebounded 15 percent from a 25-month low to C$2.39 after Marc Johnson, an analyst at M Partners Inc., said in a note to clients the company “has been unfairly punished by the market” after cutting its 2011 production forecast on July 19. The shares sank 39 percent in the following three days.

First Uranium

Gold and uranium producer First Uranium Corp. (FIU) soared a record 53 percent to 59 Canadian cents after AngloGold Ashanti Ltd. agreed to buy a 20 percent stake in the company for 60 Canadian cents a share.

Uranium One Inc. (UUU), a mining company controlled by Moscow- based ARMZ Uranium Holding, advanced 8.3 percent to C$3.51. Uranium producer Denison Mines Corp. (DML) increased 10 percent to C$2.06.

Celestica and Precision Drilling Corp. (PD) surged after reporting second-quarter earnings that beat their average analyst estimates in Bloomberg surveys.

Celestica, which makes electronics for companies including Research In Motion Ltd. and Cisco Systems Inc., soared 11 percent to C$8.89 after surpassing the average of analyst estimates by 12 percent, excluding certain items. The shares haven’t jumped that much in a day since June 2009.

Precision Drilling, Canada’s largest drilling company by market value, advanced for a ninth day, rallying 8.5 percent to C$16.69. The company’s profit topped the average estimate by 18 percent, excluding certain items. Its streak of gains is the longest since August 2006.

Oil Rises

Other energy companies advanced as crude oil climbed for a fourth day to a six-week high. TransCanada Corp. (TRP), the owner of the country’s largest pipeline system, increased 1.4 percent to C$40.61. Talisman Energy Inc. (TLM), which operates in North America, the North Sea and Indonesia, rose 2.1 percent to C$19.58.

Fertilizer producers gained after Joel Jackson, an analyst at Bank of Montreal, said in a note to clients that flooding at Belaruskali’s mine “could be more serious relative to initial details that surfaced a few weeks back.”

Potash Corp. advanced 2 percent to C$58.50. Agrium Inc. (AGU), Canada’s second-largest fertilizer producer, increased 1.3 percent to C$87.92.

West Fraser Timber Co., Canada’s largest forestry company, tumbled 10 percent, the most since 2008, to C$45.79 after its second-quarter earnings trailed the average of analyst estimates in a Bloomberg survey by 59 percent, excluding certain items.

Sino-Forest Corp. (TRE), the forestry operator fighting a short seller’s assertions of financial manipulation, rose 11 percent to C$5.19 to extend its four-day climb to 47 percent. On July 20, New Zealand billionaire Richard Chandler disclosed he had increased his stake in the company to 11 percent the previous day.

To contact the reporter on this story: Matt Walcoff at Mwalcoff1@bloomberg.net

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

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