Canadian stocks rose for the first time in three days as gold and silver gained on concern the U.S. economic recovery is slowing.
Goldcorp Inc. (G), the world’s second-biggest gold producer by market value, climbed 4.8 percent as futures rallied for a sixth day in New York. BCE Inc. (BCE), Canada’s biggest phone company, advanced 1.6 percent as telecommunications companies jumped. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 1.1 percent as wheat and corn jumped to two-month highs.
The Standard & Poor’s/TSX Composite Index gained 60.89 points, or 0.5 percent, to 12,068.36.
“There’s a lot of worry going on in the world, and one of the true safe havens is gold,” Robert Cohen, a resources-fund manager at Bank of Nova Scotia (BNS)’s Goodman & Co. Investment Counsel unit, said in a telephone interview. Cohen oversees C$1.8 million ($1.8 million). “There is a very high level of fear in stocks.”
The index has dropped less this month than all other major developed-market stock benchmarks except New Zealand’s as gold futures have surged to a record. S&P/TSX gold stocks have soared 15 percent this month while energy companies have plunged 13 percent and financial stocks fell 7.6 percent.
Economists at Goldman Sachs Group Inc. cut their forecast of 2011 U.S. gross domestic product growth to 1.5 percent from 1.7 percent in a note published Aug. 19. Credit Suisse Group AG and JPMorgan Chase & Co. also lowered their growth estimates for the U.S. last week.
The S&P/TSX Gold Index jumped to the highest level since December as gold and silver futures each rose 2.1 percent.
Goldcorp gained 4.8 percent to a record C$53.65. Barrick Gold Corp. (ABX), the world’s largest producer, advanced 2.6 percent to C$51.64. Silver Wheaton Corp. (SLW), Canada’s fourth-biggest precious-metals company by market value, increased 4.8 percent to C$39.88. Silver Standard Resources Inc. (SSO), which mines in Latin America, soared 9.1 percent, the most since December 2009, to C$27.47.
An index of S&P/TSX telecommunications stocks climbed 1.3 percent to extend its 2011 surge to 10 percent. The shares have gained as investors seek higher-yielding assets with bond yields near record lows. The index has a dividend yield of 4.6 percent, compared with 2.8 percent for the S&P/TSX Composite Index.
BCE rose 1.6 percent to C$38.84. Rogers Communications Inc. (RCI/B), Canada’s largest wireless carrier, advanced 1.5 percent to C$37.01. Telus Corp. (T), the third-biggest phone company, increased 1 percent to C$52.12.
Potash Corp. climbed 1.1 percent to C$50.72 as corn and wheat futures gained on speculation dry weather in the U.S. will cut yields.
Also today, Ben Isaacson, an analyst at Scotiabank, increased his rating on Potash Corp. shares to “sector outperform” from “sector perform.” In a note to clients, Isaacson cited the shares’ underperformance relative to Potash Corp.’s peers. The company’s U.S.-traded shares sank 18 percent from July 25 to Aug. 19, compared with 17 percent for Agrium Inc.’s U.S. shares and 14 percent for Mosaic Co.
The S&P/TSX Banks Index dropped after sinking 3.4 percent, the most in two years, on Aug. 19. Royal Bank declined 1 percent to C$48.48. Scotiabank, Canada’s third-largest lender by assets, slipped 2 percent to a one-year low of C$49.23. Canadian Imperial Bank of Commerce, the country’s No. 5 lender, lost 1.2 percent to C$68.60.
First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, sank 5.4 percent to C$20.06 as copper decreased 0.7 percent. Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, slipped 1 percent to an 11- month low of C$37.57. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, retreated 4.8 percent to C$17.12 to extend its August plunge to 32 percent.
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