Canadian Stocks Rise as Bank of Montreal Beats Profit Estimates

Canadian stocks rose for a second day as lenders gained after Bank of Montreal reported earnings that beat the average analyst estimate and energy companies advanced with oil and natural gas.

Bank of Montreal, Canada’s fourth-largest lender by assets, increased 4.3 percent. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, climbed 6 percent as forecasts for hotter U.S. weather boosted gas futures. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, fell 5.3 percent as the metal dropped from a record.

The Standard & Poor’s/TSX Composite Index rose 269.97 points, or 2.2 percent, to 12,338.33, with financial shares accounting for 41 percent of the gain.

“Out of the gate, the first bank to report looks like a positive signal and above what people were anticipating,” Cameron Webster, managing partner at Sandstone Asset Management Inc. in Calgary, said in a telephone interview. The firm oversees about C$200 million ($202 million).

The index plunged 11 percent in the month ending yesterday as its bank stocks declined to an 11-month low and its energy stocks retreated to the lowest relative to forecast earnings since March 2009. Banks and energy companies make up 15 percent and 25 percent, respectively, of Canadian stocks by market value, according to Bloomberg data.

Bank of Montreal (BMO)

Bank of Montreal gained 4.3 percent, the most since August 2009, to C$59.80. Third-quarter profit increased 19 percent from a year earlier, boosted by higher investment-banking earnings, the Toronto-based lender said today. The profit surpassed the average estimate in a Bloomberg survey by 4.2 percent, excluding certain items.

Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 4.5 percent to C$51.43 after closing at a 13- month low yesterday. Royal Bank of Canada (RY), the country’s biggest bank, advanced 3.3 percent from a two-year low to C$50.06.

Natural gas rose 2 percent in New York after settling at a five-month low yesterday. Crude oil for October delivery advanced for a second day, gaining 1.2 percent, amid speculation the Federal Reserve will bolster efforts to stimulate the economy.

Energy Companies

Canadian Natural, which closed at the lowest since September 2009 yesterday, increased 6 percent to C$34.88. Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, climbed 4.4 percent to C$30.10. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, soared 7 percent, the most since May 2009, to C$21.88.

Gold futures fell 1.6 percent after touching an intraday record of $1,917.90 an ounce in New York. Dennis Gartman, the economist and editor of the Gartman letter, said in his report today he is selling gold because prices became “too frothy.”

Goldcorp dropped 5.3 percent to C$50.79 after closing at a record high yesterday. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, declined 3 percent to C$50.10. Extorre Gold Mines Ltd., which explores in Argentina, sank 9.7 percent to C$9.84.

Centerra Gold Inc. (CG), which mines in Kyrgyzstan and Mongolia, slumped 12 percent, the most since December 2008, to C$19.21 after Trevor Turnbull, an analyst at Scotiabank, cut his rating on the shares to “sector perform” from “sector outperform.” Turnbull said in a note to clients that the shares were near his one-year price estimate. Centerra soared 49 percent from June 16 to yesterday.

Potash Corp. Rises

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, advanced 6.1 percent to C$53.81 as corn and wheat rose for a third day. Agricultural futures have gained on speculation dry U.S. weather will limit yields. The portion of the U.S. corn crop in good or excellent condition fell to 57 percent last week from 60 percent a week earlier, according to a U.S. Agriculture Department report released yesterday.

Copper climbed after a preliminary reading indicated an HSBC Holdings Plc and Markit Economics index of Chinese manufacturing may rise. An index of S&P/TSX base-metals and coal producers gained after ending yesterday at the lowest close since September.

Teck, Ivanhoe Mines

Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, advanced 5.2 percent to C$39.54. Grande Cache Coal Corp. (GCE), which mines in Alberta, surged 9.7 percent to C$6.91.

Ivanhoe Mines Inc., which is building a copper and gold mine in Mongolia with Rio Tinto Group, soared 20 percent, the most since August 2009, to C$20.62.

Craig Miller, an analyst at Toronto-Dominion Bank (TD), boosted his rating on the shares to “speculative buy” from “hold.” In a note to clients, Miller cited recent the recent retreat in the shares’ price and progress at the Oyu Tolgoi mine in Mongolia.

Yoga-wear retailer Lululemon Athletica Inc. (LULU) rebounded 11 percent to C$50.02 after tumbling 22 percent in the previous six days. Imax Corp. (IMAX), the maker of giant-screen movie-projection systems, rallied 13 percent, the most since December 2008, to C$15.71 after a 23 percent plunge in the previous five sessions.

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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