Canadian Stocks Fall as Materials Drop on Stronger U.S. Dollar

Canadian stocks fell for the third time in four days, led by gold and energy producers, as the U.S. dollar rose on concern the European Central Bank may have to do more to quell the region’s debt crisis.

Barrick Gold Corp. (ABX), the world’s largest gold producer, dropped 1.1 percent as the U.S. Dollar Index gained for the first time in three days. Encana Corp. (ECA), Canada’s largest natural gas producer, declined 1.6 percent as the fuel dropped to a one- year low.

The Standard & Poor’s/TSX Composite Index slipped 52.66 points, or 0.4 percent, to 12,224.19.

“The market believes the ECB is going to have to provide more liquidity to prevent a longer recession than what is expected,” Andrew Pyle, an associate portfolio manager for Bank of Nova Scotia (BNS) in Peterborough, Ontario, said in a telephone interview. Pyle’s team oversees about C$200 million ($197 million). “If there’s a risk the euro is going to decline, the U.S. dollar’s going to pick up. That’s clearly a negative for commodities.”

The S&P/TSX decreased 1.9 percent in the previous two weeks, led by financial stocks, as bond yields in the most- heavily indebted euro-region countries climbed and Manulife Financial Corp. (MFC) and Sun Life Financial Inc. reported earnings that trailed analysts’ estimates.

Italy sold five-year bonds at the highest yield in more than 14 years today, on renewed concern over the debt crisis. The country’s Treasury sold the bonds to yield 6.29 percent, up from 5.32 percent at the previous auction Oct. 13.

Gold, Silver

Precious metals declined as the U.S. dollar gained. Barrick lost 1.1 percent to C$53.12. Kinross Gold Corp. (K), Canada’s third- largest company in the industry market value, slipped 1 percent to C$14.27. NovaGold Resources Inc. (NG), which is developing projects in Alaska and British Columbia, slumped 4 percent to C$8.97.

Alacer Gold Corp., which operates in Turkey, fell 4 percent to C$11.98 after saying Stuart Brown won’t become the company’s chief financial officer as the company announced Oct. 16. Brown had served as CFO and acting chief financial officer of Anglo American Plc’s De Beers unit.

Crude oil retreated from a three-month high on the New York Mercantile Exchange. Natural gas fell for a fourth day on forecasts for warmer-than-normal weather in the northern U.S.

Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, dropped 1.4 percent to C$37.37. Encana slipped 1.6 percent to C$20.26.

Estimates Raised

Natural gas and oil producer Trilogy Energy Corp. climbed 4.7 percent to a record C$36.97 after analyst at Stifel Financial Corp. and GMP Capital Inc. raised their 12-month share-price estimates. The company’s 2012 production forecast surpassed the estimates of Kurt Molnar, the Stifel analyst, according to a note to clients.

Yoho Resources Inc. (YO), which explores for oil and gas in British Columbia, soared 21 percent, the most since December 2008, to C$3.81 after disclosing a reserves estimate for its Nig property.

Ivanhoe Mines Ltd., which is developing Mongolia’s Oyu Tolgoi copper and gold mine with Rio Tinto Group, rallied 3.6 percent to C$21.49 after reporting a third-quarter profit. All five analysts in a Bloomberg survey had forecast a net loss.

Hathor Exploration Ltd. (HAT), which owns uranium properties in Saskatchewan, jumped 9 percent to a record C$4.87 after Cameco Corp. raised its hostile bid for the company to C$4.50 a share. Hathor agreed to be bought for C$4.15 a share by Rio Tinto Oct. 19.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, fell 0.9 percent to C$46.99 as corn and wheat dropped for a fourth day. Migao Corp. (MGO), which produces fertilizer in China, plunged 14 percent to C$3.18 after reporting earnings that missed all eight analyst estimates in a Bloomberg survey.

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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