Canadian Stocks Advance as Gold Climbs on Demand for a Haven

Canadian stocks rose for the first time in five days as gold shares surged after debt concerns in the U.S. and Europe spurred demand for the metal as a protection of wealth.

Barrick Gold Corp. (ABX), the largest producer of the precious metal, gained 2.2 percent. Royal Bank of Canada (RY), the nation’s biggest lender, rose 1.1 percent after the Federal Reserve said it discussed monetary easing at its last meeting. Suncor Energy Inc. (SU), Canada’s biggest oil and gas producer, dropped 1.7 percent on concern slower growth will hurt fuel demand.

The Standard & Poor’s/TSX Composite Index rose 10.47 points, or 0.1 percent, the most since Nov. 11, to 11,795.19.

“I would call this a directionless market,” Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees about C$300 million ($289.6 million). “There are just a lot of uncertainties and unknowns. The politicians in Washington have large difficulty ahead of them and the budget problems will be with us for awhile, while Europe continues to relatively do nothing while bond yields rise.”

The S&P/TSX erased 3.6 percent from Nov. 15 through yesterday as the index had its longest streak of losses since June 8. The benchmark index of Canadian stocks (SPTSX) has slipped 12 percent this year and is set to underperform the S&P 500 for the first year since 2003. The Standard & Poor’s 500 Index (SPX), the U.S. equity benchmark, has dropped 5.5 percent this year.

European Rates

Spain’s three-month borrowing costs more than doubled at an auction today, sending two-year yields toward the highest level since 2003, while Belgium’s 10-year bond yields rose to more than 5 percent, adding to concern the euro crisis is spreading. Concern that leaders are running out of options to solve the crisis sent French and Italian yields higher.

U.S. gross domestic product climbed at a less-than-forecast 2 percent annual rate from July through September, down from a previous estimate of 2.5 percent, revised Commerce Department figures showed today in Washington.

Gold rebounded from the lowest in almost four weeks after mounting debt woes in the U.S. and Europe increased demand for gold as a safe haven.

Goldcorp Inc. (G), the world’s second-largest producer of the metal by market value, gained 1.9 percent to C$52.41. Barrick climbed 2.2 percent to C$50.98. Kinross Gold Corp. (K), Canada’s third-largest company in the industry by market value, climbed 5.8 percent to C$13.61.

Stimulus Talk

An index of banks in the S&P/TSX gained 0.3 percent after the Federal Reserve released minutes from their Nov. 1-2 meeting that showed some policy makers said the central bank should consider further economic stimulus.

Royal Bank of Canada rose 1.1 percent to C$44.93. Bank of Nova Scotia (BNS), the third-biggest lender, gained 0.3 percent to C$49.94.

Canadian energy companies fell as slowing U.S. economic growth and the European debt crisis increased concern that demand for fuel would slump, while a strengthening Canadian dollar threatened to crimp profits. The Canadian currency rose after a report showed retail sales in the country grew at the fastest pace in a year in September.

Suncor, Enbridge

Suncor slipped 1.7 percent to C$30.42. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, dropped 1 percent to C$36.10. Enbridge Inc. (ENB), Canada’s biggest pipeline company, lost 1.3 percent to C$35.76.

Smartphone maker Research In Motion Ltd. (RIM), which gets 39 percent of its revenue from the U.S., slid 2.9 percent to C$17.51. The shares had fallen 3.8 percent yesterday after two analysts cut profit estimates and the company reported a glitch that caused some customers to be unable to turn on their BlackBerry Bold devices.

Consumer staples companies also slipped as Saputo Inc. (SAP) fell 3 percent to C$38.92. Canada’s largest food producer was cut to “market perform” from “outperform” at Bank of Montreal (BMO), which cited a 12-month price estimate of C$45 a share.

Shoppers Drug Mart Corp. (SC), Canada’s largest drug store chain, slipped 1 percent to C$41.78. Metro Inc. (MRU/A), a Montreal- based grocery chain, erased 0.9 percent to C$50.15.

To contact the reporter on this story: Kaitlyn Kiernan in New York at kkiernan2@bloomberg.net.

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

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