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Canadian Stocks Advance After U.S. Unemployment Claims Decline

Canadian stocks advanced for a third day as financial companies rose after first-time unemployment claims in the U.S. fell to the lowest since April 2008.

Royal Bank of Canada (RY), the country’s largest lender by assets, advanced 3.9 percent. Goldcorp Inc., the world’s second- biggest gold producer by market value, lost 1.3 percent as the metal retreated. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by value, rallied 5.2 percent after an analyst at Royal Bank boosted his rating on the shares.

The Standard & Poor’s/TSX Composite Index climbed 122.95 points, or 1.1 percent, to 11,876.48.

“In North America, the economic data does look relatively good,” Daniel L. Bain, chief investment officer of Thornmark Asset Management Inc. in Toronto, said in a telephone interview. Bain oversees about C$400 million ($391 million). “It’s very encouraging that we will continue to see weak but sustainable growth.”

The S&P/TSX has fallen 2.7 percent this month, led by gold producers, as European leaders failed to agree on a comprehensive solution to the continent’s debt crisis and the U.S. Dollar Index climbed. Canada’s benchmark stock gauge is set for its ninth monthly decline in 2011. The index last dropped nine months in a year in 1981.

U.S. initial jobless claims fell to 364,000 last week from a revised 368,000 the previous week, the Labor Department said today in Washington. Economists had forecast an increase to 380,000, according to the median estimate in a Bloomberg survey.

Confidence Index

The Thomson Reuters/University of Michigan final index of U.S. consumer confidence, released today, rose more this month than 62 of 64 economists in a Bloomberg survey had forecast.

The S&P/TSX Financials Index climbed for a third day as all eight of its banks rose. Royal Bank gained 3.9 percent to C$50.92. Toronto-Dominion Bank (TD), its biggest domestic rival, advanced 1.7 percent to C$74.61. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, increased 3.2 percent to C$10.68.

Dundee Capital Markets Inc., the parent of Dundee Securities Ltd., soared 34 percent to C$1.11 after agreeing to be bought by its biggest shareholder, Dundee Corp. (DC/A) The buyer will pay C$1.125 a share for the shares of DCM it does not already own.

Energy Producers

Crude futures advanced above $99 a barrel in New York. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, gained 2.8 percent to C$37.79. Suncor Energy Inc. (SU), Canada’s largest company in the industry, increased 2.9 percent to C$28.90. Petrobank Energy and Resources Ltd., the majority owner of PetroBakken Energy Ltd., rallied 6.8 percent to C$10.36.

NuVista Energy Ltd. (NVA), which operates in western Canada, surged a record 16 percent to C$5.09 after reporting drilling results it called “positive.”

Winstar Resources Ltd., which produces oil and gas in Tunisia, soared 23 percent, the most in a year, to C$3.70 after reporting record production and sales for November and December.

Precious-metals producers dropped as gold futures declined for a second day on the Comex in New York. Goldcorp slipped 1.3 percent to C$45.48.

Barrick Gold Corp. (ABX), the world’s biggest gold producer, lost 1.1 percent to C$46.95. Aurizon Mines Ltd. (ARZ), which produces gold in Quebec, decreased 7.8 percent to C$5.

‘Cash Cow’

Potash Corp. climbed 5.2 percent to C$43.51 after Adam Schatzker, an analyst at Royal Bank, raised his rating (POT) on the shares to “outperform” from “sector perform.” The company “will soon become a ‘cash cow’ as it takes advantage of healthy potash prices with growing sales volumes,” Schatzker said in a note to clients.

Vladislav Baumgertner, the chief executive officer of OAO Uralkali, Russia’s largest fertilizer maker, told Bloomberg Television yesterday his company will produce about 7 percent less potash than planned in 2012 to support prices.

Base-metals and coal producers gained as copper futures advanced for a third day. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi project in Mongolia, increased 7.9 percent to C$18.64. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, climbed 3.8 percent to C$19.52. Teck Resources Ltd. (TCK/B), the country’s biggest company in the industry, rose 2.4 percent to C$36.35.

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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