Canadian stocks fell for the first time in five days, led by banks, as talks between European finance ministers and holders of Greek debt reached a stalemate.
Toronto-Dominion Bank (TD), the country’s second-largest lender by assets, declined 1.1 percent. Canadian National Railway Co. (CNR), the country’s largest railroad, dropped 4.7 percent after forecasting a smaller earnings increase this year than most analysts in a Bloomberg survey had estimated. Semiconductor designer Gennum Corp. (GND) soared 119 percent after agreeing to be bought by Semtech Corp. for about C$500 million ($494 million).
The S&P/TSX Composite Index (SPTSX) slipped 126.46 points, or 1 percent, to 12,395.24 after closing at a four-month high yesterday.
“The clock is really ticking for the Greeks,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees about C$1.7 billion. “If it’s finally confirmed that one of the euro members actually defaults, the next question is, ‘Who’s next?’”
The index gained 4.7 percent this month through yesterday as improving employment and manufacturing data in the U.S. overshadowed the European debt crisis. The S&P/TSX slumped 11 percent in 2011 as concern the crisis would hamper global growth led to declines in commodity producers’ shares.
European finance ministers refused to increase their offer of 130 billion euros ($169 billion) in public funds for a second Greek debt program. They sought to make bondholders accept lower interest rates on new bonds than the investors want.
The S&P/TSX Financials Index (STFINL) declined for the first time in seven days. TD lost 1.1 percent to C$79.30. Royal Bank of Canada (RY), its bigger rival, slipped 0.9 percent to C$53.79. Bank of Nova Scotia (BNS), Canada’s third-largest lender by assets, decreased 1.1 percent to C$53.96.
Canadian National retreated 4.7 percent to C$75.86 after forecasting earnings of as much as C$5.32 a share, excluding certain items, in 2012. Analysts had estimated profit of C$5.39, according to the average estimate in a Bloomberg survey.
Gold futures fell after settling at a six-week high yesterday. Goldcorp Inc. (G), the world’s second-biggest gold producer by market value, dropped 1.8 percent to C$44.85. Eldorado Gold Corp., Canada’s fifth-largest company in the industry by market value, declined 2.5 percent to C$13.43.
Barrick Gold Corp. (ABX), the world’s largest gold producer, lost 2.8 percent to C$45.95 after Stephen D. Walker, an analyst at Royal Bank, cut his rating on the shares to “sector perform” from “outperform.” Walker had had an “outperform” rating on Barrick since June 2009.
Alacer Gold Corp., which mines in Turkey, tumbled 12 percent, the most since February 2009, to C$9.64 after issuing a 2012 production forecast that trailed the estimate of David Haughton, an analyst at Bank of Montreal.
Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, decreased 2.2 percent to C$44.90 after Jeffrey Zekauskas, an analyst at JPMorgan Chase & Co., reduced his rating on the stock to “neutral” from “overweight.” In a note to clients, Zekauskas cited the 18 percent gain in the company’s U.S.-traded shares from Dec. 19 to yesterday and a preference for shares of Agrium Inc.
No More Purchases
Ivanhoe Mines Ltd., Rio Tinto Group’s partner in Mongolia’s Oyu Tolgoi copper project, slumped 4.2 percent to C$17.53 after Rio Tinto said it doesn’t plan to buy any more Ivanhoe Mines shares after increasing its stake in the Vancouver-based company to 51 percent. Lundin Mining Corp. (LUN), which produces base metals in Europe, retreated 5.2 percent to C$4.96 after saying it will take four or five years for its Neves-Corvo project in Portugal to begin production.
Gennum surged 119 percent, the most since at least 1987, to C$13.45 after Camarillo, California-based Semtech agreed to buy it for C$13.55 a share. Last month, Sterling Partners bought Ottawa-based Mosaid Technologies Inc., which licenses semiconductor patents, for about C$590 million.
Westport Innovations Inc. (WPT), which develops natural-gas engine technology, rallied 7.4 percent to C$38.49. U.S. President Barack Obama may call for a goal for natural gas production in his State of the Union address today, the Wall Street Journal reported, citing unnamed people familiar with the plans.
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