Canadian Stocks Gain as Gold Futures Rise, Natural Gas Advances

Canadian stocks rose for a third day, led by gold producers, after U.S. Federal Reserve Chairman Ben S. Bernanke said he sees signs the economy is improving and U.S. initial jobless claims declined.

Goldcorp Inc. (G), the world’s second-largest gold producer by market value, gained 2.1 percent as the metal advanced to a two- month high. Royal Bank of Canada (RY), the country’s largest lender by assets, dropped 0.7 percent after Bank of Nova Scotia (BNS) said it will sell shares. Open Text Corp. (OTC), Canada’s biggest software company, rallied 15 percent in Toronto Stock Exchange trading after reporting earnings that beat the average estimate of analysts in a Bloomberg survey.

The S&P/TSX Composite Index (SPTSX) increased 35.82 points, or 0.3 percent, to 12,553.48, the highest level since Sept. 8.

“Global economic growth seems to be improving,” Robert McWhirter, a money manager who oversees about C$140 million ($140 million) at Selective Asset Management Inc. in Toronto, said in a telephone interview. “Europe may continue to have its own problems, but the rest of the world is picking up in economic growth to offset some of that.”

The index has jumped 5 percent this year as the U.S. reported declines in unemployment and the Federal Reserve extended its low-interest-rate pledge to late 2014. The U.S. accounted for 75 percent of Canada’s exports in 2010, according to Statistics Canada. The Labor Department is scheduled to report January’s unemployment rate and payrolls data tomorrow in Washington.

Jobless Claims

Precious-metals producers rose with gold futures after the U.S. reported a bigger decline in first-time unemployment claims than most economists in a Bloomberg survey had forecast. Bernanke told a congressional committee today that economic indicators “have shown some signs of improvement.”

Goldcorp advanced 2.1 percent to C$48.67. Barrick Gold Corp. (ABX), the world’s biggest company in the industry, increased 0.9 percent to C$49.73. Silver Wheaton Corp. (SLW), Canada’s fifth- largest precious-metals company by market value, rallied 1.2 percent to C$36.61, extending its streak of gains to seven days, the longest since August 2010.

NovaGold Resources Inc. (NG), which is developing mines in Alaska and British Columbia, sank 8.6 percent to C$9.44 after disclosing a 35-million-share offering at $9.50 a share.

Atac Resources Ltd. (ATC), which explores for gold in Yukon, soared 23 percent, the most since September 2010, to C$3.87, to extend its six-day jump to 61 percent. The company has no announcements immediately pending and does not know the reason for the shares’ surge, Vanessa Pickering, a company spokeswoman, said in a telephone interview.

New Ratings

Wildcat Silver Corp. (WS), which is developing a mine in Arizona, surged 20 percent to C$2.03 after Graeme Jennings, an analyst at Cormark Securities Inc., began coverage of the company with a “speculative buy” rating. New Millennium Iron Corp., which has projects in eastern Canada, jumped 17 percent to C$2.44 after Adam Low, an analyst at Raymond James Financial Inc., assigned it an “outperform” rating in new coverage, citing the prospect of high ore prices.

Natural gas futures on the New York Mercantile Exchange gained 7.2 percent after the U.S. reported stockpiles declined more last week than most analysts in a Bloomberg survey had forecast. The fuel sank 45 percent in the year ending yesterday.

Encana Corp. (ECA), the country’s largest natural gas producer, advanced for the first time in six days, increasing 5.3 percent to C$19.87. Tourmaline Oil Corp. (TOU), a western Canadian natural gas and oil producer, climbed 3.3 percent to C$25.02.

MEG Energy

Oil-sands developer MEG Energy Corp. (MEG) rose 4.1 percent to C$46.50 after reporting a fourth-quarter profit more than twice as high as the average analyst estimate in a Bloomberg survey, excluding certain items.

Canada’s six largest banks each dropped after Scotiabank, the country’s third-largest lender by assets, said it will sell 30 million shares at C$50.25 a share to help pay for acquisitions.

Royal Bank declined 0.7 percent to C$52.93. Bank of Montreal (BMO), Canada’s No. 4 lender, slipped 0.6 percent to C$58.43.

Scotiabank lost 0.9 percent to C$51.38 in TSX trading. In composite trading, which includes trading platforms that remained open after the company’s announcement yesterday, the shares rebounded 1.9 percent to C$51.38 after decreasing 2.2 percent yesterday.

Open Text surged 15 percent, the most since August 2010, to C$60.34 in TSX trading after its second-quarter profit surpassed the average analyst estimate in a Bloomberg survey by 14 percent, excluding certain items. The shares gained 7.6 percent to C$60.34 in composite trading after soaring 10 percent yesterday.

Air Canada (AC/A), the country’s largest airline, soared 9.5 percent to C$1.27 to extend its seven-day rally to 32 percent, the most since August 2009. The shares have advanced as Delta Air Lines Inc. and US Airways Group Inc. reported earnings that beat analysts’ average estimates.

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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