Canada Stocks Cap Seventh Straight Weekly Gain on U.S. Jobs Data

Canadian stocks rose, completing a seventh straight weekly advance, as the lowest U.S. unemployment since February 2009 signaled Canada’s biggest trade partner is weathering the European debt crisis.

Toronto-Dominion Bank (TD), Canada’s second-largest lender by assets, gained 1.4 percent. Barrick Gold Corp. (ABX), the world’s largest gold producer, lost 2.3 percent as the metal retreated the most in five weeks. Canadian Pacific Railway Ltd. (CP), the country’s second-biggest railroad, advanced 2.3 percent after an analyst at JPMorgan Chase & Co. raised his rating on the shares.

The S&P/TSX Composite Index (SPTSX) increased 23.8 points, or 0.2 percent, to 12,577.28, extending its weekly rally to 0.9 percent. The streak of gains was the longest since a seven-week advance ended April 2009.

“The number was a huge improvement over expectations,” Pat McHugh, senior managing director and Canadian equity strategist at Manulife Financial Corp. (MFC)’s asset-management unit, said in a telephone interview. The unit oversees about $217 billion. “Almost twice as many jobs were created last month than economists had been predicting. The biggest beneficiary of an improvement in U.S. consumers is the banking system.”

The S&P/TSX has climbed to the highest since September, led by raw-materials producers, as U.S. gains in employment and manufacturing outweighed concern that Europe’s debt crisis will slow world growth. The U.S. accounted for 75 percent of Canada’s exports in 2010, according to Statistics Canada.

Banks, Gold Stocks

U.S. nonfarm payrolls increased by 243,000 jobs in January, the Labor Department said today in Washington. None of the 89 economists in a Bloomberg survey had forecast a gain that big. The U.S. unemployment rate fell to 8.3 percent from 8.5 percent.

The S&P/TSX Financials Index (STFINL) rose for the third time in four days. TD climbed 1.4 percent to C$78.83. Royal Bank of Canada (RY), its bigger domestic rival, gained 0.7 percent to C$53.32. Manulife Financial Corp., North America’s fourth- largest insurance company, rallied 3.4 percent to C$12.34.

Gold stocks dropped as the metal declined on the Comex in New York after settling at a two-month high yesterday. Barrick lost 2.3 percent to C$48.59.

Goldcorp Inc. (G), the world’s second-largest producer by market value, decreased 2.9 percent to C$47.25. Eldorado Gold Corp. (ELD), Canada’s fifth-biggest gold company by market value, slumped 5.1 percent to C$14.64.

‘On the Chin’

“The strength in the economy implies that the probability of more Fed easing or another quantitative package is being diminished, and gold’s going to take it on the chin,” McHugh said. “The flight-to-safety movement doesn’t appear to be as important as a result of the stats we’ve seen today.”

Energy stocks in the S&P/TSX advanced for a fourth day as crude oil futures climbed on the New York Mercantile Exchange.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, increased 1.9 percent to C$34.90. Cenovus Energy Inc. (CVE), the country’s fifth-biggest energy company, rose 2.9 percent to C$38.80. Petrobank Energy and Resources Ltd. jumped 6.8 percent to C$15.12.

Base-metals companies gained as copper futures advanced the most in two months. Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, increased 2.1 percent to C$43.40. First Quantum Resources Ltd., the country’s second-biggest publicly traded copper producer, climbed 3 percent to C$23.43.

Drilling Results

Copper Fox Metals Inc. (CUU), owner of a mining project in British Columbia, jumped 12 percent to C$1.54 after reporting test results from four exploratory drill holes at its Schaft Creek property.

Canadian Pacific surged 2.3 percent to C$73.47, the highest since May 2008. Thomas R. Wadewitz, an analyst at JPMorgan, boosted his rating on the stock to “overweight” from “neutral,” saying the company is in the early stages of a turnaround.

Shares of the Calgary-based company have soared 59 percent since Sept. 22 as William Ackman’s Pershing Square Capital Management LP bought a stake in the company and began pushing it to replace its chief executive officer.

Canadian National Railway Co. (CNR), the country’s largest railroad, rose today for a fourth session, gaining 0.9 percent to C$77.91.

Smart Technologies Inc. (SMA), which makes electronic whiteboards, plunged 12 percent, the most since May, to C$3.66 after cutting its 2012 earnings forecast. At least five analysts reduced their price estimates on the shares.

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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