Canadian Stocks Drop on Home Purchases, Retail Sales

Canadian stocks fell for a third day after reports that U.S. home purchases declined in March and Canadian retail sales fell for the first time in seven months in February.

Enbridge Inc. (ENB), Canada’s largest pipeline company, decreased 1.1 percent after saying it will send divers to determine whether one of its two natural-gas pipelines 99 miles off the Louisiana coast is leaking. Potash Corp. of Saskatchewan Inc. dropped 0.9 percent, leading material producers lower. Property- services company FirstService Corp. plunged 7.5 percent after missing analyst first-quarter earnings estimates. Celestica Inc. (CLS) increased 5.9 percent after beating analyst projections.

The Standard & Poor’s/TSX Composite Index (SPTSX) decreased 8.85 points, or 0.1 percent, to 11,980.10 in Toronto.

“We need some strength out of China to get the materials space going,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.6 billion). “At the end of the day, the Canadian market is just a derivative play on China.”

The S&P/TSX had its first weekly gain in almost two months in the five days ending April 20, snapping its longest losing streak since 2008. Canadian stocks rallied after the International Monetary Fund and the Bank of Canada said economic growth would be faster than previously forecast. The index had its worst decline in a week on April 23, after manufacturing shrank in Europe and China.

Home Values

U.S. houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued today in Washington. Canadian retail sales decreased 0.2 percent to C$38.9 billion, according to Ottawa-based Statistics Canada, which also reduced its January sales-growth estimate to 0.2 percent from 0.5 percent.

Energy companies declined, driven by Enbridge’s investigation of the potential pipeline leak. Enbridge decreased 1.1 percent to C$39.07. Canadian Natural Resources Ltd., the country’s third-largest energy company, fell 0.6 percent to C$31.30.

Potash Corp., the world’s largest fertilizer producer by market value, fell 0.9 percent to C$42.03. Agrium Inc. (AGU), a fertilizer producer and farm retailer, declined 1.1 percent to C$84.14.

FirstService plunged 7.5 percent to C$28.16 after posting a first-quarter loss of 10 Canadian cents a share. The average analyst estimate was for a profit of 18 Canadian cents.

Ratings Boosted

Industrial stocks in the S&P/TSX increased, driven by analyst upgrades for Canadian National Railway Co (CNR), which climbed 2.3 percent to C$81.24. The company was raised to buy from hold at Canaccord Financial Inc., which projects 2012 earnings per share growth of 14 percent, higher than that company forecast of 10 percent. Raymond James Financial Inc., National Bank of Canada and Bank of Montreal also increased their ratings.

Canadian Pacific Railway Ltd. (CP), the country’s second-largest railroad, gained 2.1 percent to C$75.78. Calgary-based carrier WestJet Airlines Ltd. (WJA) added 1.9 percent to C$14.14.

Celestica Inc., which makes electronics for companies including Research In Motion Ltd., increased 5.9 percent to C$8.85 after reporting first-quarter adjusted earnings per share of 25 Canadian cents, beating the average analyst estimate of 22 Canadian cents.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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

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