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Canada Stocks Fall as Metals Slide on U.S. Manufacturing Reports

Canadian stocks fell as banks and raw-material shares slumped after the price of gold dropped below $1,400 on disappointing U.S. manufacturing data.

Detour Gold Corp. and Dundee Precious Metals Inc. slumped at least 8.5 percent as gold extended the longest losing streak in almost three months. First Majestic Silver Corp. and Endeavour Silver Corp. dropped more than 7.4 percent as the price of silver fell. Aurizon Mines (ARZ) Ltd. retreated 2.3 percent after reporting an unexpected loss and decreasing production.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 103.40 points, or 0.8 percent, to 12,473.65 at 4 p.m. in Toronto. The benchmark equity gauge trimmed its gain for the year to 0.3 percent. Trading volume was 13 percent lower than the 30-day average.

“It’s another day where the bears are having their way,” John Kinsey, a fund manager with Caldwell Securities Ltd., said from Toronto. He helps manage about C$1 billion at the firm. “There are a lot of numbers this week and it’s a bit of a roller coaster ride. Earlier in the year the economy seemed to have been gaining traction but lately numbers have been soft. That’s discouraging.”

U.S. industrial production declined in April by the most in eight months, reflecting broad-based cutbacks in U.S. manufacturing that show factories will provide little support for the economy. New York area manufacturing unexpectedly contracted in May, according to a separate report.

Metals Slump

The S&P GSCI Index (SPGSCI), which tracks prices for a basket of commodities including metals, crude and grain, fell 0.1 percent for a fourth day of losses, the longest losing streak in a month. Iron ore slumped, pushing the price down 20 percent since Feb. 20, meeting the common definition of a bear market.

Raw-materials producers fell 2.7 percent as a group as all 10 industries retreated. The S&P/TSX Gold Index retreated 5 percent as all 30 members in the group declined.

Detour Gold Corp. (DGC) slumped 8.5 percent to C$9.85 and Dundee Precious Metals Inc. tumbled 15 percent to C$4.36 as gold for June delivery plunged 2 percent to settle at $1,396.20 for a three-week low. The price of gold has retreated for five days, the longest since Feb. 20.

Aurizon Mines dropped 2.3 percent to C$3.89 after reporting a first-quarter loss of 2 Canadian cents a share. Analysts had expected a profit of 1 cent a share. First-quarter production at the company’s Casa Berardi mine in Quebec fell to 24,444 ounces from 33,488 ounces a year ago due to major shutdowns to incorporate a deeper mine shaft, the company said in a statement.

Silver Drops

First Majestic Silver plunged 9 percent to C$10.42 and Endeavour Silver retreated 7.4 percent to C$4.13. Silver for July delivery tumbled 3.1 percent to settle at $22.658 an ounce in New York, its biggest decline since May 1.

Manulife Financial Corp. dropped 1.5 percent to C$15.75 and Royal Bank of Canada lost 1 percent to C$60.94 to pace declines among financial stocks. The S&P/TSX Financials Index retreated 0.7 percent, the lowest in two weeks.

BlackBerry, formerly known as Research In Motion Ltd., lost 1.7 percent to C$15.26. Pierre Ferragu, equity analyst with Sanford Bernstein, lowered his rating for the stock to market perform, the equivalent of a hold, from outperform, the equivalent of a buy.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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