Canadian stocks fell for a third day, to the lowest close in more than two weeks, as consumer staples and gold producers declined and investors considered mixed trade data and prospects for Federal Reserve stimulus.
Alimentation Couche-Tard Inc. lost 1.5 percent after Seven & I Holdings Co., operator of 7-Eleven convenience stores, said it may more than double its North American outlets. Canadian Pacific Railway Ltd. fell 2.8 percent as Pershing Square Capital Management LP said it will sell part of its stake. Barrick (ABX) Gold Corp. retreated 1.7 percent after saying production at its Pascua-Lama project will be delayed.
The Standard & Poor’s/TSX Composite Index (SPTSX) fell 15.83 points, or 0.1 percent to 12,593.97 at 4 p.m. in Toronto, the lowest since May 16. The index has added 1.3 percent this year.
“Investors want more clarity on when the Fed will taper its bond purchasing program, and a lot of it is dependent on economic data, which has been mixed signals,” Anish Chopra, a fund manager with TD Asset Management Ltd., said from Toronto. He helps manage about C$204 billion ($197 billion). “When you look at gold stocks, the actual commodity has fallen quite a bit. Investors are trying to figure out where the new range is.”
Esther George, Fed Bank of Kansas City President, urged the Fed to reduce its $85 billion in monthly bond buying as the U.S. economy improves. Data today from the Commerce Department showed the trade deficit in the U.S. widened in April from a more than three year low, reflecting a rebound in imports of consumer goods and business equipment that eases concern about the degree of slowing in economic growth.
Canada’s merchandise trade deficit widened in April to C$567 million ($550 million) from a revised C$3 million shortfall in March. Canada has recorded 16 straight trade deficits, the longest run in at least a quarter century.
Consumer staples stocks fell 1.2 percent as a group, as eight of 10 industries in the S&P/TSX retreated. Trading volume was 8.8 percent higher than the 30-day average.
Alimentation Couche-Tard, which operates convenience stores and gas bars across North America and in Norway, lost 1.5 percent to C$57.70. Competitor 7-Eleven may increase its North American store count to as high as 30,000, Seven & I Holdings Chairman Toshifumi Suzuki said in an interview with Bloomberg on May 30 in Tokyo.
Barrick, the world’s largest gold producer, retreated 1.7 percent to C$21.57 after announcing production at its Pascua-Lama project on the border of Chile and Argentina won’t start in the second half of 2014 as planned, due to demands from Chile’s environmental agency. The delay will lead to higher capital costs, the company said in a filing.
Barrick has already raised the cost estimate for the project twice in the past year, to as much as $8.5 billion.
AuRico Gold Inc. slipped 2.5 percent to C$5.41 and Kinross Gold Corp. lost 1.6 percent to C$6.66 as the price of gold declined 1 percent to settle at $1,397.20 an ounce in New York.
CP Rail (CP) lost 2.8 percent to C$131.76 after William Ackman’s Pershing Square said in a statement yesterday it will cut its stake in the railway by about 29 percent by selling as many as 7 million shares over six to 12 months.
Ackman took control of the company last year, hiring Hunter Harrison as the new chief executive officer to improve operations. The stock has tripled since his 2011 investment and jumped 81 percent in the past year.
Lululemon Athletica Inc. advanced 2.1 percent to C$83.30. The company is restocking its Luon black yoga pants in stores and online this month after they were pulled in March for being too sheer, the company said yesterday in a note on their website.
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