Canada Stocks Fall to a Three-Week Low Amid U.S. Budget Impasse

Canadian stocks fell, sending the benchmark index to a three-week low, as BlackBerry Ltd. (BB) slumped and the U.S. government shutdown extended to a third day.

BlackBerry, the smartphone maker looking to sell itself, lost 3.6 percent to pace declines among technology stocks. WestJet (WJA) Airlines Ltd. dropped 2.5 percent as load factor slipped in September. Valeant Pharmaceuticals International Inc. rose 1.4 percent after receiving approvals for products in the U.S. and Canada. Agrium Inc. added 0.7 percent after naming a successor for its retiring chief executive officer.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 103.88 points, or 0.8 percent, to 12,735.12 at 4 p.m. in Toronto, the lowest close since Sept. 13. The index has gained 2.4 percent this year for the second-worst performance among developed markets, ahead of only Singapore.

“Markets are in a wait-and-see approach to see what’s happening in the U.S. and that really determines what happens in Canada,” said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($209 billion). “In the past they’ve been able to get to last-minute deals. In this case it might be more of a comprehensive package that includes the debt ceiling. The problem is the ceiling may not be exactly Oct. 17, it could be later and that’s a long way away.”

The first face-to-face talks between U.S. President Barack Obama and congressional leaders failed to break the budget logjam as a partial U.S. government shutdown entered its third day. The Oval Office meeting yesterday evening ended with both sides reiterating their positions and the points they’ve been making for days, increasing the possibility for a prolonged standoff over the government shutdown and raising the U.S. debt limit.

WestJet Falls

WestJet declined 2.5 percent to C$25.41 as industrial stocks retreated 0.9 percent as a group. Nine of 10 industries in the S&P/TSX fell. Trading volume was in line with the 30-day average.

WestJet, based in Calgary, reported a September load factor of 76.6 percent, compared with a record 79.1 percent in the same period last year, the company said in a statement. Load factor is a measure of airline efficiency relative to capacity.

BlackBerry dropped 3.6 percent to C$7.97, the lowest close in almost a year. Pierre Ferragu, analyst with Sanford C. Bernstein, cut his rating for the stock to underperform, the equivalent of a sell.

Tentative Offer

Fairfax Financial Holdings Ltd., which has a tentative $4.7 billion offer in place for the struggling smartphone maker, is unlikely to get financing, as BlackBerry’s cash position is worse than expected, Ferragu said.

Imax Corp., the big-screen cinema company, slumped 8.7 percent to C$26.77, the worst decline since July 2011. Analyst David McFadgen of Cormark Securities Inc. lowered his rating for the stock to reduce, the equivalent of sell. Imax has jumped 20 percent this year.

Suncor Energy Inc. slipped 1.3 percent to C$36.32 and Talisman Energy Inc. lost 2.3 percent to C$12.52 as crude fell for a third day this week on concern the U.S. government shutdown will reduce fuel demand.

Valeant Pharmaceuticals gained 1.4 percent to C$114.91, a record high, after the drugmaker’s Bausch and Lomb unit won approval from the U.S. Food and Drug Administration for a monthly disposable contact lens product.

Valeant also secured regulatory approval in Canada for a topical treatment of nail infections caused by fungi.

Agrium, the largest U.S. farm products retailer, added 0.7 percent to C$88.87. The company named Chuck Magro, currently chief operating officer, as the successor to CEO Mike Wilson, effective at the beginning of next year. Wilson plans to retire at the end of the year after 10 years as CEO.

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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