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Canada Stocks Decline as Emerging Markets Continue to Slide

Canadian stocks fell, sending the benchmark equities gauge to a second weekly loss, as financial shares and materials producers sank after emerging-market currencies weakened.

Cameco Corp. (CCO), Canada’s largest uranium miner, dropped 3.7 percent after selling its stake in Bruce Power. Atlantic Power Corp. plunged 17 percent after TD Securities Inc. cut its rating on the stock. Toronto-Dominion Bank slumped 0.9 percent to a six-week low, as an index of bank stocks dropped to the lowest since October. BlackPearl Resources Inc. climbed 1.2 percent after Canaccord Genuity Corp. recommended buying the shares.

The Standard & Poor’s/TSX Composite Index (SPTSX) declined 40.34 points, or 0.3 percent, to 13,694.94 at 4 p.m. in Toronto. The gauge lost 0.2 percent in the past five days after dropping 1.3 percent last week. Trading volume was about 4.7 percent higher than the 30-day average.

“Everything relates to psychology, and the psychology of a fear of deflation, fear of China doing less well, the Fed and tapering,” Irwin Michael, fund manager at ABC Funds in Toronto, said in a phone interview. His firm manages about C$850 million. “There’s still a real tug-of-war between the positive and negative forces out there.”

Copper fell for an eighth day in London, capping the longest losing streak since December 1998, on concern demand is set to weaken as the economy slows in China. West Texas Intermediate crude fell from the highest level of 2014 on concern that developing economies may shrink.

GDP Report

Canada’s gross domestic product expanded for a fifth straight month in November as the nation’s oil and gas production rebounded, Statistics Canada said today in Ottawa.

Consumer spending in the US. climbed more than forecast in December, even as incomes stagnated. Household purchases, which account for about 70 percent of the economy, rose 0.4 percent, after a 0.6 percent gain the previous month, Commerce Department figures showed today. The U.S. is Canada’s largest trading partner.

Seven of 10 industries in the S&P/TSX declined. Materials producers fell 0.3 percent as a group.

Financial stocks, which account for 34 percent of the index’s weighting, plunged 0.8 percent, extending a decline this year to 3.6 percent.

The S&P/TSX Banks Index lost 1.1 percent to a three-month low. TD Bank fell 0.9 percent to C$96.32 and Royal Bank of Canada slid 1.1 percent to C$68.93.

Cameco slipped 3.7 percent to C$23.67 in the biggest drop since July. The company is selling its stake in Bruce Power to Borealis Infrastructure, an investment arm of the Ontario Municipal Employees Retirement System, for C$450 million to focus on its uranium business. Bruce Power operates eight reactors at the world’s largest nuclear generating facility.

Railroad Drop

Atlantic Power plunged 17 percent to a record C$2.92 for the biggest drop in the index. The shares were cut to reduce from hold at TD Securities.

BlackPearl Resources, an oil and gas exploration and development company in Western Canada, climbed 1.2 percent to C$2.50. Canaccord Genuity Corp. recommended buying the shares, which have risen 10 percent in 2014.

TransCanada Corp., the Calgary-based company, rallied 1.2 percent to C$48.42, the biggest gain of the year. A proposed Keystone XL pipeline cleared a key hurdle today, with the U.S. State Department finding the Canada-U.S. oil pipeline would not greatly increase carbon emissions.

The S&P/TSX is up 0.5 percent in 2014, the seventh best performance among 24 developed markets. Canadian stocks fell short of American peers last year, gaining 9.6 percent compared to the 30 percent rally on the U.S. benchmark, as gold posted its worst annual decline since 1981.

Daily average moves in Canadian stocks are up in 2014. The S&P/TSX rose or fell an average of 0.51 percent per day this month, compared with 0.41 percent in December, according to data compiled by Bloomberg.

To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net

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

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