Canada Stocks Little Changed as Gold Offsets Uranium Gain

Canadian stocks were little changed, erasing an earlier gain after trading near a three-year high, as uranium miners rallied to offset declines among energy and gold producers.

Uranium miners Cameco Corp. and Denison Mines Corp. rallied at least 5 percent after Japan’s government indicated the country would continue to rely on nuclear generation for its power needs. MacDonald Dettwiler & Associates Ltd. (MDA) added 3.6 percent after the company reported sales and earnings that surpassed estimates. Detour Gold Corp. dropped 6.7 percent as gold prices retreated from a 17-week high. Trican Well Service Ltd. and Surge Energy Inc. slumped at least 2.6 percent as natural gas retreated a third day.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell less than one point to 14,188.58 at 4 p.m. in Toronto. The benchmark equity gauge has advanced 3.6 percent in February and is 0.6 percent below its high from April 2011.

“People are pretty excited about uranium, it’s a positive for the sector,” said Matt Skipp, chief investment officer with Sw8 Asset Management Inc. in Toronto. He manages about C$40 million ($36 million). “We will take our cues from the U.S. as usual. If there’s continued weakness in base metals, that might create a lag.”

U.S. stocks erased gains in the final hours of trading, with the S&P 500 retreating from a record high for a third straight day.

Japan’s government yesterday presented its draft energy policy showing nuclear as an important component in the nation’s future. Prime Minister Shinzo Abe is seeking to restart the nation’s 48 nuclear reactors, three years after a meltdown at the Fukushima Dai-Ichi power plant.

Ten Canadian companies were scheduled to report quarterly results today and another 15 plan to disclose earnings tomorrow.

Group Returns

Five of 10 groups in the S&P/TSX fell today, with utilities dropping 0.5 percent for the biggest loss. Trading volume was 10 percent below the 30-day average at this time of day.

MacDonald Dettwiler increased 3.6 percent to C$82.98, leading industrial stocks to a 0.6 percent gain. The company, which makes satellites and other space equipment including the International Space Station’s Canadarm2 robotic arm, reported fourth-quarter adjusted earnings of C$1.34 a share, ahead of analysts’ estimates for C$1.28.

Denison Mines soared 8.4 percent to C$1.81, for the highest close in almost three years. The stock has rallied 27 percent in the past four days. Cameco climbed 5 percent to C$26.69.

“Reactor restarts remain the most important near-term catalyst for the uranium space,” said David Sadowski, analyst at Raymond James Ltd., in a note to clients.

Yellowcake

Uranium concentrate, or yellowcake, will rise to $42 a pound by the end of this year, from the current $35.50 level, Sadowski said.

An index of materials producers lost 0.1 percent, for a fourth day of declines. Gold fell 1.1 percent in New York for the biggest drop in almost four weeks as a stronger dollar trimmed demand. Copper dropped 0.5 percent.

Detour Gold (DGC) slumped 6.7 percent to C$9.55 and OceanaGold Corp. lost 2.9 percent to C$2.69.

Trican Well Service sank 4.9 percent to C$13.70 and Surge Energy lost 2.6 percent to C$5.88 as natural gas tumbled 4.7 percent to a two-week low in New York. Natural gas prices have fallen 21 percent in the past three days as forecasts showed a less-intense cold front across the eastern U.S.

Atlantic Power Corp., which operates power generation stations in the U.S., decreased 1.2 percent to C$2.93 to pace losses among utilities stocks.

Royal Bank of Canada slipped 0.8 percent to C$72.09, the biggest decrease in three weeks. The country’s second-largest lender by assets posted a 2.2 percent increase in profit, helped by lower provisions and credit recoveries. Earnings from personal and commercial banking fell 3 percent due to costs from its Caribbean operations.

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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