Canadian Stocks Rise on U.S. Stimulus Speculation; Copper Gains

Canadian stocks rose, sending the benchmark measure of equities to the highest closing level since June, as copper and oil climbed and investors speculated the Federal Reserve will announce economic stimulus tomorrow.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, rallied 1.6 percent as copper advanced. Penn West Energy Trust, the country’s second-biggest energy trust, increased 2.2 percent as crude futures rose for the first time in four days. Research In Motion Ltd. gained 3.4 percent as Saudi Arabia delayed its decision to shut off BlackBerry instant messaging until midnight today.

The Standard & Poor’s/TSX Composite Index gained 63.59 points, or 0.5 percent, to 11,863.56 in Toronto. That’s its highest close since June 21.

“We’re waiting to see what kind of innovative measures Bernanke comes up with,” said Barry Schwartz, who helps manage C$340 million ($328 million) as a money manager at Baskin Financial Services Inc. in Toronto, referring to U.S. Fed Chairman Ben Bernanke. “We take our cues from the U.S. If their stock market is healthy, it can only mean good things for the Canadian economy as well.”

The S&P/TSX has gained 1 percent this year as persistent U.S. unemployment has dimmed the impact of stronger-than- forecast corporate earnings. The Thomson Reuters/Jefferies CRB Commodity Price Index has dropped 3.1 percent. Energy and raw-materials companies make up 46 percent of Canadian stocks by market value.

Commodities Gain

Copper rose in New York and London on speculation that the Federal Reserve will extend efforts to shore up the economy in the U.S., the world’s second-largest user of the metal after China. Crude oil rose for the first time in four days as advancing equity markets buoyed confidence that the economic rebound will stimulate fuel demand. First Quantum Minerals rose 1.6 percent to C$66. Penn West Energy Trust climbed 2.2 percent to C$20.50.

“The rebound in commodities is about speculation about whether the government will add more liquidity to the system,” said Danielle Park, who helps manage C$200 million ($190 million) as a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario. “The idea is that we might see asset speculation out of it like we saw in 2009 -- that’s more of the story than anything to do with demand.”

RIM rose 3.4 percent to C$56.80, helping technology shares rise 2.7 percent for the biggest gain in the S&P/TSX.

CGI Group Rises

CGI Group Inc. increased 1.3 percent to C$14.83. Canada’s biggest computer-services provider won a six-year $46.2 million government contract to build a diabetes registry for eHealth Ontario.

Uranium One Inc. advanced the most in the S&P/TSX, gaining 11 percent to C$3.14. The uranium producer will buy back debt from Toshiba Corp., Tokyo Electric Power Co., and the Japan Bank for International Cooperation after Atomredmetzoloto ZAO, a Russian uranium mining company, proposed to buy a majority stake.

European Goldfields Ltd. rose second-most in the gauge, jumping 7.3 percent to C$9.07. The mining company operating in southeastern Europe submitted a final environmental impact study for its project in Halkidiki, Greece, and said an environmental permit for the Stratoni lead-zinc-silver mine in the country had been extended to the end of July 2012.

Aecon Group Inc. increased 3.2 percent to C$11.93. Canada’s largest publicly traded construction company posted second-quarter profit of 14 Canadian cents a share, compared with the 13-cent average analyst estimate according to Bloomberg data.

Ratings Changes

Superior Plus Corp. had biggest drop in the S&P/TSX, falling 6.7 percent to C$11.60. The propane distributor was cut to “reduce” from “market perform” at Cormark Securities Inc. and to “reduce” from “hold” at Toronto-Dominion Bank.

Consolidated Thompson Iron Mines Ltd. declined 1.7 percent to C$8.06 for one of the biggest slumps in the gauge. The company, which explores for iron ore and operates sites in Canada, was cut to “hold” from “buy” at Canaccord Genuity Corp.

New Gold Inc. dropped 0.7 percent to C$5.70. The mining company was cut to “hold” from “buy” at Mackie Research Capital Corp.

Ensign Energy Services Inc. slumped 2 percent to C$12.45. The oilfield-services company posted second-quarter profit excluding some items of 6 cents a share compared with the 13-cent average analyst estimate in a Bloomberg survey.

Gold Producers Slump

Gold futures fell, snapping the longest rally since November, as the U.S. dollar’s rebound curbed demand for the precious metal as an alternative asset. Gammon Gold Inc. declined 2.3 percent to $6.01, Yamana Gold Inc. decreased 1 percent to C$10.14, and Goldcorp Inc. fell slumped 0.8 percent to C$41.30.

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