Canadian stocks fell for a second day as the U.S. dollar rose and metal prices dropped after Moody’s Investors Service said it might cut Spain’s credit rating.
Barrick Gold Corp., the world’s largest producer of the metal, declined 1.5 percent as the U.S. currency rose against 14 of 16 major counterparts. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, lost 2.3 percent as copper fell the most in three weeks. Toronto-Dominion Bank, the country’s second-largest lender by assets, decreased 1.1 percent as financial shares slumped.
The Standard & Poor’s/TSX Composite Index retreated 51.01 points, or 0.4 percent, to 13,229.07 after Moody’s said it may reduce Spain’s credit rating by one or two levels from Aa1.
“Any negative news like that gives investors another reason to pause a little bit and say, ‘What’s really going on here?’,” said Adrian Mastracci, a money manager at KCM Wealth Management Inc. in Vancouver and leader in the Globe & Mail’s annual stock-picking competition for financial professionals. “Nobody really knows how it’s going to shake out.”
The S&P/TSX is outgaining the S&P 500 for the seventh straight year due in part to a 34 percent surge in the Canadian benchmark’s raw-materials stocks through yesterday. Gold jumped 28 percent on concern that central-bank efforts to boost the money supply will fuel inflation, while copper soared 26 percent as the Chinese economy grew faster than 10 percent for the first three quarters of the year.
The U.S. dollar climbed the most in three weeks against currencies of six major trade partners today after the announcement from Moody’s led investors to sell euros. Spain’s funding requirements “make the country susceptible to further episodes of funding stress,” Kathrin Muehlbronner, an analyst at Moody’s, said in a report.
Gold futures, which tend to move in an opposite direction from the U.S. currency, fell 1.3 percent to $1,386.20 an ounce in New York.
Barrick dropped 1.5 percent to C$52.75. Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, declined for a seventh day, slumping 2.6 percent to C$80.79. Semafo Inc., which mines gold in Africa, sank 5 percent to C$11.44. Silver reseller Silver Wheaton Corp. lost 3.5 percent to C$38.07 as the metal retreated 1.8 percent.
Copper fell from a 31-month high in New York. Teck declined 2.3 percent to C$56.54. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, lost 2.7 percent to C$111.92.
Most S&P/TSX energy companies retreated as natural gas slipped to a two-week low.
Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, fell 1 percent to C$42.50. Nexen Inc., an oil and gas producer with operations on five continents, dropped 1.8 percent to C$22.03. Pacific Rubiales Energy Corp., which produces oil in Colombia, declined 3.7 percent to C$32.28.
TD and Royal Bank of Canada, which derive a higher portion of their revenue from the U.S. than do any other Canadian banks, retreated as the Canadian dollar gained for a sixth day against its U.S. equivalent.
TD decreased 1.1 percent to C$72.68. Royal Bank, the largest Canada-based bank, slipped 0.7 percent to C$52.
BlackBerry maker Research In Motion Ltd. fell 2.3 percent to C$59.48. The company is scheduled to report third-quarter earnings tomorrow.