Canadian stocks rose for the first time in four days as financial companies and base-metals producers advanced on signs of an improving U.S. and global economy and Potash Corp. of Saskatchewan Inc. surged.
Potash Corp., the world’s largest fertilizer producer by market value, rallied 2.8 percent after Horst Hueniken, an analyst at Stifel Financial Corp., said the shares should touch $175 in the next 12 months. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto Group, jumped 8.1 percent as copper advanced. Toronto-Dominion Bank, Canada’s second-largest lender by assets, increased 1.5 percent as economists forecast an increase in consumer confidence and faster economic growth in the U.S.
The Standard & Poor’s/TSX Composite Index rose 89.01 points, or 0.7 percent, to 13,347.58.
Developed economies “will pick up in the summer, and when that happens, all bets are off on the commodities,” said Gerry Brockelsby, who helps oversee about C$125 million ($126 million) as a money manager at Marquest Asset Management Inc. in Toronto. “The fertilizer business is the same as most of the commodities. Particularly China; they need more and more of this stuff, and the supply side is not keeping up with the demand.”
After six months of gains, the S&P/TSX slipped 1.4 percent this month through Jan. 21 as gold stocks plunged 12 percent. The appeal of precious metals has declined as 44 of 60 S&P 500 companies that have reported earnings since Jan. 10 have topped their average analyst estimate, according to Bloomberg data.
Potash Corp. gained 2.8 percent to C$164.27 in Toronto Stock Exchange trading as Hueniken raised his price forecast on the company’s U.S.-traded shares to $175 from $162.50, telling clients in a note that fertilizer prices are likely to increase.
Base-metals producers rose as copper futures gained with stronger demand in China and data showing industrial orders in Europe advanced.
Ivanhoe Mines surged 8.1 percent, the most in six months, to C$27.35. Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 1.9 percent to C$59.79. Equinox Minerals Ltd., which mines copper in Africa, climbed 4.7 percent to C$5.81.
Copper producer Quadra FNX Mining Ltd. plunged 11 percent to C$13.90 after releasing 2011 forecasts that Greg Barnes, an analyst at TD, called “disappointing” in a note to clients. The drop was the largest since June 2009, when the company was known as Quadra Mining Ltd.
All but one of 44 S&P/TSX financial companies advanced as a Bloomberg survey of economists showed a median estimate that U.S. gross domestic product grew at an annualized rate of at least 3.5 percent in the fourth quarter.
TD, Canada’s second-largest bank, increased 1.6 percent to C$76.10. Manulife Financial Corp., North America’s fourth-largest insurer, climbed 1.6 percent to C$17.52. Brookfield Asset Management Inc., Canada’s biggest real-estate company, rallied 2.4 percent to C$33.16.
BlackBerry maker Research In Motion Ltd. rose for the first time in five days, gaining 2.6 percent to C$62.35. RIM plans to release software that will allow users to segregate personal and work-related e-mail, keeping the work e-mail under the control of the user’s company, Reuters reported. The news service cited an interview with Jeff McDowell, RIM’s senior vice-president for business and platform marketing.
Cameco, Uranium One
Cameco Corp., the world’s second-biggest uranium producer, rose 2.4 percent to C$38.68 after TradeTech LLC said prices of the nuclear fuel advanced to the highest price since April 2008 last week. Uranium One Inc., the producer controlled by Moscow-based ARMZ Uranium Holding, jumped 4.2 percent to C$5.93.
Canadian National Railway Co., the country’s largest railroad, rose 1.5 percent to C$68.45 after announcing a tentative contract agreement with the Canadian Auto Workers. The union had said it would strike tomorrow if an agreement was not reached.
Loblaw Cos., Canada’s largest grocery chain, gained 2.7 percent to C$39.03 after Michael Van Aelst, an analyst at TD, raised his rating on the stock to “action list buy” from “buy.”
In a note to clients, Van Aelst said the stock is historically inexpensive relative to forecast profit. Loblaw traded at $13.21 per dollar of estimated earnings over the next 12 months as of Jan. 21, the lowest since at least 2005, according to Bloomberg data.