Feb. 3 (Bloomberg) -- Canadian stocks rose, led by gold producers, as the conflict in Egypt intensified and the Institute for Supply Management’s index of non-manufacturing U.S. businesses climbed to the highest level since 2005.
Fronteer Gold Inc., which explores in the U.S. and Turkey, soared 40 percent after agreeing to be bought by Newmont Mining Corp. for C$2.3 billion ($2.3 billion). Royal Bank of Canada, the country’s largest lender by assets, gained 1.2 percent after the U.S. said factory orders increased in December. Open Text Corp., Canada’s largest software company, jumped 12 percent after topping analysts’ second-quarter profit estimates.
The Standard & Poor’s/TSX Composite Index rose 161.06 points, or 1.2 percent, to close at 13,841.35 in Toronto, the highest level since July 2008.
“The U.S. has got more hope right now than many of the emerging markets, and U.S. multinationals are doing relatively well,” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million each for more than 250 families. “U.S. fiscal policy and monetary policy has been extremely accommodative. If the U.S. economy is stronger, one would argue that’s supportive of Canada.”
The S&P/TSX had less than half the year-to-date percentage gain of the S&P 500 through yesterday after outpacing the U.S. benchmark each of the past seven years. S&P/TSX materials stocks, which jumped 36 percent in 2010, had declined 3.6 percent as gold futures slid 6.3 percent.
Gold and silver futures surged as Egyptian Vice President Omar Suleiman, speaking on state television, said clashes between protesters and government supporters in Cairo were part of a “conspiracy” and those responsible for the violence will be punished.
The country’s Muslim Brotherhood rejected Suleiman’s calls for talks, Mohamed Saad El-Katatni, a member of its top executive body, said in a phone interview today.
Barrick Gold Corp., the world’s largest gold producer, climbed 2.9 percent to C$48.28. Goldcorp Inc., the world’s second-biggest producer by market value, rose 2.9 percent to C$41.50. Silver reseller Silver Wheaton Corp. gained 5.4 percent to C$33.79.
Newmont, the world’s second-largest gold producer, will pay C$14 a share in cash for Fronteer Gold. Shareholders of Fronteer Gold will also receive 80 percent ownership of a new entity that will hold some of the Vancouver-based company’s exploration properties.
Fronteer Gold surged 40 percent, the most since 2002, to C$14.32. Detour Gold Corp., which is developing a mine in northern Ontario, rose 10 percent to C$30.90.
Jaguar Mining Inc., which produces gold in Brazil, sank 8.1 percent to C$5.48, the lowest price since January 2009, after saying it will issue $90 million in debt that can be converted into stock.
Copper producer Equinox Minerals Ltd. jumped 9.6 percent to C$6.74, the highest price since at least 2004, after releasing an update to its expansion plans for its Lumwana mine in Africa. Drilling results “suggest the potential to substantially increase” resources at one of the mine’s shoots, the company said.
The ISM’s non-manufacturing index for January exceeded 72 of 74 economist forecasts in a Bloomberg survey. U.S. factory orders increased 0.2 percent in December, compared with the median economist estimate of a 0.5 percent drop, the Commerce Department said today in Washington.
The S&P/TSX Financials Index, the biggest part of the S&P/TSX, advanced to the highest level since June 2008. Royal Bank gained 1.2 percent to C$54.65. Manulife Financial Corp., North America’s fourth-largest insurer, advanced 4.1 percent to C$18.65, the highest price since May 13. Bank of Montreal, Canada’s fourth-biggest lender by assets, increased 1.4 percent to C$59.10.
BlackBerry maker Research In Motion Ltd. rose 2.8 percent to C$62.12 after Kulbinder Garcha, an analyst at Credit Suisse Group AG, said the company is likely to gain market share from Nokia Oyj. RIM’s Finnish rival will “face disruption” when it adopts a new operating system, allowing RIM to sell an additional 5 million smartphones in both 2011 and 2012, Garcha wrote in a note to clients.
Open Text surged 12 percent to a record C$55.90 after agreeing to buy fellow business-software maker Metastorm Inc. for $182 million.
At least 15 analysts raised their share-price estimates on Open Text, and Mike Abramsky, an analyst at Royal Bank of Canada, boosted his rating on the stock to “outperform” from “sector perform.”
Bombardier Inc., the third-largest maker of commercial aircraft, gained 6.5 percent to C$6.37, the highest price since September 2008.
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