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Canadian Stocks Retreat on U.S. Jobs Report as Gold, Oil Decline

Feb. 4 (Bloomberg) -- Canadian stocks fell, trimming the biggest weekly gain since July for the Standard & Poor’s/TSX Composite Index, as oil and gold dropped and a U.S. government report showed slower-than-estimated growth in jobs.

Suncor Energy Inc., the country’s biggest oil and gas producer, fell 3.2 percent as crude declined. Barrick Gold Corp. fell 1.6 percent. Teck Resources Ltd., the country’s largest base-metals and coal producer, dropped 1.9 percent. Research In Motion Ltd. gained 1.4 percent after the BlackBerry maker received an “outperform” rating from National Bank of Canada.

The S&P/TSX fell 49.5 points, or 0.4 percent, to 13,791.85. It gained 2.6 percent this week.

“Currency-driven speculation and bond yields have caused a bit of fear,” said Greg Taylor, who helps oversee about $5 billion as a money manager at Aurion Capital Management in Toronto. “The market has been positive throughout the year, but heading into the weekend you are seeing people take some money off the table. The economic data has all been fairly good.”

Canadian stocks fell even after a report showed the nation’s employment rose by 69,200 in January, more than four times the median forecast, adding to evidence the country’s economic recovery may be accelerating. The jobless rate rose to 7.8 percent from December’s 7.6 percent, as more people sought work. Economists surveyed by Bloomberg News forecast 7.6 percent unemployment and job growth of 15,000.

Earnings Estimates

The S&P/TSX has gained 2.6 percent this year. Of the 22 S&P/TSX companies that have reported earnings since Jan. 10, 68 percent have beaten analysts’ per-share estimates, compared with 73 percent of companies in the S&P 500.

Crude fell after a U.S. government report showed that the economy added fewer jobs in January than economists forecast, bolstering concern that fuel demand will slip in the world’s biggest oil-consuming country and concerns about unrest in Egypt subsided as fighting yesterday gave way to a peaceful mass protest in Cairo’s Tahrir Square. About 2.5 percent of global oil output moves through Egypt via the Suez Canal and the Suez-Mediterranean Pipeline, Goldman Sachs Group Inc. said.

Oil for March delivery declined 1.7 percent to $89.03 a barrel on the New York Mercantile Exchange. Suncor declined 3.2 percent to C$40.61.

Stability

“There is a very strong military in Egypt, so we have to presume there will be stability at some point,” said Michael Smedley, who helps manage C$1.2 billion ($1.19 billion) as a money manager at Morgan Meighen & Associates Ltd. in Toronto. “It would be extreme to think that oil supplies would be cut off, so we are seeing oil settle down on that.”

Gold fell as the U.S. dollar rose. Futures on the metal for April delivery declined 0.3 percent to $1,349 an ounce in New York. Barrick retreated 1.6 percent to C47.51, while Teck dropped 1.9 percent to C$61.76.

RIM gained 1.4 percent to C$63 after the BlackBerry maker received an “outperform” rating in new coverage at National Bank of Canada and Morgan Stanley said the company will beat estimates when it reports fourth-quarter earnings on March 24.

Aecon Group Inc. fell 11 percent, the most in the S&P/TSX, to C$8.78 after the construction and infrastructure-development company said it will record “significant losses” on an oil-sands project. Aecon said the losses should be limited to fiscal 2010, and will not affect its 2011 financial results.

Grande Cache Coal Corp., which mines in Alberta, declined 5.5 percent to C$10.12. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, fell 0.9 percent to C$179.16.

To contact the reporter on this story; Jennifer A. Johnson in New York at jjohnson156@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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