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Canadian Stocks Decline as U.S. Economic Data Trail Estimates

Canadian stocks fell, led by banks and energy producers, as European leaders failed to agree on a new bailout for Greece and data on manufacturing and industrial production in the U.S. trailed economists’ forecasts.

Toronto-Dominion Bank, Canada’s second-biggest lender by assets, declined 1.2 percent after U.S. industrial production gained less than most economists had estimated. Suncor Energy Inc., the country’s largest oil and gas producer, dropped 2.6 percent as crude oil futures retreated the most in a month. Breakwater Resources Ltd., a mining company with operations in Canada, Honduras and Chile, soared 43 percent after agreeing to be bought by Nyrstar NV.

The Standard & Poor’s/TSX Composite Index lost 125.79 points, or 1 percent, to 12,972.03.

“We’ve been getting some numbers that aren’t as robust as people would have liked,” said Jennifer Radman, a money manager at Caldwell Investement Management Ltd., which oversees about C$1 billion ($1 billion). “It’s hard to really tell where the economy’s going.”

The S&P/TSX fell 5.1 percent this month through yesterday as data on U.S. employment and manufacturing trailed economists’ forecasts. Seventy-five percent of Canada’s exports went to the U.S. last year, according to Statistics Canada.

A monthly index of manufacturing in New York, northern New Jersey and Connecticut dropped to the lowest level since November, the Federal Reserve Bank of New York said today. National industrial production climbed 0.1 percent in May, the Federal Reserve said in Washington, missing the median economist forecast of 0.2 percent.

European finance officials meeting in Brussels were unable to break a deadlock on how to enroll investors in a second Greek bailout without causing a default. Greek Prime Minister George Papandreou will name a new government tomorrow and call a vote of confidence in parliament as he seeks to pressure rebel lawmakers to back the austerity plan that aims to secure a new bailout.

All S&P/TSX banks and all but one insurer dropped. TD, which has more than 1,000 U.S. branches, declined 1.2 percent to C$78.48. Royal Bank of Canada, the country’s largest lender by assets, slipped 1.1 percent to C$53.78. Bank of Nova Scotia, the No. 3 bank in the country, lost 0.8 percent to C$57.23.

Crude futures retreated to the lowest price since Feb. 22.

Suncor decreased 2.6 percent to C$37.36. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, fell 2.5 percent to C$28.01. Crescent Point Energy Corp., a western Canadian oil and gas producer, dropped 2.3 percent to C$43.03. Oil-sands developer BlackPearl Resources Inc. slumped 5.5 percent to C$6.19.

Breakwater, which mines base and precious metals, surged 43 percent to C$7.42, reaching a three-year high after Nyrstar agreed to buy it for C$7 a share, plus a special dividend of 50 Canadian cents a share. Nyrstar, based in Balen, Belgium, is the world’s largest maker of refined zinc.

All of the major base metals traded on the London Metal Exchange declined. Teck Resources Ltd., Canada’s largest company in the industry, lost 1.9 percent to C$45.40. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, decreased 1.5 percent to C$121.40. Mercator Minerals Ltd., which mines molybdenum and copper, sank 6.9 percent to C$2.56, an eight-month low.

Fertilizer producers declined as wheat and corn futures retreated. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, lost 1.3 percent to C$52.80. Agrium Inc. decreased 2.7 percent to C$81.42.

Sino-Forest Corp., the forestry company fighting a short seller’s assertions of financial manipulation, slumped 4.2 percent to C$3.22 after closing at a five-year low yesterday. The shares have plunged 82 percent since the day before Carson Block, the founder of Muddy Waters LLC, said Sino-Forest’s stated land holdings do not match Chinese city records. The company has denied the assertions.

Mining company China Gold International Resources Corp. tumbled 8.5 percent to C$3.45, extending its monthly decline to 22 percent. An index of China-focused companies traded in Canada, other than Sino-Forest, has sunk 20 percent in May.

Other gold producers advanced as the European debt crisis led investors to seek out safe havens. Goldcorp Inc., the world’s second-largest gold producer by market value, increased 2.5 percent to C$46.76. Barrick Gold Corp., the biggest company in the industry, rose 1.2 percent to C$43.05.

Air Canada, the country’s largest airline, gained 6.4 percent to C$2.01 to extend its two-day surge to 12 percent, the most in 10 months. The Canadian government may introduce legislation to end a strike by call-center, check-in and gate staff tomorrow, Labor Minister Lisa Raitt said today outside Parliament.

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