Canadian stocks rose for the first time in three days as gold climbed to a record, boosting mining stocks, while financial companies rebounded on speculation the U.S. Federal Reserve may return to stimulus policies.
Barrick Gold Corp., the world’s largest gold producer, increased 1.4 percent as the metal jumped 1.3 percent. Toronto-Dominion Bank, Canada’s second-largest lender by assets, rose 1.9 percent as financial companies advanced. Suncor Energy Inc., Canada’s largest oil and gas producer, slipped 1.8 percent after an index of U.S. non-manufacturing businesses decreased more than most economists had forecast.
The Standard & Poor’s/TSX Composite Index gained 63.71 points, or 0.5 percent, to 12,816.03, after falling as much as 1.5 percent in the morning.
“In the last hour there was some very aggressive buying,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, which oversees about C$5 billion ($5.2 billion) said in a telephone interview. “There’s a lot of cash on the sidelines. People are waiting to invest that cash. And there’s always the fear that you missed the bottom.”
The S&P/TSX plunged 5.5 percent in the six days ending yesterday to an eight-month low after data on U.S. and Canadian gross domestic product, as well as U.S. durable-goods orders and consumer spending, trailed most economists’ forecasts. The stock benchmark closed yesterday at its lowest level relative to earnings since July 2010.
Gold increased to $1,666.30 an ounce, after hitting a record of $1,675.90, as the signs of slowing growth and concern over budget deficits in Europe and the U.S. led investors to seek havens.
Barrick rose 1.4 percent to C$47.31. Yamana Gold Inc., the country’s fourth-largest gold producer, gained 2.6 percent to C$13.28. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, advanced 2.4 percent to C$36.87.
“It’s wonderful that we have gold,” Doug Davis, vice chairman of Toronto money manager Davis-Rea Ltd., said in a telephone interview. Davis-Rea manages about C$456 million. “The idea of the U.S. currency as a reserve currency is becoming less popular and countries are scouting around to see where else they can put their money.”
The S&P/TSX Financials Index rallied from the lowest close since October after the Wall Street Journal said three former top officials at the Fed believe the central bank may consider a new round of securities purchases to bolster growth.
TD increased 1.9 percent to C$76.79. Royal Bank of Canada, the country’s largest lender by assets, climbed 2 percent to C$51.30. Great-West Lifeco Inc., Canada’s second-biggest insurer, rose 2.6 percent to C$23.38 before the scheduled release of its second-quarter financial results.
Energy companies fell for a sixth day after the Institute for Supply Management’s index of U.S. non-manufacturing businesses declined to the lowest since February 2010. Crude oil dropped to a five-week low after the U.S. reported an increase in gasoline inventories more than five times the median analyst estimate in a Bloomberg survey.
Suncor lost 1.8 percent to C$34.65. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, slipped 0.8 percent to C$36.83. Enbridge Inc., Canada’s biggest pipeline company, decreased 0.9 percent to C$30.95.
BlackBerry maker Research In Motion Ltd. rose 5.1 percent to C$24.42 after closing at a five-year low yesterday. The company is releasing its first new smartphone models since August 2010 to try to regain market share it has lost to Apple Inc.’s iPhone.
Imax Corp. gained 5.4 percent to C$17.72 after dropping 27 percent in the previous three sessions. James C. Goss, an analyst at Barrington Research Associates Inc., wrote in a note to clients that the developer of widescreen projection technology is executing a “winning formula.”
Technology-patent owner Wi-LAN Inc. sank 13 percent, the most since October 2008, to C$8.15 after losing a court ruling to LG Electronics Inc. Shares of the Ottawa-based company soared 163 percent in the year ending yesterday.
Dundee International Real Estate Investment Trust, which owns commercial properties in Germany, increased 2 percent to C$10.20 in its first day of trading after its initial public offering.