Canadian Stocks Fall Most Since June 2009 After U.S. Rating Cut

Canadian stocks fell the most in 25 months as energy and financial shares slid after Standard & Poor’s cut the U.S. credit rating, fueling concern that the global economy is slowing.

Suncor Energy Inc., Canada’s largest oil and gas producer, decreased 6.9 percent as crude futures dropped below to $80.60 a barrel from $86.88 on Aug. 5. Toronto-Dominion Bank, Canada’s second-largest lender by assets, slipped 3 percent. Barrick Gold Corp., the world’s largest gold producer, increased 2.3 percent as the metal jumped to a record.

The Standard & Poor’s/TSX Composite Index decreased 491.21 points, or 4 percent, to 11,670.96, the biggest decline since June 2009, as of 4:56 p.m. in Toronto.

“We have to carry on with this present state of worry for the time being,” and hope politicians will come to some agreements, Michael Smedley, who heads a group that manages about C$1 billion in assets Morgan Meighen & Associates Ltd., said in a telephone interview. “I don’t have concern for the longer term. On the very short term basis it is very tempting to sell everything, but that usually proves to be wrong.”

The S&P/TSX plunged 6.1 percent last week as the U.S. reported a decrease in consumer spending and said the jobless rate slipped to 9.1 percent as workers left the labor force. S&P cut the U.S. credit rating to AA+ from AAA on Aug. 5, saying a deal between President Barack Obama and lawmakers to raise the government’s debt ceiling was inadequate. U.S. stocks fell, stoking concern an economic slowdown will worsen.

Banks, Insurers

The S&P/TSX financial stock index fell 3.8 percent, the most in two years. Royal Bank of Canada, the country’s largest lender by assets, fell 3.1 percent to C$48.51. Bank of Nova Scotia, Canada’s third-biggest lender by asset, declined 3.4 percent to C$49.93. Toronto-Dominion lost 3 percent to C$71.67.

Manulife Financial Corp., North America’s fourth-largest insurer, retreated 8.3 percent, the most in more than a year, to C$12.53. “The events of the past month have impacted Manulife more than any other large-cap Canadian financial institution,” Peter Routledge, an analyst at National Bank of Canada, wrote in a report today. The insurer reports second-quarter results Aug. 11.

The S&P/TSX energy stock index declined for the ninth day, the longest streak of declines since 2000, as all 67 stocks in the index fell. Crude oil futures plunged 6.4 percent to $81.31 a barrel, the lowest settlement in New York since Nov. 23.

Energy Shares

Canadian Natural Resources Ltd. the country’s second-largest energy company by market value, dropped 6.2 percent to C$33.05 in Toronto Stock Exchange trading, the most since June 2009.

Cenovus Energy Inc., the country’s fifth-biggest energy company, lost 6 percent to C$31.90, the most since at least November 2009. BlackPearl Resources Inc. tumbled 21 percent, the most since October 2008, to C$4. Suncor Energy slumped 6.9 percent to C$30.10 in Toronto exchange trading, its lowest price since April 2009.

Emera Inc. retreated 6 percent to C$28.14. The owner of Nova Scotia Power said second-quarter earnings minus some items were 24 Canadian cents, missing the average estimate of 30 Canadian cents of six analysts surveyed by Bloomberg.

Gold topped $1,700 an ounce for the first time, reaching as high as $1,713.20 an ounce. Goldcorp Inc., world’s second largest producer of the metal by market value, increased 2.4 percent to C$46.31. Barrick Gold Corp. rose 2.3 percent to C$45.92. Alamos Gold Inc., which mines in Mexico, jumped 8 percent to C$18.16.

Wi-LAN Inc. plunged 19 percent to C$5.66, the most since December 2005. The technology-patent owner said General Counsel Bill Middleton has resigned and that it will search for a new chief intellectual-property attorney.

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