Canada Stocks Fall as European Economic Growth Trails Forecasts

Canadian stocks fell for the first time in six days, led by energy and base-metals producers, after the European Union reported a bigger slowdown in economic growth than most economists had forecast and U.S. homebuilding dropped.

Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, declined 2.4 percent as crude oil lost 1.4 percent. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 6.3 percent as the metal slumped in New York. Toronto-Dominion Bank, Canada’s second-biggest lender by assets, slipped 0.8 percent after an analyst at Macquarie Group Ltd. cut his rating on the shares.

The Standard & Poor’s/TSX Composite Index decreased 152.9 points, or 1.2 percent, to 12,530.71.

“The economic stats, they haven’t given us anything to get excited about,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “It’s certainly causing investors to pause a bit.”

The S&P/TSX surged 8.7 percent in the five days ending yesterday, the most since the beginning of the bull market in March 2009, as the U.S. reported a decline in initial jobless claims and a gain in retail sales. Crude oil jumped after sinking to a 10-month low, boosting energy stocks, the second-biggest part of the index.

European GDP

Gross domestic product in the 17 countries that use the euro rose 0.2 percent in the second quarter, the EU’s statistics office said, trailing most economists’ forecasts in a Bloomberg survey. Germany’s economy grew 0.1 percent, less than all 33 estimates.

U.S. housing starts fell to a 604,000 annual rate in July, down from a revised 613,000 in June, the Commerce Department said today in Washington. Building permits totaled 597,000, compared with a median forecast of 605,000 in a Bloomberg survey of economists.

In Canada, manufacturing sales dropped in June for a third month, Statistics Canada said today. The decline exceeded all 19 forecasts in a Bloomberg survey.

Sixty of 67 S&P/TSX energy companies declined. Canadian Natural lost 2.4 percent to C$36. Suncor Energy Inc., Canada’s biggest oil and gas producer, decreased 1.7 percent to C$31.89. Encana Corp., the country’s largest natural gas producer, retreated 3 percent to C$24.99 as the fuel slumped to a five-month low.

Base Metals

Base-metals and coal producers fell as copper futures lost 1 percent in New York.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, dropped 6.3 percent to C$23.05. Teck Resources Ltd., the country’s biggest company in the industry, slipped 3.8 percent to C$42.14. Quadra FNX Mining Ltd., which produces base metals in the U.S., Canada and Chile, sank 6.1 percent to C$12.10.

Grande Cache Coal Corp., which mines in Alberta, slumped 6.7 percent to C$6.81 after reporting first-quarter profit that missed the average estimate of analysts in a Bloomberg survey by 37 percent, excluding certain items.

Uranium producers declined after Ux Consulting Co. said prices of the nuclear fuel decreased 1.9 percent the week ending yesterday. Cameco Corp., the world’s largest uranium producer, fell 4.3 percent to C$22.35. Denison Mines Corp., which operates in Canada, the U.S. and Africa, dropped 7.7 percent to C$1.55.

Earnings Beat

Alacer Gold Corp., which mines in Turkey, rallied 7.9 percent to C$10.07 a day after reporting second-quarter earnings that beat the average estimate in a Bloomberg survey by 62 percent, excluding certain items. Lake Shore Gold Corp., which operates in Ontario, jumped 11 percent to C$2.17 after disclosing a new discovery at its Bell Creek Mine.

The country’s seven largest banks and three biggest insurers each fell after Sumit Malhotra, an analyst at Macquarie, said in a note to clients that banks’ 2012 earnings are likely to trail most other analysts’ estimates.

TD dropped 0.8 percent to C$76.26 after Malhotra cut his rating on the stock to “neutral” from “outperform.” National Bank of Canada, the country’s sixth-biggest lender by assets, declined 0.8 percent to C$72.81. Great-West Lifeco Inc., the country’s second-biggest insurer, lost 2.5 percent to C$22.68.

Sino-Forest Corp., the forestry company fighting a short seller’s assertions of financial manipulation, tumbled for a second day after saying the independent investigation it initiated into the assertions will take until the end of the year. The shares plunged 12 percent to C$5.34 after retreating 8.4 percent yesterday.

Directory publisher Yellow Media Inc. plunged 9.1 percent to C$1.10 after gaining 64 percent in the previous three days. Shares of the Verdun, Quebec-based company have slumped 82 percent this year on concern it will be unable to retain profitability as fewer people use printed phone books.

Yoga-wear retailer Lululemon Athletica Inc. declined 7.2 percent to C$53.26. Glen T. Senk, Urban Outfitters Inc.’s chief executive officer, said on a conference call yesterday that he is “a little concerned” about sales at the company’s Anthropologie chain of women’s clothing stores.

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