Canadian stocks fell for a third day as financial companies dropped amid intensifying concern that Greece may default while mining companies slumped after the U.S. dollar touched the highest level since February.
Toronto-Dominion Bank, Canada’s second-largest lender by assets, declined 2.1 percent as Greek two-year bond yields surged above 69 percent. Goldcorp Inc., the world’s second-biggest gold producer by market value, decreased 4.3 percent as the metal slipped. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 3.2 percent after an analyst at Bank of Montreal cut his rating on the company.
The Standard & Poor’s/TSX Composite Index retreated 238.71 points, or 1.9 percent, to a three-week low of 12,148.83 after falling 2.3 percent on Sept. 9. The index last dropped at least 238 points on consecutive days in November 2008.
“It could lead to not only a big crisis for banks over there but also a potential crisis for North America, because of the interconnectedness of all of the financial institutions around the world,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees C$52.5 million ($52.7 million). “If Greece goes down, it’s not going to be one domino falling. There’s a lot of dominoes falling behind it.”
The S&P/TSX has slumped 15 percent since April 5 as the European debt crisis worsened. On Sept. 9, three officials with German Chancellor Angela Merkel’s coalition said the government is preparing plans to shore up banks in the event that Greece defaults. The officials declined to be named because the deliberations are private.
Moody’s Investors Service may cut the ratings of BNP Paribas SA, Societe Generale SA and Credit Agricole SA this week because of their Greek holdings, two people with knowledge of the matter said. The people declined to be identified because the matter is confidential.
All eight S&P/TSX banks dropped. TD lost 2.1 percent to C$72.65. Royal Bank of Canada, its larger domestic rival, decreased 2.7 percent to C$46.20 after closing at a two-year low Sept. 9. Manulife Financial Corp., North America’s fourth-biggest insurer, retreated 2.4 percent to C$12.02 as the S&P/TSX Insurance Index fell from the lowest close since April 2009.
Dundee Corp., Ned Goodman’s holding company, rallied 9 percent, the most since November, to C$22.51 after saying it will buy back up to 10 million shares at C$23.75 a share.
Gold and silver futures fell as retreating world equity markets forced some investors to sell commodities to cover losses.
“You can’t buy groceries with gold,” Barry Schwartz, a money manager at Baskin Financial Services Inc., said in a telephone interview. The firm oversees C$420 million. “If you think things are going to get worse, you’re going to liquidate all your assets.”
The S&P/TSX Materials Index retreated the most since Aug. 4. Goldcorp dropped 4.3 percent to C$52.55. Barrick Gold Corp., the world’s largest producer of the metal, slipped 2.8 percent to C$52.87. China Gold International Resources Corp Ltd. sank 14 percent to C$4.25.
First Majestic Silver Corp., which operates in Mexico, plunged 8.1 percent to C$20.69 as silver tumbled 3.4 percent. Silver Standard Resources Inc., which also produces the metal in Latin America, slumped 9.6 percent to C$26.57. Silvercorp Metals Inc., which operates in China, declined 7.3 percent to C$7.78 after the British Columbia Securities Commission said Sept. 9 it is investigating the assertions of fraud against the company sent anonymously to regulators.
Copper futures retreated 0.9 percent to a one-month low.
Teck Resources Ltd., Canada’s largest base-metals and coal producer, fell 3.6 percent to C$39.13. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, dropped 5.2 percent to C$19.72, extending its three-day tumble to 15 percent.
Suncor and Canadian Natural Resources Ltd. declined after Randy J. Ollenberger, an analyst at BMO, reduced his ratings on the shares to “market perform” from “outperform.” In notes to clients, Ollenberger said crude prices may fall due to the “uncertain economic environment.”
Suncor lost 3.2 percent to C$28.51, the lowest close since March 2009. Canadian Natural decreased 1.8 percent to C$33.53. Trican Well Service Ltd., the country’s largest oilfield-services company, retreated 5.9 percent to C$18.56 after Alan Laws, another analyst at BMO, cut his rating on Trican’s industry to “market perform.”
Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, fell 2 percent to C$55.96 after the U.S. cut its corn-stocks forecast by less than most analysts in a Bloomberg survey had estimated.