Canadian Stocks Complete Weekly Decline as Gold Shares Fall

Canadian stocks fell, completing a third straight weekly decline, as gold producers dropped after the U.S. Dollar Index erased most of the day’s loss.

Barrick Gold Corp., the world’s largest gold producer, decreased 1 percent as the metal finished its biggest weekly slump since Sept. 23. TransCanada Corp., the owner of the country’s largest pipeline system, advanced 2.4 percent after Chief Executive Officer Russ Girling said it will fund a rerouted Keystone XL pipeline without issuing more debt.

The Standard & Poor’s/TSX Composite Index slipped 22.99 points, or 0.2 percent, to 11,892.44, extending its weekly decline to 3.1 percent.

“We are caught in this purgatory; the market doesn’t know what it wants to do,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5 billion ($4.9 billion). “The fears of Europe have compressed valuations on every stock out there.”

The index dropped the most since Sept. 23 this week as bond yields increased in Italy, Spain and France, indicating concern the European debt crisis’s spread will continue. Raw-materials companies led the retreat as the U.S. dollar climbed against 15 of 16 other major currencies.

Gold erased most of its gains today, after advancing as much as 1.1 percent on the Comex in New York, as the U.S. Dollar Index pared its loss to 0.3 percent, after falling as much as 1 percent. Barrick slipped 1 percent to C$50.17. Eldorado Gold Corp., Canada’s fifth-largest gold producer by market value, retreated 2.1 percent to C$17.62.

Nevada Miner

Great Basin Gold Ltd., which mines in Nevada, slumped 6.9 percent to C$1.22, the lowest since March 2009. Leon Esterhuizen, an analyst at Royal Bank of Canada, cut his rating on the shares to “sector perform” from “outperform.”

Pipeline companies in the S&P/TSX rose for a fourth day. Enbridge Inc., Canada’s biggest pipeline company, rose 0.7 percent to a record C$36.19, advancing for a third day after saying it will buy a stake in the Seaway pipeline system. At least four analysts boosted their 12-month price estimates on the shares yesterday.

TransCanada gained 2.4 percent to C$41.57. The company fell to its lowest market value relative to Enbridge’s since 2000 yesterday after the U.S. State Department delayed approval of the proposed Keystone XL line due to environmental concerns.

Rare Earths

Neo Material Technologies Inc. surged 10 percent to C$7.83. The rare earths and zirconium products maker may have jumped because Mark Smith, chief executive officer of Molycorp Inc., said he may buy a company in that industry, Matthew Gowing, an analyst at Mackie Research Capital Corp., said in a telephone interview. Molycorp is considering companies listed on the TSX, Smith said.

Canadian National Railway Co., the country’s largest railroad, advanced for the first time this week, increasing 1.6 percent to C$80.02 as crude oil fell to a seven-day low.

The S&P/TSX Commercial Banks Index climbed after closing at the lowest relative to earnings since March 2009 yesterday. Royal Bank of Canada, the country’s largest lender by assets, rose 1.1 percent to C$44.42. Bank of Nova Scotia, the third-biggest bank, gained 1.2 percent to C$49.89.

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