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Canadian Stocks Fall as U.S. Payroll Gains Trail ADP Estimate

Canadian stocks fell for the first time in six days after U.S. payrolls rose less than a private report had signaled and German factory orders declined the most in almost three years.

Talisman Energy Inc., an energy producer with operations in North America, the North Sea and Indonesia, decreased 5.4 percent after an analyst at Sanford C. Bernstein & Co. cut his share-price estimate. Royal Bank of Canada, the country’s biggest lender by assets, declined 0.6 percent as Canada’s unemployment rate increased. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, lost 2.3 percent after extending production cuts.

The Standard & Poor’s/TSX Composite Index slipped 48.76 points, or 0.4 percent, to 12,188.64, reducing its weekly rally to 2 percent.

“People had expectations for jobs to surprise to the upside” in the U.S., Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Asset Management, said in a telephone interview from Toronto. The unit of Manulife Financial Corp. oversees about $217 billion. “So there wasn’t any reason to jump up and down and be overly enthusiastic about this jobs number. Global growth is moderating.”

The index climbed this week as raw-materials and energy stocks gained on economic data indicating strengthening global manufacturing and ADP Employer Services’ U.S. payrolls estimate. Resources companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data. The U.S. accounted for 75 percent of Canadian exports in 2010, according to Statistics Canada.

U.S. Jobs

U.S. nonfarm employment increased by 200,000 in December as private payrolls grew by 212,000, the Labor Department said today in Washington. ADP had estimated a gain of 325,000 jobs yesterday. Canada’s unemployment rate rose to 7.5 percent from 7.4 percent in November, Statistics Canada said today.

Orders from German factories slumped 4.8 percent in November, the Economy Ministry said today in Berlin. Economists had forecast a decline of 1.8 percent, according to the median estimate in a Bloomberg survey.

The S&P/TSX Energy Index retreated as oil futures fell for a second day on the New York Mercantile Exchange. Penn West Petroleum Ltd., a western Canadian oil and gas producer, slipped 2.1 percent to C$21. Oil-sands developer MEG Energy Corp. declined 2.5 percent to C$40.64.

Talisman Energy dropped 5.4 percent to C$12.68. Bob Brackett, an analyst at Bernstein, reduced his 12-month share-price estimate to C$14 from C$15, saying in a note to clients that warm weather will weaken demand for natural gas.

Banks Slide

Canadian bank and insurance stocks fell. Royal Bank dropped 0.6 percent to C$52.05. Canadian Imperial Bank of Commerce, the country’s fifth-largest lender by assets, lost 0.7 percent to C$74.65. Intact Financial Corp., Canada’s biggest property and casualty insurer, decreased 1.9 percent to C$57.39.

Potash Corp. lost 2.3 percent to C$42.94 after saying it will shut its Allan, Saskatchewan, mine for four weeks beginning Feb. 4. The company halted production at its Rocanville mine for six weeks on Dec. 25 and plans to suspend its Lanigan mine for eight weeks on Jan. 8.

Gold futures retreated for the first time in five days as the U.S. Dollar Index climbed to the highest since 2010. Goldcorp Inc., the world’s second-largest producer of the metal by market value, lost 1.6 percent to C$45.20. Iamgold Corp., which mines in West Africa, South America and Quebec, dropped 2.6 percent to C$17.03.

Magna International Inc., Canada’s largest auto-parts maker, rallied 7.3 percent to C$37.28. In a note dated yesterday, Neil Forster, an analyst at Bank of Nova Scotia, raised his earnings estimates for the company and boosted his 12-month share-price forecast to $61 from $60. Forster cited General Motors Co. and Ford Motor Co.’s estimates for sales increases this year in a note to clients.

Rare Element Resources Ltd., which is developing a rare-earths project in Wyoming, soared 18 percent to C$5.83 to extend its weekly surge to 77 percent, the most in three years. The company said Jan. 4 that it had more resources on its property than previously disclosed.

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