Canadian Stocks Decline as Gold Shares Post 10th Loss in 11 Days

Canadian stocks fell, trimming a weekly gain, as gold shares dropped for the 10th time in 11 days following slower-than-estimated U.S. inflation and before European finance ministers meet to discuss a Greek bailout.

Barrick Gold Corp., the world’s largest gold producer, dropped 2.4 percent as the metal declined. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, rose 0.8 percent as crude oil and natural gas advanced. Enbridge Inc., Canada’s largest pipeline company, dropped 4.1 percent after reporting earnings that missed estimates.

The S&P/TSX Composite Index decreased 27.29 points, or 0.2 percent, to 12,458.30, reducing its weekly increase to 0.6 percent. The gauge erased gains after the Wall Street Journal reported the International Monetary Fund will contribute less to a Greek bailout than to previous rescues.

“All eyes are on Greece,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($55 million). “It’s obviously getting people nervous. Greece is not the only problem in the EU. You’ve got Portugal, you’ve got Spain that are potential problems. If you can’t figure one piece of the puzzle out that’s so small, how are you going to figure out those other problems?”

The index has advanced eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

Smaller Contribution

The IMF is likely to contribute 10 percent of a 130 billion-euro ($171 billion) aid package for Greece, the Wall Street Journal said today, citing people familiar with the matter. The organization paid 27 percent of Greece’s 110 billion-euro bailout in 2010, the newspaper said.

Stocks had risen around the world earlier after Italian Prime Minister Mario Monti, German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism today that an agreement on a Greece bailout can be reached on Feb. 20.

The S&P/TSX Gold Index slumped 1.6 percent, extending its loss since Feb. 2 to 6.3 percent. U.S. consumer prices increased 0.2 percent in January, the Labor Department said today. Economists forecast a 0.3 percent rise in the inflation gauge, according to the median estimate in a Bloomberg survey.

Barrick dropped 2.4 percent to C$46.83. Agnico-Eagle Mines Ltd., which operates in Canada, Mexico and Finland, declined 3.6 percent to C$35.27. NovaGold Resources Inc., which is developing projects in Alaska and British Columbia, lost 3.7 percent to C$8.41.

Metals, Coal

Teck Resources Ltd., Canada’s largest base-metals and coal producer, decreased 2.9 percent to C$38.30 as copper retreated for a sixth day on the Comex in New York, the longest slump since August.

Natural-gas futures on the New York Mercantile Exchange extended their two-day surge to 11 percent a day after the U.S. reported a bigger drop in inventories than most analysts in a Bloomberg survey had forecast. Crude oil climbed to a nine-month high.

Canadian Natural rose 0.8 percent to C$37.38. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, gained 1.6 percent to C$13.60.

PetroBakken Energy Ltd., a western Canadian oil and gas producer, jumped 5.3 percent to C$15.42 after agreeing to sell some of its Saskatchewan assets to Crescent Point Energy Corp. for C$427 million. Petrobank Energy & Resources Ltd., PetroBakken’s largest shareholder, rose 5.3 percent to C$15.38. Crescent Point dropped 1.9 percent to C$45.59.

Strike in Yemen

Calvalley Petroleum Inc., which operates in Yemen, soared 19 percent to C$1.60 after plunging 19 percent Feb. 14. Workers have suspended a strike at the Masila oil field, which had disrupted oil transportation in the country, according to a government official who declined to be identified because he is not authorized to speak on the matter.

Enbridge, Keyera Corp., and Fairfax Financial Holdings Ltd. retreated after reporting earnings that trailed analysts’ estimates in Bloomberg surveys.

Enbridge lost 4.1 percent, the most since February 2009, to C$37.58 after reporting fourth-quarter profit that trailed the average analyst estimate by 6.1 percent, excluding certain items. The company also said Noverco Inc. plans to sell a third of its stake in Enbridge. Caisse de Depot et Placement du Quebec and Enbridge together own Noverco.

Natural Gas

Keyera, a natural gas marketing company, slumped 5.6 percent, the most since March 2009, to C$44.75 after reporting a fourth-quarter loss. All five analysts in a Bloomberg survey had forecast a profit.

Fairfax Financial, an insurance holding company, slipped 4.3 percent to C$400 after saying it lost $771.5 million in the fourth quarter. The loss was the most in a quarter since at least 2000.

Propane distributor Superior Plus Corp. jumped 8.6 percent to C$6.43 after reporting fourth-quarter financial results. Unseasonably warm weather in North America reduced cash flow less than analysts may have forecast, Damir Gunja, an analyst at Toronto-Dominion Bank, said in a note to clients.

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