Canadian stocks rose for a second day amid better-than-estimated U.S. economic data and as European shares rebounded on gains in Italian bonds.
Canadian Pacific Railway Ltd. jumped 3.2 percent and Canadian National Railway Co. climbed 1 percent to pace gains in transportation shares. Goldcorp Inc. fell 1.6 percent and Barrick Gold Corp. lost 1.4 percent as gold futures slipped for the first time in three days. Financial shares added 0.4 percent ahead of banks’ earnings announcements tomorrow.
The Standard & Poor’s/TSX Composite Index rose 71.95 points, or 0.6 percent, to 12,732.39 at 4 p.m. in Toronto. The S&P/TSX has risen 2.4 percent this year.
“People are feeling a little bit confident,” Peter Buchanan, senior economist at CIBC World Markets, said in a phone interview. “We’ll have to see if that confidence is warranted. Gold has traditionally been an inflationary hedge, but in the last year or two demand has clearly been driven by recession fears.”
Gold futures fell 1.2 percent to settle at $1,595.70 an ounce on the Comex in New York today. The metal is set to drop for a fifth month, the longest run of monthly losses since 1997, on signs global economic growth is improving, curbing demand for gold as a protection of wealth.
Goldcorp declined 1.6 percent to C$33.90 and Barrick Gold slid 1.4 percent to C$31.63.
Equities advanced as U.S. data showed contracts to purchase previously owned homes climbed more than forecast in January. Orders for U.S. durable goods excluding transportation equipment increased in January by the most in a year. Federal Reserve Chairman Ben S. Bernanke said the central bank has the “tools” necessary to scale back record stimulus and avert a rise in inflation expectations, in congressional testimony that was identical to his remarks yesterday.
Stocks in Europe rebounded as Italy sold 6.5 billion euros ($8.5 billion) of five- and 10-year bonds in its first auction following inconclusive election results that pushed yields to a four-month high yesterday.
Canadian Pacific Railway jumped 3.2 percent to C$124.58 and Canadian National Railway climbed 1 percent to C$101.68. Jefferies Group Inc. analyst Peter Nesvold called 2013 “the Year of Transports” in a note today, citing strength in auto sales and housing prices, increasing diesel consumption and better-than-anticipated airfreight volumes.
Royal Bank of Canada rose 0.4 percent to C$63.48. Toronto-Dominion Bank added 0.2 percent to C$84.29. Both are scheduled to report earnings tomorrow. Royal Bank, Toronto-Dominion and the country’s four other main lenders are expected to post a 6.9 percent increase in per-share profit excluding some items for the quarter, according to Darko Mihelic, an analyst at Cormark Securities Inc. in Toronto.
The nation’s banks, ranked the world’s soundest by the World Economic Forum for five straight years, face a consumer-lending slowdown as Canadians struggle with record debt levels and a cooling housing market.
First Quantum Minerals Ltd. rose 2.1 percent to C$19.27 after the company extended its C$5.1 billion ($5 billion) hostile takeover bid for Canada’s Inmet Mining Corp. by 12 days. Inmet shareholders will now have until March 11 to accept the cash-and-stock offer, Vancouver-based First Quantum said today in a filing. The bid was previously due to expire today. Inmet gained 2.4 percent to C$66.89.