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Canada Stocks Fall as Energy, Industrial Drop Before Fed Meeting

Canadian stocks fell from a two-year high, as energy and industrial shares dropped before the U.S. Federal Reserve meets to consider extending monetary stimulus.

Canadian Natural Resources Ltd. and Advantage Oil & Gas Ltd. dropped at least 1.7 percent as natural gas prices slid. Canadian Pacific Railway Ltd. fell 1.3 percent to pace losses among industrial shares after Pershing Capital Management LP cut its stake in the company by four percentage points. Taseko Mines Ltd. added at least 8.3 percent as miners advanced.

The Standard & Poor’s/TSX Composite Index fell 27.58 points, or 0.2 percent, to 13,371.84 at 4 p.m. in Toronto. The gauge rallied 2 percent last week to the highest since July 2011. It’s risen 4.6 percent in October, poised for its best month in two years. Trading volume was 9 percent below the 30-day average at this time of day.

“The market is somewhat directionless,” Brian Huen, the Toronto-based managing partner at Red Sky Capital Management Ltd., said by phone. His firm oversees C$225 million ($215 million). “We have lots of earnings coming out later this week and the FOMC meeting, and that’s what going to start driving investor sentiment. Until we get more news flow, I think we’re going to be range-bound.”

Fed, Earnings

The benchmark index swung between a gain of 0.1 percent and a drop of 0.2 percent today, with seven of 10 main groups retreating. The gauge had advanced eight of the nine sessions prior to today.

The Federal Open Market Committee starts a two-day meeting tomorrow to consider when to start trimming $85 billion of bond purchases that have helped bolster global equities. A report today showed factory production in the U.S. rose less than forecast last month, reviving prospects for an extension of economic stimulus by the Fed.

Some 50 companies in the S&P/TSX will report earnings in the next four days, including Barrick Gold Corp., Suncor Energy Inc. and Bombardier Inc.

Canadian consumer confidence fell for a fourth straight week, the Bloomberg Nanos Canadian Confidence Index showed today. The weekly measure of the economic mood of Canadians dropped to 57.7 in the seven days through Oct. 25, from 58.0 the previous week.

Consumer staples stocks retreated 0.6 percent, dragged lower by Maple Leaf Foods Inc., which fell 3.2 percent to C$15.47.

Railroad Decline

Industrial shares halted a six-day rally, sliding 0.8 percent. Canadian Pacific fell from an all-time high, retreating 1.3 percent to C$148.17. Bill Ackman’s Pershing Square completed a previously announced sale of the railway operator’s shares, reducing its to 9.8 percent from 13.8 percent in July. Canadian National Railway Co. dropped 1 percent to C$114.03.

Bombardier Inc., Canada’s largest plane maker, dropped 1.9 percent to C$5.27 after a UBS analyst reported that the new CSeries aircraft has logged fewer test flight hours than the bank estimates are needed before the planes can be shipped.

Energy stocks fell 0.5 percent, led lower by gas producers. Canadian Natural Resources slid 1.9 percent to C$32.68 and Advantage Oil & Gas fell 1.7 percent to C$4.15. Natural gas prices plummeted 3.7 percent.

Atlantic Power Corp. plunged 6.2 percent to C$5 for its biggest slide since June. Bank of Nova Scotia cut its rating on the power generation company’s stock to underperform.

Raw materials producers gained 0.2 percent, reversing an earlier drop of as much as 0.7 percent for the best performance in the benchmark index. Gold advanced for the third straight session on speculation the Fed will delay tapering.

Detour Gold rose 3.8 percent to C$9.12 and Eldorado Gold Corp. gained 3 percent to C$7.49. Taseko Mines jumped 8.3 percent to C$2.73.

Fairfax Financial Holdings Ltd., which has an investment portfolio worth $24.1 billion, jumped 1.2 percent to C$473.58. The Toronto-based insurer and financial services company climbed to the highest level since 1999 after investments in Irish banking and Canadian cattle feed surged, more than offsetting any potential loss from a $4.7 billion bid for smartphone maker BlackBerry Ltd.

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