Canada Stocks Fall to Lowest in 2014 on Factory Reports

Canadian stocks declined, sending the benchmark index to the lowest level of the year, as energy and industrial shares slumped after manufacturing gauges in China and the U.S. weakened.

Energy producers retreated as Atlantic Power Corp. plunged 7.9 percent. BlackBerry Ltd. dropped 4.5 percent for a third straight day of losses. Cameco Corp. tumbled 5.3 percent after Canaccord Genuity Corp. analysts cut the stock’s rating. Semafo Inc. jumped 2.2 percent after Macquarie North America analysts said it may be a target for mergers and acquisitions.

The Standard & Poor’s/TSX Composite Index decreased 208.74 points, or 1.5 percent, to 13,486.20 at 4 p.m. in Toronto. The gauge erased its gain for the year, falling 1 percent for 2014. Trading in S&P/TSX stocks was 2.8 percent higher than the 30-day average at the close.

“There’s some worry about what’s going on in emerging markets and if it’s now spreading to developed markets and what the ramifications of this will be,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.5 billion ($4.1 billion). “There’s just a general risk aversion that has come into the market today.”

Manufacturing Slows

The Institute for Supply Management’s factory index, a measure of U.S. manufacturing activity, decreased to 51.3 in January from 56.5 the prior month, the Tempe, Arizona-based group’s report showed today. Readings above 50 indicate expansion.

China’s Purchasing Managers’ Index decreased in January as output and orders slowed. The gauge was at 50.5 last month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Feb. 1 in Beijing. The reading in December was at 51. A number above 50 indicates expansion.

Gold for April delivery rallied 1.6 percent as declining global equity markets boosted demand for haven assets. The MSCI All-Country World Index dropped 1.6 percent, while emerging-markets shares slid 1.1 percent.

All 10 main industries in the S&P/TSX retreated at least 1 percent. Technology shares tumbled 2.9 percent, while industrials lost 2 percent. Consumer-discretionary shares and financials declined at least 1.3 percent.

Atlantic Power

Utilities slid 1.4 percent as Atlantic Power plunged 7.9 percent to C$2.69, an all-time low. Just Energy Group Inc. fell 4.6 percent to C$7.45 and ATCO Ltd. slipped 2.6 percent to C$48.55.

BlackBerry declined 4.5 percent to C$10.08, extending a three-day losing streak to 9.4 percent. Last week, a person familiar with the matter said Lenovo Group Ltd. considered the Motorola Mobility handset unit a better fit for the company than BlackBerry. Lenovo agreed to buy Motorola’s handset unit from Google Inc. for $2.91 billion. Lenovo’s chief financial officer said last year the company was considering a possible deal with BlackBerry.

Cameco tumbled 5.3 percent, the biggest drop since March 2012, to C$22.41. Canaccord analyst Gary Lampard downgraded the uranium explorer’s rating to sell from hold.

Semafo Inc. jumped 2.2 percent to C$3.67. Macquarie analysts led by Michael Gray wrote that the gold mining company could potentially be bought by producers of the precious metal such as Agnico Eagle Mines Ltd., Argonaut Gold Corp. and B2Gold Corp.

B2Gold climbed 2.7 percent to C$2.70. Argonaut increased 1.8 percent to C$5.11 and Agnico added 1.6 percent to C$35.21.

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