Canadian stocks rose a second day, reaching a six-year high, as investors weighed company earnings and the Federal Reserve said the economy is rebounding after growth stalled in the first quarter.
CGI Group Inc. rose 3.8 percent after reporting better-than-projected earnings. Yamana Gold Inc. touched a five-year low after first-quarter sales and earnings were short of estimates. Legacy Oil & Gas Inc. and Cenovus Energy Inc. retreated at least 1.1 percent as crude prices fell for the first time in three days.
The Standard & Poor’s/TSX Composite Index rose 68.76 points, or 0.5 percent, to 14,651.87 at 4 p.m. in Toronto, the highest since June 2008. The equity gauge climbed 2.2 percent in April for a 10th month of gains, the longest streak since 1983.
The Federal Reserve’s policy committee pared monthly asset buying to $45 billion, in line with economists’ forecasts, and said further reductions in “measured steps” are likely. The U.S. economy is gaining momentum as consumers spend more, the central bank said.
“It seems like everything’s staying the course with the Fed direction,” said Youssef Zohny, portfolio manager at Stenner Investment Partners of Richardson GMP Ltd. in Vancouver. Richardson GMP manages about C$26 billion ($23.8 billion). “The employment numbers in the U.S. continue to improve so that will continue to lead to Fed tapering.”
The U.S. economy grew at a 0.1 percent annualized rate in the first quarter, falling short of the median forecast of 1.2 percent growth according to a survey of 83 economists by Bloomberg. Canada’s gross domestic product rose for a second month in February led by gains among commodity producers.
“We had a bunch of economic numbers out this morning and people are just trying to make sense of what it all means,” said Brian Huen, managing partner at Red Sky Capital Management Ltd. in Toronto. His firm manages about C$250 million.
CGI Group advanced 3.8 percent to C$39.52, the highest since November, after posting second-quarter adjusted earnings of 72 Canadian cents a share compared with estimates for 69 cents. The technology-services company reported a backlog of signed orders of C$19.5 billion, up 8.3 percent compared with a year ago.
Technology shares rose 1.2 percent as a group. Trading volume of S&P/TSX companies was in line with the 30-day average.
Methanex Corp. sank 2.9 percent to C$67.89. Steve Hansen, analyst at Raymond James Financial Inc. in Vancouver, lowered his rating for Methanex to market perform, the equivalent of a hold, due to “surprisingly lackluster” first-quarter results. The company reported adjusted earnings of $1.65 a share yesterday, short of analysts’ projections of $1.90.
The S&P GSCI Index, which tracks a basket of commodities, dropped 1 percent for the biggest decrease in a month as crude and copper declined.
Yamana Gold dropped 1.8 percent to C$8.21 and touched C$7.93, the lowest in five years. The company said it’s in talks with private Brazilian groups to sell a majority stake in its Ernesto/Pau-a-Pique mine in Brazil. Peter Marrone, chief executive officer at Yamana, said the company wants to at least recoup its investment.
Legacy Oil & Gas retreated 2.7 percent to C$8.53 and Cenovus Energy lost 1.1 percent to C$32.65. West Texas Intermediate crude sank to a four-week low as U.S. supplies extended a record high.