Canadian Stocks Retreat a Fifth Day as Crude Oil Futures Drop
Canadian stocks declined for a fifth day, erasing their 2011 gain, as energy stocks fell on lower crude-oil prices and financial companies dropped after the country reported a 21 percent plunge in building permits.
Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, lost 2.2 percent as crude dropped. Bank of Nova Scotia (BNS), the country’s third-biggest lender by assets, slipped 1.2 percent after Statistics Canada said building permits sank the most in five years in April. Sino-Forest Corp., the forestry company accused of manipulating financial data by a short seller, gained 16 percent after tumbling 71 percent in the previous two sessions.
The Standard & Poor’s/TSX Composite Index (SPTSX) decreased 199.25 points, or 1.5 percent, to 13,318.66. Twenty-four of 248 stocks advanced, the fewest since March 10.
“There’s no doubt the economic news lately not only in the U.S. but in many other parts of the world has not been so good,” said Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, which oversees about C$600 million ($613 million). “Everybody’s a little bit nervous about what we’ll see in the next six months.”
The S&P/TSX fell 2 percent last week, trimming its 2011 gain to 0.6 percent, as the U.S. unemployment rate climbed to the highest since December. The U.S. accounted for 75 percent of Canadian exports last year, according to Statistics Canada. The index’s five-day slide is the longest since Jan. 10.
Trading of put options to sell the iShares MSCI Canada Index Fund climbed to a four-month high of 1,550 contracts today, 14 times the four-week average.
Crude futures declined 1.2 percent to a two-week low in New York as traders speculated slower economic growth will limit demand.
Suncor dropped 2.2 percent to C$38.75. Penn West Petroleum Ltd. (PWT), a western Canadian oil and gas producer, lost 3.8 percent to C$23.87. Enbridge Inc. (ENB), Canada’s largest pipeline company, slipped 2.1 percent to C$30.98.
Oilfield-services company Trinidad Drilling Ltd. (TDG) decreased 8.5 percent to C$8.74. Shares of the Calgary-based company have sunk 20 percent since May 31, when it reported first-quarter earnings that missed the average analyst estimate.
The S&P/TSX Financials Index slumped to a four-month low after building permits fell more than all 13 economists in a Bloomberg survey had forecast. Scotiabank dropped 1.2 percent to C$57.77. Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 1.8 percent to C$80.21. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, declined 1.7 percent to C$16.16.
Sino-Forest, which operates in China, rose 16 percent, the most since 2008, to C$6.10 in Toronto Stock Exchange trading after publishing documents on its website that it says support its reported land ownership. On June 5, Carson Block, the founder of Hong Kong-based Muddy Waters Research, said the company’s disclosures of timber holdings do not match city records.
Sino-Forest shares remain down 66 percent since June 1.
Companies with operations in Peru retreated after Ollanta Humala claimed victory in the country’s presidential election. Humala has called for greater state control over natural resources.
Teck Resources Ltd. (TCK/B), which owns an interest in a copper and zinc mine in Peru, fell 3.6 percent to C$47.71. Teck, Canada’s largest base-metals and coal producer, extended its losses after Claudia Onetto, a company spokeswoman, said heavy rains have forced the closure of a copper mine in Chile.
The S&P/TSX Consumer Discretionary Index retreated to an eight-month low. Tim Hortons Inc. (THI), Canada’s largest fast-food chain, fell for a fifth day, the longest streak since October, dropping 2.6 percent to C$43.31.
Directory publisher Yellow Media Inc. decreased 6 percent to a record-low C$3.59 after Aravinda Galappatthige, an analyst at Canaccord Financial Inc., said shares may fall further as revenue from print products slides.
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