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 2.6 percent as crude dropped. Royal Bank of Canada (RY), the country’s biggest lender by assets, slipped 1.4 percent after Statistics Canada said building permits sank the most in five years in April. Sino-Forest Corp. (TRE), the forestry company accused of manipulating financial data by a short seller, surged 55 percent after tumbling 71 percent in the previous two sessions.
The Standard & Poor’s/TSX Composite Index decreased 112.87 points, or 0.7 percent, to 13,429.04 at 11:29 a.m. in Toronto.
“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.
Crude futures declined as much as 1.4 percent in New York as traders speculated slower economic growth will limit demand.
Suncor dropped 2.6 percent to C$38.57. Penn West Petroleum Ltd., a western Canadian oil and gas producer, lost 2.8 percent to C$24.13. Enbridge Inc. (ENB), Canada’s largest pipeline company, slipped 2.4 percent to C$30.86.
Financial stocks retreated after building permits fell more than all 13 economists in a Bloomberg survey had forecast. Royal Bank dropped 1.4 percent to C$54.45. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, declined 2.1 percent to C$16.10. Sun Life Financial Inc. (SLF), Canada’s third-biggest insurance company, lost 1.3 percent to C$28.98 after touching a six-month intraday low of C$28.84.
Sino-Forest, which operates in China, soared 55 percent, the most since 1994, to C$8.09 after pledging to release proof of land ownership. On June 5, Carson C. Block, the founder of Hong Kong-based Muddy Waters Research, said the company’s disclosures of timber holdings do not match city records.
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), Canada’s largest base-metals and coal producer, fell 1.3 percent to C$48.87. Bear Creek Mining Corp. (BCM), which explores for precious metals in the country, dropped 5.8 percent to C$5.84. Rio Alto Mining Ltd. (RIO) slumped 16 percent to C$1.99 after tumbling as much as 26 percent, the most intraday since August 2009.
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