Canada Stocks Fluctuate as Gold Companies Gain While RIM Falls
Canadian stocks fluctuated between gains and losses as raw-material and industrial shares rose amid a rally in commodity prices while Research In Motion Ltd. (RIM) sank after UBS AG said its new smartphone is too expensive.
Canadian Pacific Railway Ltd. (CP) increased 4.4 percent after reporting fourth-quarter earnings in line with analysts’ expectations. Goldcorp Inc. and Kinross Gold Corp. advanced at least 1.2 percent as the price of the metal rallied from a two- week low. Premier Gold Mines Ltd. (PG) added 1.1 percent after agreeing to sell one of its assets. RIM sank 7.1 percent a day before it unveils its BlackBerry 10 line of smartphones in a bid to recapture market share.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 3.40 points, or less than 0.1 percent, to 12,819.31 at 12:38 p.m. in Toronto. The benchmark gauge has gained 3.1 percent this year.
“We might be taking a bit of a pause here, we’ve been up a lot,” Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc., said from Toronto. His firm manages about $4 billion. “We’re a very narrow market in Canada, very commodities-focused. If people get very hot on the outlook for the global economy, the Canadian market will do well.”
Canada’s MLI Leading Economic Indicator rose 0.2 percent in December for a fifth straight gain, as Canadians benefited from rising stock prices and a U.S. rebound. The index is published by the Ottawa-based Macdonald-Laurier Institute.
Industrials and gold mining companies contributed most to gains in the S&P/TSX as five of 10 industries advanced. Trading volume was 11 percent higher than the 30-day average at this time of the day.
Canadian Pacific climbed 4.4 percent to a record C$117.67 after posting fourth-quarter adjusted earnings of C$1.28 a share that were in line with analysts’ estimates. Chief Executive Officer Hunter Harrison, installed by investor William Ackman last June after winning a proxy battle, is targeting inefficiencies at the railroad.
Goldcorp gained 1.7 percent to C$36.10 and Kinross advanced 1.2 percent to C$8.46. Gold for April delivery climbed 0.5 percent to $1,663.90 an ounce in New York, heading for its biggest increase in two weeks.
U.S. Federal Reserve Chairman Ben S. Bernanke and the Federal Open Market Committee begin two days of meetings today, with the central bank expected to continue its commitment to asset buying until the first quarter of 2014.
Premier Gold increased 1.1 percent to C$3.56 after agreeing to sell its position in Premier Royalty Inc. (NSR), a subsidiary with royalties from gold mines in Canada, the U.S., South Africa and Argentina, to Sandstorm Gold Ltd. for C$70.7 million. Sandstorm rose 2 percent to C$11.80.
RIM, based in Waterloo, Ontario, slumped 7.1 percent to C$15.12. Shares of the technology company have dropped 15 percent over the past three days.
Phillip Huang, analyst with UBS Securities, said pricing for the new mobile phones will be too high for emerging markets, and RIM will have difficulty drawing customers away from Google Inc.’s Android and Apple Inc.’s iPhone platforms.
“RIM is attempting a comeback, but it appears late, at least in its current form,” he said in a note to clients today. “We remain skeptical of a dramatic turnaround.”
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