Canadian Stocks Advance as Commodity Prices Rally; RIM Tumbles
Canadian stocks rose for the first time in three days as industrial and raw-material shares advanced amid a rally in commodities while Research In Motion Ltd. sank after UBS AG said its new smartphone is too expensive.
Canadian Pacific Railway Ltd. (CP) increased 3.1 percent after reporting fourth-quarter earnings in line with analysts’ estimates. Goldcorp Inc. and Kinross Gold Corp. advanced at least 1.3 percent as the price of the metal rallied the most in two weeks. Premier Gold Mines Ltd. (PG) added 1.7 percent after agreeing to sell one of its assets. RIM sank 3.4 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 14.65 points, or 0.1 percent, to 12,830.56 in Toronto. The benchmark gauge has gained 3.2 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 raw-material producers contributed most to gains in the S&P/TSX as six of 10 industries advanced. Trading volume was 3.6 percent higher than the 30-day average.
Canadian Pacific climbed 3.1 percent to a record C$116.22 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$36.11 and Kinross advanced 1.3 percent to C$8.47. Gold for April delivery climbed 0.5 percent to settle at $1,662.70 an ounce in New York.
U.S. Federal Reserve Chairman Ben S. Bernanke and the Federal Open Market Committee began two days of meetings today, with the central bank expected to continue its commitment to asset buying until the first quarter of 2014.
Silvercorp Metals Inc. gained 3.5 percent to C$4.45 and Fortuna Silver Mines Inc. added 5.8 percent to C$4.21 as silver for March delivery rose 1.3 percent to $31.184 an ounce in New York.
The U.S. Mint resumed sales of American Eagle silver coins yesterday for the first time in more than a week after selling out of the collectibles earlier.
Premier Gold increased 1.7 percent to C$3.58 after agreeing to sell its position in Premier Royalty Inc., 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 2.1 percent to C$11.81.
RIM, based in Waterloo, Ontario, slumped 3.4 percent to C$15.71, paring earlier losses of as much as 9.3 percent.
Phillip Huang, an 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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