Canada Stocks Erase Gains as BlackBerry Tumbles on Sales Concern
Canadian stocks erased gains as the biggest plunge in BlackBerry shares in five weeks overshadowed speculation that Cyprus will reach a deal to prevent a financial collapse.
BlackBerry fell 8.1 percent after analysts raised concern about sales of its Z10 smartphone. Walter Energy Inc. rose 2.7 percent after saying it will close two mines to cut costs. Royal Bank of Canada and Bank of Nova Scotia gained at least 0.5 percent. Lululemon Athletica Inc. fell 3.7 percent after Credit Agricole lowered its rating on shares of the yoga-clothing maker.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 9.48 points, or less than 0.1 percent, to 1,2757.35 at 4 p.m. in Toronto, paring earlier gains of as much as 0.6 percent. The S&P/TSX fell 0.6 percent this week, a second weekly decline. Trading volume was 20 percent lower than the 30-day average.
BlackBerry plunged 8.1 percent to C$15.19 for the biggest decline since Feb. 13. The shares rose as much as 4.2 percent earlier. The Waterloo, Ontario-based smartphone maker began selling its latest product, the Z10, in the U.S. today, two months after its debut in other countries.
Ahead of the U.S. debut, analysts with Deutsche Bank AG checked inventory in the U.K. and Canada. Sales have been slow and store employees aren’t promoting the devices, the firm said in a report.
European and Cypriot officials are negotiating a solution to avert a financial collapse in the island nation after Russia spurned a bid for a loan and German lawmakers dismissed a rescue proposal.
Averof Neofytou, deputy president of Cyprus’s ruling Disy party, said he believes lawmakers will reach a deal today. The European Central Bank will withdraw funding from Cyprus’s lenders next week if the two sides fail to come to an agreement.
Royal Bank of Canada rose 1 percent to C$61.37, its biggest gain in four weeks. Scotiabank climbed 0.6 percent to C$59.45, and Toronto-Dominion added 0.4 percent to C$83.96.
Finance Minister Jim Flaherty yesterday released a fiscal plan that eliminates the country’s deficit in two years. The proposal limits spending growth to the slowest pace since the 1990s and relies on an accelerated recovery. The world’s 11th- largest economy is expanding at the weakest rate since emerging from recession in 2009.
Lululemon (LLL), the yoga retailer that recalled see-through pants, slumped 3.7 percent to C$63.80, the lowest since August. Huei Suen Ng, analyst with Credit Agricole Securities, cut the stock’s rating to a sell on concerns the company is making mistakes as it accelerates global store openings.
“Until Lululemon solves its execution problems, we do not think it makes sense to own the stock,” Ng said in a note to clients after the close of regular trading yesterday.
Walter Energy, a Birmingham, Alabama-based metallurgical coal producer, advanced 2.7 percent to C$30.26 after announcing it will close mines in Alabama and British Columbia.
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