Canada Stocks Snap Three Days of Losses as Oil Gains Offset Gold
Canadian stocks rose, snapping three days of losses, as gains among oil producers overshadowed a decline in gold prices amid speculation the Federal Reserve will trim asset purchases in coming months.
Whitecap Resources (WCP) Inc. and Crew Energy Inc. climbed at least 3.5 percent as crude surged the most in seven weeks. Detour Gold Corp. and Rio Alto Mining Ltd. lost more than 7.6 percent as the price of gold tumbled. Gildan Activewear Inc. (GIL) retreated 3.3 percent after 2014 forecasts fell short of analysts’ estimates. Lightstream Resources Ltd. (LTS) sank 7.9 percent after announcing a dividend cut and reduced capital spending.
The Standard & Poor’s/TSX Composite Index (SPTSX) climbed 45.32 points, or 0.3 percent, to 13,475.33 at 4 p.m. in Toronto. The benchmark equity gauge has risen 8.4 percent this year, the third-worst performer among the world’s developed markets, ahead of Hong Kong and Singapore.
“Today is a bounce-back from the down days that we’ve had,” said John Kinsey, a fund manager with Caldwell Securities Ltd., said from Toronto. The firm manages about C$1 billion ($952 million). “Yesterday was a knee-jerk reaction to the Fed minutes. Energy seems to be pretty solid here.”
U.S. policy makers expect economic data will signal further improvement in the labor market and “warrant trimming the pace” of bond purchases in coming months, according to minutes from the Fed’s October meeting released yesterday. Stocks have rallied this year, bolstered by the Fed’s $85 billion in monthly asset purchases.
Whitecap Resources rallied 5.5 percent to C$12.36 and Crew Energy increased 3.5 percent to C$5.61 to pace gains among energy stocks. Nine of 10 industries advanced in the S&P/TSX on trading volume 13 percent above the 30-day average at this time of the day.
Crude for January delivery climbed 1.7 percent to $95.44 a barrel in New York, after a report showed jobless claims in the U.S. fell by 21,000 to 323,000 last week.
Bombardier Inc., the world’s third-largest plane maker, advanced 0.4 percent to C$4.68 after the planemaker said it had received firm orders and commitments for as many as 38 aircraft worth up to $2.01 billion at the Dubai airshow.
Air Canada, the nation’s largest airline, climbed 4.5 percent to C$6.98, the highest since June 2008. The stock is the top performer in Canada this year with a 299 percent advance.
Detour Gold (DGC) declined 9 percent to C$4.44 and Rio Alto Mining retreated 7.6 percent to C$1.58 as gold for December delivery tumbled 1.1 percent to $1,243.60 an ounce in New York, the lowest since July 9.
Endeavour Silver Corp. lost 0.7 percent to C$4.11 and Silvercorp Metals Inc. fell 0.7 percent to C$2.71 as silver prices declined for a second day.
Gildan Activewear slipped 3.3 percent to C$49.60, for its biggest loss since February. The clothing maker forecast first-quarter earnings of 33 cents to 35 cents a share, short of analysts’ estimates for 41 cents.
Gildan also reported fourth-quarter adjusted earnings of 83 cents a share, trailing analysts’ projections of 84 cents.
Lightstream Resources, an oil exploration and production company, tumbled 7.9 percent to C$5.57, a record low. The company said it will reduce its 2014 capital spending program by about 25 percent from estimated 2013 levels, and targeted more than C$600 million in non-core asset sales by the end of 2015.
The company also cut its dividend 50 percent to 4 Canadian cents a month, for annual cash savings of C$40 million a year.
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