Canada Stocks Fall as Commodity, Technology Shares Slump

Canadian stocks fell, erasing an earlier gain and sending the benchmark index lower for a second day, as a slump in technology companies and raw-materials producers overshadowed a rise in financial shares.

Agrium dropped 1.1 percent after its chief executive officer said there is no reason to compromise with an activist shareholder’s demands for change. Research in Motion Ltd. fell 7.6 percent on concern its new BlackBerry 10 phones won’t reverse the company’s decline in smartphone sales. Royal Bank of Canada and Bank of Nova Scotia each rose 0.8 percent. Arc Resources Ltd. and TransCanada Corp. added at least 1.1 to lead an advance among energy producers.

The Standard & Poor’s/TSX Composite Index decreased 0.72 point, or less than 0.1 percent, to 12,815.91 at 4 p.m. in Toronto. The benchmark gauge erased an earlier gain of as much as 0.3 percent. The S&P/TSX has climbed 3.1 percent this year.

“Canadian banks offer a very compelling value proposition,” said David Baskin, president of Toronto-based Baskin Financial Services Inc., overseeing C$480 million. “That’s a trend we expect to continue. It’s a good place to be.”

Oil advanced to a four-month high as orders for durable goods in the U.S. jumped, adding to economic optimism. Crude prices rose as much as 1 percent, reversing an earlier drop of as much as 0.4 percent, after the U.S. Commerce Department said orders increased 4.6 percent in December.

‘More Confident’

“People are certainly buying the oil stocks,” said Brian Huen, managing partner at Toronto-based Red Sky Capital Management Ltd., which oversees C$225 million in assets . “Oil, given that it’s a late-cycle commodity, will benefit from people being more confident with the macro-economic environment.”

Arc Resources increased 1.7 percent to C$24.24 and TransCanada advanced 1.1 percent to C$49.32.

Materials producers declined for the fourth-straight day, the longest losing streak for the group since November.

Agrium lost 1.1 percent to C$114.15 after Chief Executive Officer Mike Wilson said there is no reason for his company to compromise with activist shareholder Jana Partners LLC’s demands for change at the largest retailer of fertilizer and seeds to U.S. farmers. Jana is seeking to replace five of Agrium’s directors with its own board nominees and has proposed that the Calgary-based company spin off its retail business to boost profitability.

Bank Rally

Financial shares rose 0.4 percent after Fitch affirmed the ratings of six Canadian banks and said their outlooks were stable. The group pared gains after Moody’s Investors Service downgraded the long-term ratings on the six banks because of high consumer debt and elevated home prices. Canada’s banks are “sound and well regulated,” Finance Minister Jim Flaherty said in an emailed statement from Ottawa after the downgrade.

Royal Bank of Canada, the country’s largest lender, increased 0.8 percent to a record C$62.61. Bank of Nova Scotia added 0.8 percent to C$58.95.

Nordion added 7.3 percent, the most since January 2011, to C$6.90 after saying it is reviewing alternatives to boost shareholder value. The Ottawa-based company, whose isotopes help treat diseases such as cancer, also reported adjusted earnings of 34 cents a share for the quarter ended Oct. 31. That beat estimates of 26 cents a share, according to analysts surveyed by Bloomberg.

Rogers Communications Inc. jumped 1.6 percent to C$47.02, the highest level since November 2007, after BMO Capital Markets analyst Tim Casey raised Canada’s largest wireless carrier to outperform from market perform.

RIM Slumps

RIM slumped 7.6 percent to C$16.27. CEO Thorsten Heins is set to take the stage in New York on Jan. 30 to unveil the new phones. The new product line is RIM’s attempt to keep its current customers and win back people who have switched to Apple Inc.’s iPhone and Samsung Electronics Co.’s Galaxy, which runs on Google Inc.’s popular Android platform.

“Everything we’ve seen suggests they are catching up to the competition, but there’s nothing here that says this is why you need this device more than anything else,” said Jan Dawson, chief telecommunications analyst with the New York office of London-based Ovum Ltd.

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