Canada Stocks Fall as Commodities Slide on China, U.S. Data

Canadian stocks fell, snapping a two-day rally, as commodity prices slid after data showed China’s manufacturing grew at a weaker pace last month and U.S. companies added fewer workers than forecast.

Cott Corp. plunged 14 percent after reporting disappointing earnings. Yamana Gold Inc. dropped 6.5 percent after first-quarter profit missed estimates. Premier Gold Mines Ltd. and New Gold Inc. slumped more than 4.1 percent as gold fell the most in two weeks. Loblaw Cos. climbed 4.7 percent after raising its dividend and saying earnings topped estimates.

The Standard & Poor’s/TSX Composite Index fell 135.21 points, or 1.1 percent, to 12,321.29 in Toronto. The benchmark equity gauge rose 1.9 percent the first two days of the week to pare its loss in April.

“The commodities board is reacting negatively to the weak data from China, putting the correction in prices back on course,” Bob Decker, fund manager with Aurion Capital Management, said on the phone from Toronto. His firm manages C$6 billion ($5.9 billion).

The Standard & Poor’s GSCI gauge of 24 commodities fell 2.1 percent. Oil slipped 2.6 percent and gold dropped 1.8 percent.

China’s manufacturing expanded at a weaker pace in April in a sign that the slowdown in the world’s No. 2 economy is extending into the second quarter. China is Canada’s second-biggest trading partner.

Payrolls, Manufacturing

In the U.S., the Institute for Supply Management’s factory index showed manufacturing growth slowed to 50.7 in April from the prior month’s 51.3 The world’s largest economy added 119,000 workers in April, the smallest since September, following a revised 131,000 gain in March, figures from the Roseland, New Jersey-based ADP Research Institute showed today.

Canadian equities maintained losses after the U.S. Federal Reserve said it will keep its bond buying at a pace of $85 billion a month and is prepared to raise or lower the level of purchases as economic conditions evolve. None of the 47 economists in an April 25-29 Bloomberg survey forecast the central bank to alter the pace of purchases.

Cott, the Mississauga, Ontario-based drinks maker, sank 14 percent to C$9.49. Cott posted first-quarter earnings of zero cents a share, short of the average estimates of 9 cents according to a survey of eight analysts by Bloomberg.

Gold Slides

Yamana Gold slumped 6.5 percent to C$11.66. Canada’s fourth-largest producer of the metal said first-quarter earnings missed estimates as costs jumped 31 percent from a year earlier.

Raw-materials stocks fell 2.2 percent, as eight of 10 S&P/TSX groups retreated today. Energy stocks lost 1.8 percent.

Premier Gold Mines plunged 5.7 percent to C$1.99 and New Gold lost 4.1 percent to C$7.75.

Copper miners fell after the metal slid the most in a year. Teck Resources Ltd., Canada’s largest diversified miner, lost 0.7 percent to C$26.61 while First Quantum Minerals Ltd. declined 2.5 percent to C$17.15.

Loblaw jumped 4.7 percent to C$44.75, the highest since October 2007. The grocery store chain and operator of the Joe Fresh fashion label raised its dividend to 24 cents a share from 22 cents after reporting revenue and adjusted earnings that topped analysts’ estimates.

Loblaw also said it expects to file a preliminary prospectus to create a real estate investment trust in late May, and complete an initial public offering of the REIT in July. Loblaw first disclosed plans to create the real-estate unit in December.

Before it's here, it's on the Bloomberg Terminal.