Canadian Stocks Fall as Industrial, Financial Stocks Retreat

Canadian stocks fell after climbing to a four-month high yesterday, as a decline among industrials and financial stocks overshadowed gains for copper producers.

Canadian National Railway Co. lost 3.2 percent after the company discussed possible weakness in shipping in the second half of the year. Aimia Inc., a credit card loyalty program manager, jumped 3.8 percent after agreeing to buy a technology provider to U.S. retailers. Teck Resources Ltd. and First Quantum Minerals Ltd. gained at least 1.6 percent.

The Standard & Poor’s/TSX Composite Index lost 13 points, or 0.1 percent, to 12,745.38 at 4 p.m. in Toronto. The drop snapped a four-day rally and left the gauge up 2.5 percent for the year. Trading volume was in line with the 30-day average at this time of day.

“For Canada, today is a bit of a pause” after four days of gains, said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4 billion ($3.89 billion). “There’s a natural inclination to look for laggards when we’re at highs and the whole Canadian market has lagged this year.”

Six of 10 industries in the S&P/TSX retreated. Financial stocks dropped 0.4 percent as a group. National Bank of Canada slid 1.4 percent to C$77.96, snapping a streak of eight straight advances. Bank of Nova Scotia dropped 1 percent to C$58.35.

Railroad Stocks

Industrial shares slid the most, declining 1.5 percent. Canadian National slumped 3.2 percent to C$101.69. Luc Jobin, the company’s chief financial officer, said on a conference call with analysts yesterday the railroad may face a “challenging” second half due to weakness in shipping bulk products such as grain. Canadian Pacific Railway Ltd. fell 1.8 percent to $130.18.

Canada’s Transport Department also said today it is setting new emergency requirements for railway companies, including having at least two employees operating shipments of dangerous goods and stronger policies about setting brakes, after a deadly train derailment and explosion in Quebec on July 6 killed about 50 and destroyed much of downtown Lac-Megantic.

Health-care stocks declined 0.7 percent, led by a 0.8 percent drop at Valeant Pharmaceuticals International Inc. The drugmaker was sued by a pension fund over allegations its Medicis unit conspired to preserve a monopoly on its acne drug Solodyn.

AlarmForce Industries Inc., a home security system provider, rose 2 percent to C$10, erasing earlier losses, after firing President and Chief Executive Officer Joel Matlin. The company said Matlin will continue as a director. Anthony Pizzonia, the chief financial officer, will serve as the interim CEO while AlarmForce searches for a replacement.

Aimia, which manages customer loyalty programs including the Aeroplan credit-card service, jumped 3.8 percent to C$15.68. The company agreed to buy Smart Button, a technology provider for national retailers in the U.S., for about $18 million.

Telus Corp. advanced 0.6 percent to C$30.83 after the wireless carrier increased the number of shares it may purchase in a buyback to 31.9 million common shares from 15 million shares, or about 4.9 percent of outstanding stock as of May 17.

Copper miners Teck Resources gained 1.6 percent to C$24.35 and First Quantum Minerals rallied 6.6 percent to C$17.37 as the metal’s price rose for a fourth day ahead of a preliminary report on manufacturing in China tomorrow.

Chinese Premier Li Keqiang said the slowest economic growth policy makers will tolerate is 7 percent, Beijing News reported today. China, Canada’s second-largest trading partner, is the world’s largest consumer of raw materials. Its economy is forecast to grow 7.6 percent in 2013 and 2014, according to the median estimate from a Bloomberg survey of economists.

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