Canada Stocks Rise, Erase Losses as BlackBerry and Gold Rally

Canadian stocks rose, after posting the biggest weekly gain in a month, as metal producers rallied with the price of gold to help erase earlier declines amid political brinkmanship in the U.S. over avoiding a debt default.

Miners accounted for the 10 biggest advances in the benchmark equity index, with AuRico Gold Inc. soaring 12 percent to pace gains among gold producers. BlackBerry Ltd. gained 1.6 percent after a report that private-equity firm Cerberus Capital Management LP is considering an offer for the company. Canadian National Railway Co. dropped 0.4 percent after the Teamsters Canada union threatened to strike over contract talks.

The Standard & Poor’s/TSX Composite Index rose 39.35 points, or 0.3 percent, to 12,931.46 at 4 p.m. in Toronto, erasing an earlier loss of as much as 0.4 percent. Canadian markets were closed yesterday for the Thanksgiving holiday. The gauge advanced 1.1 percent last week, most since Sept. 6.

“There continues to be pockets of attractiveness, and we continue to be favorable on stocks,” said Barry Schwartz, fund manager with Baskin Financial Services in Toronto. He helps manage about C$535 million ($516 million). “I don’t think anyone should be distracted by what’s going on. Don’t let it scare you.”

The fiscal showdown in Washington entered its final stages as the House and Senate prepared competing plans that would end the 15-day-old government shutdown and prevent the U.S. from missing promised payments.

Competing Plans

The House and Senate plans would both fund the government through Jan. 15, 2014, and suspend the U.S. debt limit until Feb. 7. As the differences narrow between the parties, a House vote as soon as tonight would test whether Republicans are willing to raise borrowing authority and end the shutdown without major changes to the 2010 health-care law.

“The only thing you can’t model is crazy politicians,” Schwartz said. “You cannot put that into your formulas to come up with a value when you have nut cases running the asylum. I’m not concerned about global growth, or the economy.”

Five of 10 main industries in the S&P/TSX rose, with materials and technology stocks increasing the most. Trading volume was 16 percent lower compared with the 30-day average at this time of the day.

Materials producers rallied 2.1 percent as gold, silver and copper prices reversed earlier declines. The S&P/TSX Gold Index gained 2.9 percent, the most in almost a month.

AuRico Gold surged 12 percent to C$4.04, the most since Sept. 18, after the company reported third-quarter production of about 48,900 ounces of gold and reiterated its production forecast for the year.

Torex Gold Resources Inc. climbed 6.8 percent to C$1.26 and Silvercorp Metals Inc. added 3.9 percent to C$3.24 as gold and silver prices pared earlier losses in New York.

Teck Resources Ltd. rallied 2.7 percent to C$27.89 as copper rose for a fourth day.

BlackBerry Bid

BlackBerry gained 1.6 percent to C$8.48 as technology stocks climbed 1.3 percent as a group.

Cerberus Capital, the private-equity firm that focuses on distressed assets, has signed a nondisclosure agreement with BlackBerry and is in the early stages of considering an offer to acquire all of the company, a person with knowledge of the situation said.

Wi-Lan Inc., the patent licensing company, climbed 3.2 percent to C$4.25, the highest since July, after the company settled a patent case with Novatel Wireless Inc. Wi-Lan has jumped 10 percent in the past four sessions.

Canadian National Railway lost 0.4 percent to C$109.07 as industrial stocks slipped 0.2 percent as a group.

Teamsters Canada Rail Conference, which represents about 3,300 railway workers including conductors, said Canadian National Railway has rejected the union’s proposal for further mediation and warned there may be a strike or lockout on Oct. 28.

Talisman Energy Inc. dropped 1.5 percent to C$12.52 as the price of crude slipped to a three-month low amid talks with Iran over its nuclear program. Two days of negotiations with the U.S., U.K., France, Germany, Russia and China began today in Geneva.

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