Canada Stocks Rise Amid Earnings, Precious Metals Gain

Canadian stocks rose as a rally in gold prices boosted materials shares while investors analyzed earnings before employment data later in the week.

Magna International Inc. advanced 1 percent after boosting its 2013 forecasts for sales. Avigilon Corp., a surveillance equipment maker, soared 25 percent as sales topped estimates. Semafo Inc. and Taseko Mines Ltd. rallied at least 5.2 percent as the price of gold climbed from a two-week low. Indigo Books & Music Inc. plunged the most ever on lower book sales and higher costs.

The Standard & Poor’s/TSX Composite Index increased 18.70 points, or 0.1 percent, to 13,380.41 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 7.6 percent this year to trade near a two-year high.

“We’re moving now into a period of data-watching and you’ll find people less inclined to make large bets going into Friday’s report,” said Andrew Pyle, fund manager with ScotiaMcLeod Inc. in Peterborough, Ontario. He manages about C$210 million ($201.6 million). “We haven’t had the same momentum there was in New York.”

The Dow Jones Industrial Average rose to a record close today as Federal Reserve officials said the U.S. economy warrants continued stimulus. The U.S. and Canada are scheduled to report jobs data for last month on Nov. 8. Economists forecast fewer workers hired and an increasing unemployment rate in both countries. The U.S. is Canada’s largest trading partner.

“You have to look at the Fed, with a new chairman coming in January, they will err on the side of generosity,” said Irwin Michael, fund manager with ABC Funds in Toronto. The firm manages about C$6 billion ($5.76 billion). “Keep rates low with the $85 billion monthly bond buyback, until they’re absolutely sure the economy has turned. And the market is happy to see that.”

Resource Rally

Raw-materials shares increased 0.5 percent as a group to lead gains in the S&P/TSX as seven of 10 industries advanced. Trading volume was in line with the 30-day average.

Taseko Mines climbed 5.2 percent to C$2.24 and Semafo increased 7.2 percent to C$2.98 as gold futures for December delivery rose the most in almost two weeks.

Magna International rose 1 percent to C$89.77 after increasing its forecasts for 2013 sales to $33.9 billion to $34.8 billion, from $33 billion to $34.7 billion previously.

Avigilon rallied 25 percent to C$25.55, a record high, as the Vancouver-based company posted third-quarter revenue of C$51.1 million, ahead of analysts’ projections for C$40.5 million. Gross margin rose to 53 percent from 51 percent a year ago, as demand worldwide for the company’s high-definition surveillance equipment grows, said Chief Executive Officer Alexander Fernandes in a statement.

Indigo plunged 20 percent to C$8.75 as the company lost C$10.1 million in the quarter, more than double the net loss in the same period a year ago. Indigo blamed the loss on lower book sales as well as higher operating, selling and administrative costs related to increased marketing and product initiatives.

Penn West

Penn West Petroleum Ltd. slumped 16 percent to C$9.74, the biggest decline in more than four years, as the Calgary-based company reported third-quarter production declined 4.5 percent compared with the previous quarter. Penn West has also targeted as much as C$2 billion in asset sales before 2015 as part of a strategic review.

Air Canada, the nation’s largest airline, slipped 7 percent to C$5.42 after reporting that load factor decreased 1.6 percentage point in October to 81.3 percent from a year ago. Capacity across the airline’s system rose 3.2 percent in the month as traffic climbed 1.3 percent. Load factor is a measure of airline efficiency relative to capacity.

The airline also said it has been told by market regulators the stock was halted this morning after triggering a circuit breaker. The company said no pending material news will be issued and external sources have suggested to Air Canada the halt may have been triggered by an “erroneous trade order.”

The company is scheduled to report third-quarter earnings on Friday before the markets open.

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