Canada Stocks Snap Four Days of Gains as Bank of Montreal Drops

Canadian stocks fell, snapping four days of gains, as industrial companies declined and Bank of Montreal reported lower-than-estimated profit.

Bank of Montreal sank 4.5 percent, the most since 2010, to pace declines among financial stocks. First Quantum Minerals Ltd. dropped 1.5 percent as copper fell to the lowest in more than a week. Maxim Power Corp. plunged 15 percent after saying Rockland Capital has terminated an agreement to buy Maxim Power (USA) Inc. Air Canada, the nation’s largest airline, lost 1.8 percent for the first decline in five days. Peregrine Diamonds Ltd. soared 52 percent, the most in four years, after finding diamonds in bulk sample testing.

The Standard & Poor’s/TSX Composite Index fell 99.70 points, or 0.7 percent, to 13,319.87 at 4 p.m. in Toronto. The benchmark equity gauge has risen 7.1 percent this year, the third-worst performer among developed markets ahead of Hong Kong and Singapore.

“The banks are down, that’s leading the market down,” said Irwin Michael, fund manager with ABC Funds in Toronto. The firm manages about C$850 million ($796.7 million). “Bank of Montreal, the fact is it’s had a good run.”

Gauges of financial and industrial stocks tumbled 1.5 percent each, the most in the S&P/TSX. Seven of 10 industries declined on trading volume 7.7 percent higher than the 30-day average.

Bank Earnings

Bank of Montreal, Canada’s fourth largest lender, sank 4.5 percent to C$70.25, the most in almost three years. The stock had rallied 22 percent from a low on June 24 through yesterday. The company said net income for the period ended Oct. 31 was C$1.09 billion, or C$1.62 a share, little changed from C$1.08 billion, or C$1.59, a year earlier.

“While the headline looks strong, BMO reported a C$121 million gain in wealth management that is not recurring and will not likely be treated as core in the market,” John Aiken, an analyst with Barclays Capital Inc., said in a note to clients.

Royal Bank of Canada, the nation’s largest lender, dropped 1.3 percent to C$69.56. Toronto-Dominion Bank, the second-largest, lost 0.8 percent to C$96.13.

Royal Bank, Toronto-Dominion and Canadian Imperial Bank of Commerce are scheduled to report third-quarter earnings on Dec. 5.

First Quantum Minerals lost 1.5 percent to C$17 and Copper Mountain Mining Corp. declined 1.3 percent to C$1.47 as copper for March delivery fell 0.5 percent in New York. Copper prices have retreated 13 percent this year, set for a second annual drop in three years.

Planes, Trains

Air Canada, the best-performing stock in the S&P/TSX this year with a 342 percent gain, dropped 1.8 percent to C$7.73 to pace losses in industrial shares. Canadian Pacific Railway Ltd. retreated 2 percent to C$163.17 and Canadian National Railway Co. slipped 1.8 percent to C$60.36.

Bombardier Inc. tumbled 2.9 percent to C$4.65. Continued delays with the jet manufacturer’s CSeries planes may steer orders towards competitors, said George Ferguson, analyst with Bloomberg Industries, in a report.

“A filing with Canadian authorities to extend flight testing to May 2015 suggests service entry may not occur in 2014 as previously scheduled,” Ferguson said.

Maxim Power plunged 15 percent to C$2.87, the most since 2008, following the termination of the sale of Maxim Power (USA), Inc.

The Calgary-based thermal and electric energy developer had agreed to sell its U.S. unit to Patriot Power Holdings LLC, an affiliate of Rockland Capital in August. Rockland terminated the agreement due to an outstanding regulatory proceeding with the Federal Energy Regulatory Commission, Maxim said in a release.

Oil Companies

Legacy Oil & Gas Inc. advanced 2.5 percent to C$6.25 after Chief Executive Officer Trent Yanko said his company was a “very attractive acquisition target” in an interview with Bloomberg.

Suncor Energy Inc. rose 1.8 percent to C$37.58 and Crew Energy Inc. added 5.1 percent to C$5.94 as crude for January delivery surged the most since September after TransCanada Corp. said it will begin operating the southern leg of its Keystone XL pipeline to the Gulf Coast in January.

Peregrine Diamonds soared 52 percent to 64 Canadian cents, the biggest gain since September 2009, after reporting a diamond grade of 2.7 carats a tonne from testing at its Chidliak project in Nunavut. The testing recovered about 600 carats of commercial-size diamonds, including a “significant portion” of gem diamonds, the company said in a statement.

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