Canadian Stocks Halt Six-Day Rally, Retreat From Two-Year High

Canadian stocks fell, after a six-day rally pushed the benchmark gauge to a two-year high, as lower prices for gold and oil dragged down commodity shares.

Iamgold Corp. slid 5.7 percent as the metal retreated for the first time in four sessions in New York. Silver Wheaton Corp. lost 3.2 percent after silver tumbled. Pengrowth Energy Corp. dropped 1.8 percent after crude dropped below $100 a barrel in New York. Loblaw Cos. advanced 1.3 percent to lead consumer-staples producers higher.

The Standard & Poor’s/TSX Composite Index fell 6.59 points, or 0.1 percent, to 13,581.39 at 4 p.m. in Toronto. The benchmark equity gauge had rallied 3.1 percent in the previous six sessions to the highest level since May 2011. Trading volume was 51 percent below the 30-day average.

“We’ve had a tremendous run, especially in the U.S.,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about C$4.7 billion ($4.4 billion). “People in the Canadian market have a dilemma on what to do with the materials sector. Most people are waiting to see what’s going to happen when it comes to economic performance. It’s a race between supply coming on stream and demand.”

The S&P/TSX has risen 9.2 percent this year, on pace for the best annual performance since 2010. The gauge has been the fourth-worst among developed markets this year ahead of Austria, Hong Kong and Singapore. The S&P 500, the U.S. equities benchmark, has rallied 29 percent. The index was little changed today.

Metals Miners

Materials stocks have fallen 32 percent as a group in 2013, the most among 10 S&P/TSX industries. The gauge of miners dropped 1.6 percent today to pace declines.

Gold for February delivery fell 0.8 percent in New York today. The price has tumbled 28 percent in 2013, on track for the worst annual plunge since 1981 as some investors lost faith in the metal as a store of value amid a rally in equities and an improving economy.

The S&P/TSX Gold Index plunged 3.2 percent, extending its slide in 2013 to 46 percent. Iamgold retreated 5.7 percent to C$3.50 and Yamana Gold Inc. lost 3.3 percent to C$9.02.

Silver Wheaton fell 3.2 percent to C$21.24 and Silvercorp Metals Inc. sank 2.5 percent to C$2.37. Silver for March delivery dropped 2.2 percent in New York. Through Dec. 27, the metal has tumbled 34 percent this year, on course for the biggest annual slump since 1981.

Energy stocks dropped 0.2 percent as crude slipped below $100 a barrel in the biggest decline in two weeks. Pengrowth Energy lost 1.8 percent to C$6.55.

Consumer Confidence

Producers of consumer staples increased 0.7 percent as a group for the second-biggest gain among 10 main index groups. Canadian consumers are heading into 2014 with more confidence than a year ago, buoyed by optimism that jobs are more secure and real-estate prices will rise, according to the Bloomberg Nanos Canadian Confidence Index, released today.

Loblaw advanced 1.3 percent to C$42.55 and Shoppers Drug Mart Corp. rose 0.8 percent to C$58.26.

Health-care stocks gained the most, adding 1.9 percent as a group to push the annual gain to 72 percent. Valeant Pharmaceuticals International Inc. jumped 2.8 percent to $124.94, a fourth-straight gain that extended an all-time high.

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