Canada Stocks Rise to 3-Year High as Gold Jumps After Jobs Data

Canadian stocks rose a fourth day, to an almost three-year high, as gold rallied on speculation that weaker-than-estimated U.S. jobs growth will lead the Federal Reserve to slow the pace of stimulus withdrawal.

Barrick Gold Corp. and Goldcorp Inc. rallied at least 3 percent as gold gained the most in a week. BlackBerry Ltd. climbed 1 percent for a fifth day of increases after an analyst with RBC Capital Markets raised his rating on the stock. Air Canada, the best-performing stock in the benchmark equity gauge in 2013, added 5.2 percent.

The Standard & Poor’s/TSX Composite Index rose 118.11 points, or 0.9 percent, to 13,747.52 at 4 p.m. in Toronto. The index rallied 1.5 percent this week and closed at the highest level since May 2011.

“The commodities are having a good day and gold is feeding off the weak dollar and weak jobs numbers,” said Michael O’Brien, fund manager with TD Asset Management Inc. in Toronto. The firm manages C$218.3 billion ($200.2 billion). “Clearly the jobs data caught everybody off guard.”

Gold for February delivery jumped 1.4 percent to settle at $1,246.90 an ounce in New York, reversing an earlier drop after the jobs data.

Canada’s unemployment rate rose to 7.2 percent in December, from a five-year low of 6.9 percent in the previous month while employment fell by 45,900. Economists surveyed by Bloomberg News projected a 14,100 job increase and an unchanged jobless rate. U.S. payrolls in December increased at the slowest pace since January 2011.

Raw Materials

Raw-materials stocks surged 2.4 percent as a group, the most since October and the biggest gain in the S&P/TSX. Nine of 10 industries advanced on trading volume 27 percent higher compared with the 30-day average at this time of the day.

Barrick Gold gained 3 percent to C$19.82 and Goldcorp increased 4 percent to C$25.29 as all 23 members of the S&P/TSX Gold Index advanced. Novagold Resources Inc. rallied 7.8 percent to C$3.05 and Osisko Mining Corp. added 5.9 percent to C$5.17.

First Majestic Silver Corp. added 5.3 percent to C$11.51 and Silver Standard Resources Inc. climbed 7.7 percent to C$8.26 as the price of silver rose 2.7 percent, the most since Jan. 2.

Bankers Petroleum Ltd. rose 4.3 percent to C$4.58 and Canadian Natural Resources Ltd. advanced 3.1 percent to C$36.19 as the price of crude rose for the first time in three days. West Texas Intermediate rallied 1.2 percent to settle at $92.72 a barrel in New York.

BlackBerry Rallies

BlackBerry increased 1 percent to C$9.56. The stock rallied every day this week, adding 18 percent to the highest level since September.

Mark Sue, analyst with RBC Capital Markets, said recently installed Chief Executive Officer John Chen has been able to improve BlackBerry’s liquidity and strengthen its balance sheet. Sue upgraded the stock to sector perform, the equivalent of a hold, from underperform, the equivalent of a sell.

Air Canada soared 5.2 percent to C$8.36, the highest level since June 2008. The stock has surged 14 percent in the past two days after three days of losses. The carrier jumped 323 percent in 2013, for the best performance in the S&P/TSX.

ShawCor Ltd. fell 3.9 percent to C$39.13 after reporting its fourth-quarter earnings would be “significantly lower” than the third quarter. Income from operations is projected to fall 50 percent to 60 percent from third-quarter levels, due primarily to a 50 percent reduction in revenue in the Asia Pacific region as well as a delayed startup of several large projects, the company said in a statement.

CGI Group Inc. declined 2.5 percent to C$34.37, the lowest close since September. The software services company that built the main Obamacare website will be replaced next month when its contract with the U.S. federal government expires, a person familiar with the decision said, Bloomberg News reported.