Canadian Stocks Decrease as BlackBerry Drops, Miners Soar

Canadian stocks declined, led by technology, financial and health-care shares, after a measure of China’s manufacturing contracted. Mining companies gained after gold reached a two-month high.

BlackBerry Ltd. dropped 3.1 percent after yesterday reaching the highest price since September. Penn West Petroleum Ltd. retreated 4 percent, bringing its loss this week to 14 percent. Gold mining stocks soared 3.1 percent as a group with OceanaGold Corp. and China Gold International Resources Corp. jumping more than 5 percent.

The Standard & Poor’s/TSX Composite Index decreased 55.23 points, or 0.4 percent, to 13,932.97 at 4 p.m. in Toronto after earlier rising above 14,000 for the first time since May 2011. The gauge is about 2.4 percent lower than a three-year high of 14,270.53 in April 2011. Trading in S&P/TSX stocks was 8 percent higher than the 30-day average at the close.

“Investors are letting the market take a pause,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.7 billion), said by phone from Toronto. “There’s a general wait-and-see attitude. Other than gold stocks mitigating the decline, we’re seeing a negative tone in the equity markets.”

Chinese factory output may shrink this month, a preliminary survey from HSBC Holdings Plc and Markit Economics indicated today as the People’s Bank of China injected more funds to the financial system to ease a cash shortage. In the U.S., applications for unemployment benefits rose in the latest week.

Equity Valuations

The S&P/TSX has advanced 2.3 percent this year for the 10th best performance among 24 developed markets tracked by Bloomberg. The gauge trades for about 18.4 times its companies’ reported earnings, the highest valuation in almost three years.

The Canadian index is starting the year off stronger than the S&P 500 Index, the U.S. benchmark gauge, for the first time since 2009. The S&P 500 is down 1.1 percent this year, more than the MSCI All-Country World Index’s 1 percent decline.

The Canadian dollar, the worst performer among the Group of 10 countries in the past six months, slid 0.8 percent to C$1.1174 per U.S. dollar, the weakest level since July 2009.

Global stocks fell today as a survey from HSBC Holdings Plc and Markit Economics signaled that Chinese factory output may contract this month. The preliminary reading of 49.6 for the Purchasing Managers’ Index compared with a final figure of 50.5 in December and a 50.3 median estimate of 19 analysts in a Bloomberg survey.

Retail Sales

Canadian retail sales in November increased 0.6 percent to C$41.0 billion ($36.8 billion), Statistics Canada said today in Ottawa, three times faster than the 0.2 percent median of a Bloomberg survey with 18 responses. Motor vehicle and parts sales rose 1.2 percent to C$9.63 billion in November as an early onset of winter boosted demand for seasonal items, Statistics Canada said.

Nine of the 10 main industries in the index retreated. Health-care companies dropped 1.2 percent, while technology, financial and consumer-staples stocks lost at least 0.5 percent. Producers of raw materials advanced 1 percent.

Manulife Financial Corp. rose 1.9 percent to C$21.80 and Alaris Royalty Corp. slipped 1.8 percent to C$26.51. Home Capital Group Inc. decreased 1.6 percent to C$78.75.

BlackBerry dropped 3.1 percent to C$11.59. Yesterday, the smartphone maker jumped to the highest level since September after it disclosed plans to sell most of its Canadian real estate for cash.

Gold Shares

Penn West lost 4 percent to C$7.89. Yesterday, the oil and gas explorer fell to the lowest level since 1999 after AltaCorp Capital Inc. analyst Jeremy McCrea said Penn West may have a higher risk of missing expected production rates.

RBC Capital Markets analyst Greg Pardy said yesterday the company should divest assets with “modest” output to improve its balance sheet.

The S&P/TSX Gold Index increased 3.1 percent as OceanaGold jumped 9.7 percent to C$2.14 and China Gold International Resources Corp. surged 5.7 percent to C$3.36, leading gains among mining stocks in the gauge. Pretium Resources Inc. climbed 2.1 percent to C$6.97 and NovaGold Resources Inc. rose 4.5 percent to C$3.46.

Gold futures for February delivery rose 1.9 percent to $1,262.30 an ounce in New York. Earlier, the price of gold touched $1,267.10 an ounce, the highest level since Nov. 20.

Agnico Eagle Mines Ltd. increased 7.2 percent to C$33.91, the highest level since August. Sterne, Agee and Leach Inc. analyst Michael Dudas raised the gold producer’s rating to buy from neutral with a 12-month price target of $38 a share.

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