Canadian Stocks Climb as U.S. Spending Data Offset Gold Declines

Canadian stocks rose, erasing a loss for the week, as an increase in U.S. consumer spending offset a decline in gold shares amid a report showing manufacturing in China contracted.

NuVista Energy Ltd. soared 9.2 percent after CIBC World Markets analysts upgraded the stock. Methanex Corp. surged 7.8 percent after reporting fourth-quarter earnings that exceeded estimates. Gold producers in the index retreated 2.2 percent as China Gold International Resources Corp. and Osisko Mining Corp. paced losses. Potash Corp. of Saskatchewan Inc. tumbled 1.9 percent after forecasting 2014 earnings that trailed estimates.

The Standard & Poor’s/TSX Composite Index increased 92.06 points, or 0.7 percent, to 13,735.28 4 p.m. in Toronto. The gauge has gained 0.1 percent this week. Trading in S&P/TSX stocks was 5.3 percent below the 30-day average.

“Today is a risk-on market,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.37 billion), said by phone from Toronto. “Investors seem to think that emerging markets turmoil will calm down and fairly good earnings in U.S. market could drive gains. People who bought gold yesterday are now selling.”

Americans’ spending climbed the most in three years as the U.S. economy expanded at a 3.2 percent pace in the fourth quarter, data today showed. The annualized gain in gross domestic product matched the median forecast in a Bloomberg survey.

China Manufacturing

A Chinese manufacturing gauge signaled the first contraction since July. The Purchasing Managers’ Index fell to 49.5 this month from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

Today’s reports come after U.S. Federal Reserve policy makers said yesterday the central bank will cut monthly bond purchases by $10 billion to $65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing.

Gold for April delivery fell the most in six weeks. The metal had rallied 5 percent this month through yesterday, with a rout in emerging-market currencies this week spurring demand.

Nine of 10 main industries in the S&P/TSX advanced at least 0.6 percent. Industrial shares gained 1.9 percent, as Canadian Pacific Railway Ltd. jumped 3.6 percent to a record, and Canadian National Railway Co. climbed 2.1 percent.

NuVista, Methanex

NuVista Energy soared 9.2 percent to C$8.28, the highest level since June. CIBC analyst Adam Gill raised the stock to sector outperform from sector perform with a 12-month target price of C$10.50 a share.

Methanex surged 7.8 percent to C$68.88, an all-time high, after the methanol producer said it earned C$1.72 per share in the fourth quarter.

BlackPearl Resources Inc. increased 2.9 percent to C$2.47. Macquarie analysts wrote that BlackPearl and other energy producers may attract foreign buyers amid a depreciation in the Canadian dollar.

Air Canada jumped 6.4 percent to C$7.63, stopping a five-day slide of 26 percent. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

An index of raw-materials producers dropped 1.2 percent for the only decline in the benchmark gauge today, as as gold and silver prices tumbled.

The S&P/TSX Gold Index dropped 2.2 percent after two days of gains. China Gold slumped 6.2 percent to C$3.32, halting a two-day rally that added 15 percent to the stock. Osisko Mining slid 4.2 percent to C$6.60, and Iamgold Corp. dropped 3.3 percent to C$4.06.

Potash Corp. tumbled 1.9 percent to C$34.89. The world’s largest fertilizer producer by market value said today that profit for the year will be $1.40 to $1.80 a share, below analysts’ estimates of $2 a share.

Potash Corp. also cut its estimate for 2014 global shipments. Buyers of potash deferred purchases in the second half of 2013 after OAO Uralkali, the world’s largest producer, quit a sales accord in July with its Belarusian competitor and announced plans to boost output.

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