Canadian Stocks Cap Weekly Gain Amid Optimism After Jobs ReportsCallie Bost
Canadian stocks advanced, capping a weekly gain for the benchmark index, amid optimism over economic growth after the release of employment reports for the nation and the U.S.
Detour Gold Corp. jumped 12 percent after Canaccord Genuity Corp. analysts raised the stock’s rating. Silver Standard Resources Inc. climbed 9.9 percent after CIBC World Markets Inc. upgraded the shares. Baytex Energy Corp. dropped 4.6 percent as it agreed to buy Aurora Oil & Gas Ltd. for C$1.8 billion ($1.63 billion). Aurora soared 55 percent.
The Standard & Poor’s/TSX Composite Index increased 73.10 points, or 0.5 percent, to 13,786.50 at 4 p.m. in Toronto. The gauge, which has risen 1.2 percent in 2014, added 0.7 percent this week. Trading in S&P/TSX stocks was 13 percent above the 30-day average at the close.
“People could look at this data and say it’s disappointing, but there also could be circumstances around this data that could have an effect on it, like the cold weather,” John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto, said by phone. The firm manages about C$1 billion.
Unemployment in Canada fell to 7 percent in January from December’s 7.2 percent as the number of jobs rose by 29,400, partly reversing the prior month’s drop of 44,000, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected the jobless rate would decline to 7.1 percent with a 20,000 payrolls increase, according to median forecasts.
Payrolls in the U.S. rose less than projected in January as retailers cut back after the holidays and government hiring fell. The unemployment rate unexpectedly declined to 6.6 percent, the lowest level since October 2008, even as more Americans entered the labor force. The report showed 262,000 people were not at work because of inclement weather, little changed from the same month last year.
Eight of 10 main industries in the S&P/TSX advanced. Health-care companies rose 2 percent, while utilities and consumer-staples shares increased 1 percent.
Producers of raw materials gained 2.2 percent. Pretium Resources Inc. surged 8.3 percent to C$6.77. Argonaut Gold Inc. jumped 7.7 percent to C$5.29 and Fortuna Silver Mines Inc. rose 7.3 percent to C$4.57.
Detour jumped 12 percent to C$7.85, the highest level since November. Canaccord analyst Rahul Paul raised the stocks’ rating to hold from sell. Yesterday, Macquarie Capital Markets analyst Michael Siperco wrote that Detour’s chance of getting a takeover bid could rise as the gold producer continues to ramp up its Detour Lake mine into 2015.
Silver Standard climbed 9.9 percent to C$10.08, the highest level since August. CIBC analyst Arnold Van Graan upgraded the shares to sector outperform, the equivalent of buy, from sector perform, the equivalent of hold.
Baytex dropped 4.6 percent, the most since April, to C$39.72. The acquisition, which will allow the oil and natural gas producer to add output from the Eagle Ford shale formation in Texas, follows its purchases in North Dakota’s Bakken and Three Forks shale formations.
Baytex is financing the transaction with a C$1.3 billion equity offering and existing credit facilities. The acquisition also includes about C$744 million in assumed debt.
Holders of Aurora, based in Perth, Australia, will receive A$4.10 ($3.67) a share, Baytex said in a statement yesterday. Aurora soared 55 percent to C$4.08 in Canadian trading.