Canada Stocks Drop as Commodities Slump on China Concern

Canadian stocks fell, after touching a five-year high yesterday, as energy and metals producers slipped on concern that demand from China may decline and consumer confidence in the U.S. unexpectedly dropped.

BlackPearl Resources Inc. sank 6.6 percent after selling shares to raise cash. Pan American Silver Corp. fell 3 percent as silver sank. Bank of Montreal rose for the 14th time in 15 days after reporting profit that surpassed estimates. BlackBerry Ltd. jumped 7.9 percent after Chief Executive Officer John Chen said he would consider selling the company’s BlackBerry Messenger service.

The Standard & Poor’s/TSX Composite Index fell 38.10 points, or 0.3 percent, to 14,188.98 at 4 p.m. in Toronto. The benchmark equity gauge has advanced 4.2 percent this year.

“This is just a pause, you’ll have these situations throughout the year,” said Wes Mills, chief investment officer with Scotia Private Client Group. His firm manages about C$14 billion ($13 billion). “We’re consolidating the gains from yesterday. And we just had U.S. consumer confidence numbers released that slipped a bit.”

The index has declined two of the past three sessions after rallying 12 straight days for the longest streak in nearly two decades. The gauge is 0.6 percent below its peak of 14,270.53 reached on April 5, 2011.

Consumer Confidence

Consumer confidence in the U.S. fell to 78.1 in February from a revised 79.4 in January that was weaker than initially estimated as Americans grew more pessimistic about the outlook for the economy and employment. The median forecast for February in a Bloomberg survey of economists was for a reading of 80.

Oil and metals from copper to silver retreated today amid concern that the weakening Chinese yuan and curbs on real-estate lending will lead to lower demand from the biggest consumer of commodities.

Seven of 10 industries in the S&P/TSX fell on trading volume 11 percent lower compared with the 30-day average. Raw-materials stocks fell 0.8 percent as a group to lead losses.

Silver Standard Resources Inc. declined 1.9 percent to C$11.72 and Pan American Silver retreated 3 percent to C$16.33. The price of silver declined 0.4 percent in New York to snap two days of gains. The metal yesterday reached the highest level since October.

Argonaut Gold fell 5.3 percent to C$6.13 and Turquoise Hill Resources Ltd. lost 2.7 percent to C$3.92. An index of gold miners has rallied 29 percent in 2014 as the metal’s price has rebounded from its worst year since 1981. Gold added 0.4 percent today in New York.

BlackPearl Resources decreased 6.6 percent to C$2.56 after it raised C$70.2 million by selling shares. The company plans to use the cash to fund the first phase of development of its Online Lake project.

Crude, Gas Drop

Peyto Exploration & Development Corp. slumped 3.3 percent to C$35.43 and Birchcliff Energy Ltd. lost 2.3 percent to C$9.91. Crude slipped 1 percent to $101.83 a barrel in New York, the biggest decline in three weeks.

Encana Corp. fell 1.5 percent to C$21.15 as natural gas prices slumped to its biggest two-day slide in more than 6 years on speculation milder U.S. weather may reduce demand for the heating fuel.

Teck Resources Ltd., a diversified miner, declined 2 percent to C$24.49, the lowest since December. Copper prices fell for a fifth day.

Instant Messaging

BlackBerry jumped 7.9 percent to C$11.73, headed for the highest close in a month. BlackBerry’s Chen, speaking from the Mobile World Congress in Barcelona, said he would consider eventually selling the Waterloo, Ontario-based smartphone maker’s mobile messaging service. The stock has rallied 18 percent since Facebook Inc. agreed to buy instant messaging service WhatsApp Inc. for $19 billion on Feb. 19.

Bank of Montreal, Canada’s fourth-largest lender by assets, gained 0.1 percent to C$72.63, paring an earlier gain of as much as 1.1 percent. Canada’s fourth-largest lender by assets, posted first-quarter profit that beat analysts’ estimates on gains in domestic banking and lower loan-loss provisions.

Royal Bank of Canada is scheduled to report results tomorrow, with Toronto-Dominion Bank and Canadian Imperial Bank of Commerce slated to release earnings on Feb. 27.