Canadian Stocks Fall as Miners Drop After Gold Hits 15-Week LowGerrit De Vynck
Canadian stocks fell for the first time in six days, as precious-metals miners declined with the price of gold amid U.S. economic data that boosted confidence in the nation’s biggest trading partner.
Silver Standard Resources Inc. and NovaGold Resources Inc. fell at least 6.5 percent to lead losses among raw-materials producers, as gold slid to a 15-week low. Valeant Pharmaceuticals International Inc. dropped 1.8 percent as Allergan Inc. presented its case against a proposed takeover. Bank of Nova Scotia gained 1.1 percent after an increase in consumer lending helped profit surpass analyst estimates.
The Standard & Poor’s/TSX Composite Index dropped 57.67 points, or 0.4 percent, to 14,658.02 at 4 p.m. in Toronto. The benchmark index is around 400 points away from an all-time high.
The better-than-forecast U.S. data means there is less demand for gold as a safe investment, said Jeff Young, who oversees about C$900 million ($830 million) as chief investment officer of NexGen Financial Corp. in Toronto. “It kind of takes away the case of an economic deceleration and a reduction in interest rates,” he said.
U.S. durable goods orders rose unexpectedly in April, a sign factories will help boost the world’s largest economy. Gold fell 2 percent in New York as better prospects for the American economy reduced demand for haven assets. Crude prices slipped on speculation inventories are sufficient to meet an anticipated boost in demand.
Materials companies lost 2.3 percent as a group, the biggest drop in two months, while energy producers slid 0.6 percent. Companies in the two industries account for almost 38 percent of the benchmark index for Canadian equities.
Silver Standard decreased 7.6 percent to C$7.31 and NovaGold fell 6.5 percent to C$3.19. Barrick Gold Corp., the world’s biggest gold producer, lost 4 percent to C$17.30.
BlackPearl Resources Inc. dropped 4.6 percent to C$2.30 to pace losses among energy producers. American Petrogas Inc. fell 9.2 percent to 99 Canadian cents as the company announced it would sell C$15 million in stock at 90 Canadian cents a share.
Valeant fell 1.8 percent to C$141.13. Allergan disclosed a slide presentation that raised questions about Valeant’s business model. Valeant said this month that it plans to sweeten the bid and will hold a webcast tomorrow to explain why Allergan’s owners should agree to a sale.
Bank of Nova Scotia rose 1.1 percent to C$68.74. Canada’s third-biggest lender by assets also said it will buy back as many as 12 million shares over the next year.
Wi-Lan Inc. rose 3 percent to C$3.39 after its board approved a plan to buy back as much as 10 percent of the company’s public shares.
Tekmira Pharmaceuticals Corp. gained 12 percent to C$13.82 after saying it was beginning a new trial of a cancer drug. Tekmira has risen 64 percent this year.
Alderon Iron Ore Corp. increased 9.5 percent to C$1.38 after getting approval from the province of Newfoundland and Labrador to begin building its Kami mine.