Canadian Stocks Retreat as U.S. Service-Sector Index Declines
Canadian stocks fell for the first time in seven days, led by energy companies, after China raised its benchmark interest rates and an index of U.S. service industries declined.
Bankers Petroleum Ltd. (BNK), an oil and gas producer with operations in Albania, plunged 15 percent after its second- quarter production trailed its forecasts. BlackBerry maker Research In Motion Ltd. (RIM) lost 3.8 percent after market-research firm ComScore Inc. said its market share shrank. Silver Wheaton Corp. (SLW), Canada’s fourth-largest precious-metals company by market value, advanced 5.4 percent as investors sought a haven from the European debt crisis.
The Standard & Poor’s/TSX Composite Index slipped 22.2 points, or 0.2 percent, to 13,403.10.
“The services number came out this morning quite weak, confirming a global slowdown,” said Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, which oversees C$600 million ($620 million). “With China raising interest rates again, the markets will probably correct some more in the next few days.”
The S&P/TSX had advanced six-straight days, led by commodity producers, as Greece approved an austerity package and a gauge of U.S. manufacturing climbed. The Canadian equity index increased 4 percent during the streak, narrowing its yearly decline to 0.1 percent.
Energy stocks retreated after the People’s Bank of China raised its benchmark interest rates for the third time this year. China is the world’s largest user of industrial metals and second-biggest oil consumer behind the U.S.
The Institute for Supply Management said its index of U.S. non-manufacturing businesses slipped to 53.3 in June from 54.6 in May, trailing most economist forecasts in a Bloomberg survey.
Cenovus Energy Inc. (CVE), the country’s fifth-biggest energy company, declined 2.6 percent to C$35.55 as natural gas futures slumped as much as 3.3 percent. Talisman Energy Inc., which produces oil and gas in North America, the North Sea and Indonesia, lost 1.4 percent to C$19.91. TransCanada Corp. (TRP), the owner of Canada’s largest pipeline system, slipped 1.2 percent to C$41.59.
Bankers Petroleum sank 15 percent, the most since December 2008, to C$6.07 after production missed its forecasts by about 8.5 percent. Gavin Wylie, an analyst at Bank of Nova Scotia, cut his rating on the shares to “sector perform” from “sector outperform.”
Cut to Junk
Government-bond yields in the most-heavily indebted Western European countries jumped today, a day after Moody’s Investors Service cut its rating on Portuguese credit to junk. Talks on investor involvement in the new Greek bailout package bogged down after Standard & Poor’s and Fitch Ratings both indicated they would cut Greece to default if the European Union went ahead with a plan to ask creditors to roll over expiring Greek bonds into new debt.
Gold futures gained 1.1 percent and silver rallied 1.4 percent in New York as investors sought hard assets.
Silver Wheaton climbed 5.4 percent to C$34.99. Eldorado Gold Corp. (ELD), which mines in China and Turkey, rallied 4.1 percent to C$15.47. Yamana Gold Inc. (YRI), Canada’s fifth-largest gold producer, rose 3.2 percent to C$12.07.
Eastern Platinum Ltd. (ELR) surged 20 percent, the most since October 2009, to C$1.02. Don MacLean, an analyst at Paradigm Capital Inc., said in a note to clients that a slide in the stock, after the mining company reported earnings that missed estimates and encountered labor unrest, was overdone. The shares closed at a 19-month low July 4.
RIM slipped 3.8 percent to C$26.79 after ComScore said it has fallen to third place, behind Apple Inc., in U.S. smartphone market share. Devices using Google Inc.’s Android operating system have the most users.
Sino-Forest Corp. (TRE), the forestry company fighting a short seller’s assertions of financial manipulation, retreated for the first time in six days, slumping 10 percent to C$4.75. The company postponed a trip for analysts it had proposed for mid- July.
To contact the reporter on this story: Matt Walcoff at Mwalcoff1@bloomberg.net
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