Canadian stocks fell for a third day as a stronger U.S. dollar weighed on raw-materials prices and Potash Corp. of Saskatchewan cut its profit forecast. Barrick Gold Corp., the world’s largest gold producer, slid 0.8 percent. Potash Corp., the world’s biggest fertilizer producer, dropped 1.6 percent. Research In Motion Ltd. gained 1.6 percent after an analyst raised his target price and profit estimates on the stock. “We’re in a bit of a lull period,” said Sebastian Van Berkom, chief executive of Van Berkom and Associates Inc. in Montreal, which manages about C$1 billion in investments. “The market is trading at a reasonably multiple; it’s not exactly overpriced relative to the earnings people are forecasting for 2010, but at the same time, people remain a little bit fearful, and we want to make sure there is enough evidence that the real economic recovery is taking hold.” The Standard & Poor’s/TSX Composite Index fell 21.34 points, or 0.2 percent, to 11,424/61, for the first three-day decline since July 8. The benchmark index rose 8.1 percent from Sept. 1 to Sept. 16 as investors, increasingly confident after economic data signaled a global economic recovery, abandoned the U.S. dollar for riskier commodities and other currencies. The U.S. dollar rose today as a report showed U.S. leading economic indicators gained in August for a fifth consecutive month. A stronger U.S. currency diminishes the appeal of dollar- priced commodities that can be used to hedge against inflation. Energy and raw-materials companies make up 44 percent of Canadian stocks by market value. ‘Not Strong Enough’ “The economic recovery seems to be taking hold, however, it’s probably not strong enough to justify the prices of commodities that have surged because of strategic buying by the Chinese” and institutions buying commodities as investments, Van Berkom said. Raw-materials companies on the S&P/TSX fell for a third day, dropping 0.3 percent. Gold slumped 0.5 percent to $1,004.90 an ounce in New York, as an International Monetary Fund approval of about $13 billion in bullion sales may have compounded the effects of the U.S. dollar’s rise. Barrick dropped 0.8 percent to C$39.32 for its third- straight loss. Iamgold Corp., which climbed to an all-time high last week, sank 3.3 percent to C$15.09. Great Basin Gold Ltd., which explores for the metal in South Africa and the U.S., fell the most among S&P/TSX companies, plunging 6.3 percent to C$1.63. Forecast Cut Potash Corp. decreased 1.6 percent to C$100.21. The company said Sept. 18 that profit this year will be $3.25 to $3.75 a share, instead of the previous forecast of $4 to $5. Analysts had expected full-year earnings of $4.03 a share, the average of 17 estimates in a Bloomberg survey. The Saskatoon, Saskatchewan, company cited weaker demand for potash, a form of potassium. Agrium Inc., which supplies potash, nitrogen and phosphate, fell 2.7 percent, the most in a month, to C$55.67. Crude oil for October delivery fell 3.3 percent to $69.70 a barrel on the New York Mercantile Exchange as the U.S. dollar gained the most since Sept. 1. Oil and gas producer Talisman Energy Inc. declined 0.5 percent to C$18.97. Crew Energy Inc., which produces oil and gas in Western Canada, tumbled 1.4 percent to C$8.52 on a reduction it its rating to “market perform” from “outperform” by analyst Justin Bouchard of Raymond James Financial Ltd. Financials Retreat S&P/TSX financials declined for the first time in eight trading days. Manulife Financial Corp., the country’s biggest insurer, lost 1.8 percent to C$22.37 to contribute the most to the S&P/TSX’s decline. The country’s second-largest bank, Toronto-Dominion Bank, slid 1 percent to C$67.95. RIM, the maker of BlackBerry smart phones, rallied 1.6 percent to C$90.67. Analyst Shaw Wu of Kaufman Bros. LP raised his price target on RIM’s NASDAQ-listed stock to $93 from $87, saying Kaufman’s research indicates RIM will post “strong” quarterly results on Sept. 24. Copper producer Quadra Mining Ltd. surged 3.6 percent to a 12-month high of C$14.27. Analyst Alka Singh of Rodman & Renshaw Inc. raised her target share price on the company to C$14 from $7.50 to coincide with increases in her estimates of copper prices over the next two years. CGI Group Inc., Canada’s biggest computer-services company, led S&P/TSX members with a 5.7 percent jump to C$12.31, the stock’s highest price in seven years. Analyst Eric Bernofsky of Desjardins Securities wrote to clients that Dell Inc.’s purchase of Perot Systems Corp. shows CGI, which operates in similar markets to Perot, may be undervalued. Dell is paying a 68 percent premium to Perot’s Sept. 18 closing price. “If we were to apply similar multiples to CGI, its shares would be valued in the C$20-30 range,” Bernofsky wrote. Yellow Pages Income Fund, the publisher of telephone directories, climbed 2.9 percent to C$5.37 after analyst Scott Cuthbertson of Toronto-Dominion Bank raised his rating on the Montreal company to “action list buy” from “buy.” To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

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