BLBG: Canada Stocks Fluctuate as Banks Gain, Material Producers Drop
By Rita Nazareth
Sept. 4 (Bloomberg) -- Canadian stocks swung between gains and losses as banks rose after a smaller-than-expected decrease in U.S. jobs and a surprise increase in Canadian employment, while raw-material producers fell with commodity prices.
Royal Bank of Canada, the country’s largest lender rose 0.4 percent, and Manulife Financial Corp., North America’s largest insurance company, gained 0.8 percent. Barrick Gold Corp., the world’s biggest producer of the metal, and Goldcorp Inc. fell at least 1.7 percent as the price of bullion pulled back from a six-month high.
The Standard & Poor’s/TSX Composite Index rose 9.32 points, or 0.1 percent, to 10,930.81 at 11:15 a.m. in Toronto. The Canadian equity benchmark climbed the most in a month yesterday after gold prices rose and two banks beat analysts’ earnings estimates. The index has slipped 0.4 percent this week.
Financial shares, which account for 32 percent of the S&P/TSX, led the gains in the index. A U.S. government report showed that the pace of job losses in the world’s biggest economy slowed in August as signs emerged that the recession is ending, even as the unemployment rate reached a 26-year high.
“A little good, a little bad,” said Fred Ketchen, who oversees about C$100 million as managing director of equity trading at ScotiaMcLeod Inc. in Toronto. “Economic reports have been mixed, but already pointing to modest improvement. As much as we don’t see so much excitement in the stock market, we probably won’t get a sharp drop in stocks either.”
U.S. employers cut 216,000 from payrolls, fewer than forecast, Labor Department data showed today in Washington. Canada recorded a surprise job gain in August, the first in four months, suggesting the country is emerging from its first recession since 1992.
Canadian financial institutions that have reported quarterly results since July 8 have beaten the average analyst estimate by 19 percent, the most among 10 industries, according to data compiled by Bloomberg. Gains in consumer lending and an increase in fees from trading and investment banking have outweighed bigger loan losses.
Royal Bank rose 0.4 percent to C$56.03. Manulife added 0.8 percent to C$21.25.
Gold Drop
Raw-material shares had the biggest decline in the S&P/TSX and their first decrease in three days as gold dropped from a six-month high. Gold futures for December delivery slid $8.30, or 0.8 percent, to $989.40 an ounce on the New York Mercantile Exchange’s Comex unit. Copper and silver prices also declined.
Barrick lost 1.7 percent to C$42.91. Goldcorp fell 2 percent to C$44.77.
Eldorado Gold Corp. slipped 1.1 percent to C$12.16. Gold Fields Ltd. said it sold a stake in the Canadian producer of the metal in China for about $293 million.
Canadian Employment rose by 27,100 last month, Statistics Canada said. The jobless rate increased to 8.7 percent from July’s 8.6 percent, the highest since January 1998, as the labor force grew faster than employment. Economists surveyed by Bloomberg predicted a job loss of 15,000 and unemployment at 8.8 percent.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.
