Canadian Stocks Fall With Commodity Prices; Teck Cominco Slides
Nov. 14 (Bloomberg) — Canadian stocks fell as commodity producers including Teck Cominco Ltd. and Goldcorp Inc. declined with prices of industrial metals and bullion.
Losses in the market were limited as data showing easing inflation prompted a rally in financial shares and raised speculation the Federal Reserve may cut interest rates next year.
The Standard & Poor’s/TSX Composite Index slipped 17.23, or 0.1 percent, to 12,292.17 as of 11:23 a.m. in Toronto.
A measure of raw-materials producers dropped for a third straight day, losing 1.6 percent.
Teck Cominco plunged C$1.55 to C$80.47. The world’s biggest zinc producer is seeking local partners to explore for zinc, copper and gold in China to tap rising demand for metals.
First Quantum Minerals Ltd., a miner of copper in Africa, slid C$3.94 to C$53.09.
Lead declined for a third consecutive trading session in London, leading other metals including copper and zinc lower, on speculation last week’s rally to a record was exaggerated as supply grew.
Goldcorp, Canada’s second-largest bullion miner, lost 36 cents to C$31.63. Barrick Gold Corp., the world’s biggest, eased 24 cents to C$33.33.
Gold futures for December delivery were trading 0.8 percent lower at $621 per ounce in New York.
Banks Gain
A gauge of financial stocks, the biggest by value in the S&P/TSX, increased 0.4 percent.
Prices paid to U.S. producers fell 1.6 percent in October, matching the biggest monthly decline on record, as energy costs and motor vehicle prices dropped, suggesting inflation pressures are abating, according to a report from the Labor Department in Washington. The decrease followed a 1.3 percent drop in September, the first back-to-back decline since July 2004.
Excluding food and energy, the so-called core rate fell 0.9 percent last month, the biggest decline since 1993, after rising 0.6 percent. Economists had expected a 0.1 percent gain.
Retail sales fell a less-than-expected 0.2 percent after a revised 0.8 percent decline in September that was larger than originally reported, the Commerce Department said in Washington. Purchases excluding gasoline rose 0.4 percent. Economists expected retail sales to fall 0.4 percent.
The reports suggested the Fed may be succeeding in keeping inflation in check without choking off growth following its decision to keep borrowing costs on hold at 5.25 percent since June.
Interest-Rate Futures
Interest-rate futures show traders see a 45 percent chance the central bank will cut its benchmark rate a quarter-percentage point to 5 percent by the end of March, compared with a 23 percent chance yesterday.
Royal Bank, the nation’s biggest lender by assets, added 52 cents to C$53.05. Canadian Imperial Bank of Commerce, the fifth- largest, was up 64 cents at C$90.22.
Sun Life Financial Inc., Canada’s second-biggest insurer, rose 42 cents to C$48.64.
Lower borrowing costs boost the value of bonds owned by banks, brokers and insurers, and increase demand for mortgages and loans.
The following shares were having unusual price changes in Canadian markets. Stock symbols are in parentheses.
Alamos Gold Inc. (AGI CN) dropped 44 cents, or 4.1 percent, to C$10.27. The Toronto-based bullion miner said it had fiscal third-quarter profit of C$835,000 ($734,200) on record bullion output after its Mulatos mine began producing on April 1. That compares with a C$2.45 million loss a year earlier. Per-share earnings of 1 cent fell short of the 3 cents average estimate of five analysts in a survey by Thomson Financial, which doesn’t disclose the parameters of the forecasts.
Skye Resources Inc. (SKR CN) plunged C$4.05, or 24 percent, to C$13.05. The mining exploration company said in a statement today that it would go ahead with developing its Fenix nickel project in Guatemala, after unsuccessfully exploring alternatives including a sale of the company. Earlier, Skye reported its loss for the nine months ended Sept. 30 widened by 36 percent to C$24.4 million from C$17.9 million, due mainly to expenses related to Fenix.