Canadian Stocks Rise, Led by Financials; EnCana, Aurelian Fall
posted on
Jul 16, 2008 02:54PM
The company whose shareholders were better than its management
Canadian Stocks Rise, Led by Financials; EnCana, Aurelian Fall
By Fabio Alves
July 16 (Bloomberg) -- Canadian stocks rose, as Toronto- Dominion Bank led a group of financial stocks to its biggest gain in almost 10 years, after U.S. lender Wells Fargo & Co reported earnings that were better than analysts estimated.
Energy producers including EnCana Corp. declined as crude oil and natural gas fell on concern a slowing global economy will curtail demand for fuel. Gold miner Aurelian Resources sank as commodities prices, including copper, aluminum and gold, fell to the lowest in a month.
Wells Fargo & Co., the second-biggest U.S. mortgage lender, rose the most since at least 1980 after reporting net income of 53 cents a share, beating the average estimate of analysts in a Bloomberg survey, and raising its dividend.
``Wells Fargo earnings made people less pessimistic about financial institutions,'' said Ian Nakamoto, research director at MacDougall, McDougall and MacTier Inc. in Toronto, which manages about $4.8 billion. ``We're closer to the bottom for financial stocks, but who knows if we've reached the bottom.''
The Standard & Poor's/TSX Composite Index rose 1.1 percent to 13,503.80 in Toronto. A gauge of financial stocks advanced 5.5 percent, the biggest gain since November 1998. The group has still fallen 18 percent this year, the second worst performance of 10 industry indexes, on writedowns stemming from the slump in U.S. subprime mortgage market.
Toronto-Dominion leapt 7.6 percent to C$57.57. National Bank of Canada, The country's sixth-largest lender jumped 8.5 percent to C$49.64, for its biggest gain since November 2007.
Energy Companies
EnCana slid 3.2 percent to C$80.60. Suncor Energy Inc., the second-largest oil-sands miner, fell 2.3 percent to C456.60. Birchcliff Energy, whose biggest shareholder is Canadian billionaire Seymour Schulich, dropped the most since April 23, falling 5.4 percent to C$13.87.
Aurelian Resources helped push a group of raw-material shares 1.3 percent lower. The gold exploration company plunged 6.5 percent to C$4.46. Gold retreated 1.6 percent.
``With the global economy slowing, the sentiment is that there's just one way for energy and material stocks to go and that's down,'' Nakamoto said. ``Investors are rotating out of energy and material producers and buying financial and consumer stocks, such as Research in Motion.''
RIM, as the maker of the Blackberry e-mail phone is also known, climbed 4.5 percent to C$111.
Oil prices slid more than $4 a barrel in New York to $134.60 a barrel, after dropping to as low as $132, more than 10 percent below the record of $147.27 reached on July 11. A gauge for energy shares in the SP/TSX composite index fell 1.9 percent, the lowest in a week.
The 19 commodities in the Reuters/Jefferies CRB Index gained 29 percent in the first half of the year, the most since 1973, according to Bloomberg data. The index has fallen 6.1 percent since reaching a high for the year on July 2.