Canadian Stocks May Fail to Extend October Rally as Oil Dropsadmin
Canadian stocks may struggle to build on this month’s rally as energy producers such as Petro-Canada may fall along with oil prices.
Losses in the market may be limited after Alcan Inc. and Rogers Communications Inc. reported earnings that exceeded analysts’ estimates.
The Standard & Poor’s/TSX Composite Index may also be supported by higher prices for industrial metals and a report showing the resource industries helped Canada’s economy grow 0.3 percent in August.
The S&P/TSX index yesterday added 5.54, or 0.1 percent, to 12274.40. The benchmark is up 4.4 percent in October, heading for its best monthly gain since a 6 percent gain in January.
Crude oil for December delivery dropped as much as 70 cents, or 1.2 percent, to $57.66 a barrel in New York. Yesterday oil had its biggest one-day decline in more than a year on forecasts that warm U.S. weather will curb demand.
Petro-Canada, the nation’s third-largest oil and gas producer, was shown slipping 20 cents to C$47.15, according to bids submitted on the Toronto Stock Exchange. Suncor Energy, the world’s biggest oil-sands miner, may decline 32 cents to C$84.11.
Shares of Alcan may climb 27 cents to C$51.45, according to bids. The world’s second-largest aluminum producer said third- quarter net income climbed more than fivefold to $456 million, or $1.20 a share, from $8 million, or 21 cents, as metal prices rallied and demand improved from industrial consumers. The company was expected to earn $1.23 a share, the average estimate of 19 analysts surveyed by Thomson Financial, which does not disclose the parameters of the forecasts.
Rogers Communications Inc. was shown adding 81 cents to C$65. Canada’s biggest mobile phone and cable-television company said third-quarter net income trebled to C$154 million, or 48 cents a share, from C$48.9 million, or 16 cents, as operating profits at its wireless unit increased by half. The average estimate of 14 analysts in a Thomson survey was for per-share earnings of 38 cents.
Rogers also said that it plans to split its stock two-for- one and double the annual dividend to 32 cents a share from 15 cents.
Zinc futures rose 2 percent to a $4,255 a metric ton in London, improving a record for a fifth straight trading session as inventory declines and production disruptions curbed supply of the metal used to galvanize steel. Copper, aluminum and nickel also climbed.
Canada’s gross domestic product, the sum of all goods and services, grew 0.3 percent in August, led by commodity production and consumer spending.
Mining and energy rose 1.6 percent and retailing rose 1.1 percent on new car sales, Statistics Canada said today in Ottawa. The increase, which was the highest in six months, matched economists’ expectations and was more than the 0.2 percent the agency reported for July.
U.S. Stock-Index Futures
U.S. stock-index futures rose before a report that may show falling gasoline prices lifted consumer confidence ahead of the holiday shopping season.
S&P 500 Index futures expiring in December rose 2.20 to 1385.40 at 8:48 a.m. in London. Dow Jones Industrial Average futures added 10 to 12,132. Nasdaq-100 Index futures increased 4.50 to 1741.25.
A report from the Conference Board may indicate confidence among U.S. consumers rose this month to 108, according to the median forecast of analysts surveyed by Bloomberg News. That would be the highest level in six months and compares with 104.5 in September. The report is scheduled for 10 a.m. New York time.
The following is a list of companies whose shares may have unusual price changes in Canadian markets. This preview includes news that broke after markets closed yesterday. Symbols are in parentheses after company names and prices are from the last close.
Cameco Corp. (CCO CN): The world’s largest supplier of uranium said flooding at an unfinished mine in Canada will delay initial shipments of the nuclear fuel by at least a year. Uranium prices surged 7 percent to a record after the announcement. Cameco’s shares rose 75 cents, or 3.2 percent, to C$24.25.
Canadian Tire Corp. (CTC/A CN): The retailer of auto parts and retail goods said in a Canada NewsWire release that it will sell 40 acres of surplus land at the site of a former warehouse near Toronto for C$149.7 million ($133 million). The company plans to record a gain of about C$51 million after the transaction closes at the end of November. Canadian Tire rose $1.45, or 2.1 percent, to C$71.85.
Com Dev International Ltd. (CDV CN): The maker of satellite sub-systems said that it received a contract of C$14 million from the European Space Agency. In a separate statement, the company said it was awarded $8.8 million to build equipment for a German military communications program. Com Dev fell 12 cents, or 1.9 percent, to C$6.09.
NovaGold Resources Inc. (NG CN): The bullion miner urged investors to reject Barrick Gold Corp.’s (ABX CN) sweetened $1.71 billion bid and said major shareholders indicated they won’t tender their stock in the offer. Barrick’s hostile bid of $16 a share “still fails to offer appropriate value for world-class mineral projects and growth potential,” Vancouver-based NovaGold said in a statement. Novagold added 15 cents, or 0.9 percent, to C$17.75. Barrick climbed 50 cents, or 1.5 percent, to C$34.
Russel Metals Inc. (RUS CN): The Mississauga, Ontario-based steel distributor said in a statement that third-quarter profit rose to 71 cents a share from 54 cents a share. That’s more than the average estimate of 67 cents of four analysts surveyed by Thomson. Russel fell 30 cents, or 1 percent, to C$28.70.
Teck Cominco Ltd. (TCK/B CN): The world’s largest zinc miner said third-quarter net income rose 24 percent to C$504 million ($447.7 million), or C$2.32 a share, from C$405 million, or C$1.88, on higher copper and zinc prices. Excluding one-time items such as costs associated with a failed bid this year to buy Canadian nickel producer Inco Ltd. (N CN), earnings were about $2.47 a share. A Thomson survey of 12 analysts had an average forecast of C$2.66. Teck fell C$2.43, or 2.8 percent, to C$83.50.
Yellow Pages Income Fund (YLO-U): Canada’s biggest directories publisher said that third-quarter net income rose 64 percent to C$119.5 million, or 23 cents a unit, from C$72.7 million, or 15 cents, due to contributions from acquired businesses such as Trader Media Corp. and Classified Media (Canada) Holdings Inc. The average forecast of four analysts surveyed by Thomson was for per-unit earnings of 21 cents. Yellow Pages added 25 cents, or 1.7 percent, to C$15.
To contact the reporter on this story: John Kipphoff in Toronto at firstname.lastname@example.org .