Jan. 14 (Bloomberg) -- Canadian stocks rose, rebounding from the worst drop in a month yesterday, as Corus Entertainment Inc. posted higher-than-estimated profit and Bank of America Corp. advised buying Thompson Creek Metals Co. shares.
Corus Entertainment, which operates television stations, climbed 3.3 percent. Thompson Creek surged 19 percent after Bank of America raised its rating on the stock to buy from underperform. Canexus Corp., a chemical maker, sank 12 percent after saying costs for a train expansion will be about 40 percent higher than previous forecasts. Pinecrest Energy Inc. plunged 41 percent after production in December fell short of previous guidance.
The Standard & Poor’s/TSX Composite Index rose 10.90 points, or 0.1 percent, to 13,692.38 at 4 p.m. in Toronto. The benchmark equity gauge has advanced 0.5 percent this year.
“We’re getting a little bit of a bounce back from yesterday’s pretty weak day and also retail sales in the U.S. were higher than estimated,” said Anish Chopra, fund manager at TD Asset Management Inc. in Toronto. He helps manage C$218.3 billion ($199.6 billion) with the firm. “Earnings that exceed expectations are a fantastic backdrop for stronger market performance.”
U.S. retail sales increased 0.2 percent in December, exceeding the median forecast for a 0.1 percent gain, according to a Bloomberg survey of analysts.
“Canadian equities have more elbow room, with current valuations not as stretched as those stateside,” said Avery Shenfeld, chief economist with CIBC World Markets, in a note to clients. “The TSX has outperformed the S&P in each of the last six years in which global growth has topped 4 percent, and 2014 should add to that streak.”
Raw-materials stocks rose 0.6 percent as a group. Six of 10 industries in the S&P/TSX advanced on trading volume 31 percent higher compared with the 30-day average.
Thompson Creek surged 19 percent to C$2.82. The company reported yesterday that molybdenum production climbed 34 percent to 30 million pounds in 2013. The stock has four buys, eight holds and four sell ratings from analysts, according to data compiled by Bloomberg. The stock’s 12-month share-price target is C$3.27, implying a 16 percent rally from current levels.
Allied Nevada Gold Corp. soared 7 percent to C$5.02 after China Gold Stone Mining Development Ltd. retracted a $779.6 million offer for the company that it said was published in error.
Allied Nevada said it received a letter from closely held China Gold Stone yesterday, which included the proposed offer. The stock jumped as much as 52 percent to $6.55 in pre-market trading in New York before Allied Nevada halted trading. The company said it questioned the credibility of the bid.
Telephone stocks rallied after Wind Mobile yesterday withdrew from a spectrum auction. The company’s principal backer, VimpelCom Ltd., decided not to fund its bid, Wind Chief Executive Officer Anthony Lacavera said in an e-mail.
The mobile-phone company’s exit ruins the government’s plans to open the market to more competitors, said David Heger, a St. Louis-based analyst with Edward Jones & Co.
Rogers Communications Inc. increased 1.7 percent to C$47.86, Telus Corp. added 0.7 percent to C$37.03 and BCE Inc. rose 0.7 percent to C$46.72. Telephone stocks rallied 0.8 percent as a group in the S&P/TSX.
Corus Entertainment added 3.3 percent to C$25.40 after reporting first-quarter earnings of 65 Canadian cents a share, higher than the average estimate of 62 cents. The media company also raised its dividend 6.9 percent for Class A and Class B shares, to an annual payout of C$1.085 and C$1.09 respectively.
Canexus plunged 12 percent to C$6.57, the biggest decline since November 2008. The firm said its pipeline connected train expansion will now cost about C$315 million, more than the earlier estimate of C$225 million. The company plans to pay for the rising costs using its credit facilities and the project remains on track for completion in mid 2014.
Pinecrest Energy sank 41 percent to 22 Canadian cents, the lowest close in its history. The Calgary-based company said it averaged production of 2,308 barrels of oil equivalent per day in December, below previous guidance. Pinecrest cited bigger- than-expected declines at three of its drilled wells.
--Editor: Lynn Thomasson