S&P/TSX Closes Above 14,000 for First Time Since ‘11 on Earnings

Feb 13, 2014 4:32 pm ET

Feb. 13 (Bloomberg) -- Canadian stocks rallied, with the benchmark index closing above 14,000 for the first time in almost three years, as financial shares rose on improving earnings and mining companies gained as gold topped $1,300 an ounce.

Barrick Gold Corp. and Goldcorp Inc. added at least 3.6 percent after reporting fourth-quarter earnings. Canadian Tire Corp. climbed 3.1 percent as earnings topped estimates and same- store sales increased. Teck Resources Ltd. sank 6.7 percent as results were hampered by declining coal and copper prices. Bombardier slumped 8.9 percent after cutting its profit targets. Nautilus Minerals Inc. dropped 10 percent as the undersea metals explorer terminated its pact with Papua New Guinea.

The Standard & Poor’s/TSX Composite Index rose 101.16 points, or 0.7 percent, to 14,001.65 at 4 p.m. in Toronto to close above the 14,000 level for the first time since April 2011. The benchmark index has jumped 3.8 percent in eight straight days of gains, the longest rally since September 2010.

“It has to do with expectations, for instance with Barrick the numbers were negative but expectations weren’t that high so as a result the stock moves higher,” said Bruce Campbell, fund manager with StoneCastle Investment Management Inc. in Kelowna, British Columbia. He manages about C$100 million ($90.9 million) with the firm. “In some cases stocks are starting off weaker and then moving up after some panic dumping. The market probably eases up barring something more macro that scares everyone.”

Canadian shares fell earlier as U.S. data showed retail sales declined the most since June 2012 in January, sliding 0.4 percent as poor weather kept customers away from auto showrooms and stores. Jobless claims unexpectedly increased to 339,000 last week, from 331,000 in the prior period.

Barrick

Barrick Gold, the world’s largest gold producer by sales, added 6.1 percent to C$22.08 and Goldcorp rose 3.6 percent to C$29.64.

Barrick reported a net loss of $2.83 billion, ahead of a loss of $3.01 billion a year earlier. Goldcorp’s average cost to produce and sell gold, adjusted for the sale of silver and other metals, was $467 an ounce, compared with the $484 average of five estimates compiled by Bloomberg.

B2Gold Corp. increased 6.1 percent to C$2.96 and Iamgold Corp. climbed 4.2 percent to C$4.43 as the S&P/TSX Gold Index rallied 4 percent. The price of gold increased 0.4 percent to $1,300.10 an ounce in New York for a seventh straight session, the longest rally since 2011.

Telus Corp. rose 0.7 percent to C$37.33 after adding more than expected wireless customers in the fourth quarter. The Vancouver-based wireless carrier reported a 3.4 percent increase in sales.

Home Capital Group Inc., a mortgage and credit card services company, soared 8.6 percent to C$83.13, the most since 2009. The company said 2014 earnings will rise 13 percent to 18 percent and boosted its quarterly dividend to 32 Canadian cents a share from 28 cents.

Canadian Tire Sales

Canadian Tire jumped 3.1 percent to C$97.69, the most since August, as consumer discretionary stocks advanced 0.5 percent as a group. Nine of 10 industries in the gauge rose on trading volume 62 percent higher than the 30-day average.

Canadian Tire, the home hardware and sports equipment retailer, reported fourth-quarter earnings of C$2.35 a share, ahead of analysts’ estimates of C$2.26. Same-store sales, a measure of performance among locations open for at least a year, rose 4 percent in Canadian Tire stores in the quarter.

Teck Resources slumped 6.7 percent to C$26, the most since June. Sales declined to C$2.38 billion from C$2.73 billion a year ago as copper prices declined 10 percent in the fourth quarter compared with a year earlier.

Nautilus Minerals plunged 10 percent to 22.5 Canadian cents after terminating its agreement with Papua New Guinea as the country has not completed purchase of its 30 percent stake in the offshore Solwara 1 project. The company will seek damages.

Bombardier slumped 8.9 percent to C$3.68, the lowest since December 2012, after it lowered its projection for earnings before interest and taxes in its planemaking business to 5 percent of revenue from 6 percent. Earnings in its rail division will also fall short of targets.

--Editor: Michael P. Regan