Canadian Stocks Rise as Gold Producers Advance on Weakening U.S. Dollar

Canadian stocks gained for a second day as gold stocks advanced after the Japanese economy and manufacturing in the New York region expanded slower than economists had forecast.

Barrick Gold Corp., the world’s largest producer of the metal, rose 1.2 percent as the U.S. Dollar Index retreated for the first time in six days. Research In Motion Ltd. fell 4.6 percent after Indian officials said the company will allow their government access to its BlackBerry messenger service on request. Viterra Inc., Canada’s largest grain handler, advanced 4.8 percent after Agrium Inc. offered A$1.2 billion ($1.1 billion) for Australian wheat exporter AWB Ltd.

The Standard & Poor’s/TSX Composite Index rose 25.95 points, or 0.2 percent, to 11,554.20 at 1:17 p.m. in Toronto after falling as much as 0.3 percent earlier today.

“It’s an uncertainty about future economic outcomes and monetary problems,” said Todd Johnson, who helps oversee C$220 million ($210 million) as a money manager at BCV Asset Management in Winnipeg, Manitoba. “Those that want to own gold generally have little faith in governments’ ability to curtail the deficit and avoid eventual inflation. If we don’t grow out of this mess, what’s the ultimate solution? And they would say currency debasement at some point.”

The S&P/TSX has been unchanged this year including dividends, compared with a negative total return of 1.8 percent for the S&P 500. A 12 percent surge in gold futures has partially mitigated the impact of a U.S. unemployment rate that has remained at or above 9.5 percent, the highest since 1983.

Eight of the world’s 20 largest gold companies are based in Canada.

Falling Behind China

Japanese gross domestic product increased by an annualized 0.4 percent in the second quarter, the country’s government said, compared with the average economist forecast of 2.3 percent. The country fell behind China for second place after the U.S. among the world’s largest economies.

The Federal Reserve Bank of New York’s general economic index, which measures manufacturing in New York, northern New Jersey and southern Connecticut, rose to 7.1 from 5.1 in July. Economists had forecast a gain to 8, according to the median of 48 economists in a Bloomberg survey.

Gold futures climbed to a six-week high as signs of a faltering global economy boosted the appeal of hard assets.

Barrick gained 1.2 percent to C$45.31. Goldcorp Inc., Canada’s second-largest gold producer, advanced 2 percent to C$42.16. Iamgold Corp., which mines in Africa, South America and Canada, increased 2.8 percent to C$18.96.

E-mail Access

RIM, Canada’s largest technology company, decreased 4.6 percent to C$53.06 to extend its three-day decline to 9.7 percent. Two government officials in New Delhi said today the company is working on a solution to allow the Indian government access to corporate e-mails. On Aug. 12, India said it would shut down some BlackBerry services at the end of the month if the company does not resolve the country’s security concerns.

Viterra surged 4.8 percent to C$8.59 after Agrium, Canada’s second-largest fertilizer producer, topped GrainCorp Ltd.’s bid for AWB. Australian media had reported speculation that Viterra might try to buy the former Australian Wheat Board. On Aug. 13, Viterra reported a 6 percent increase in Australian shipping volumes from June to July, Bank of Montreal analyst Kenneth B. Zaslow told clients in a note.

Brookfield Properties Corp., the owner of New York’s World Financial Center, rallied 3.8 percent to C$15.14 after Citigroup Inc. analyst Michael Bilerman raised his rating on the shares to “buy” from “hold” in a note dated Aug. 13. Bilerman had had a “hold” rating on Brookfield Properties since at least February 2008.

Rebound

Alliance Grain Traders Inc., which calls itself the world’s largest lentil and pea splitting company, plunged 6.9 percent to C$28.50 after reporting a second-quarter loss. All six analysts in a Bloomberg survey had forecast a profit. Earlier today, the shares fell as much as 12 percent, the most since October 2008, when they traded on the TSX Venture Exchange.

Compression-equipment supplier Toromont Industries Ltd. jumped 3.9 percent to C$27.30, extending its three-day gain to 12 percent, the most since 2008. The company said Aug. 12 it earned 28 cents a share in the second quarter, beating the average of seven analyst estimates by 23 percent, excluding certain items.

Bankers Petroleum Ltd., which produces oil in Albania, rebounded 11 percent to C$6.91 after sinking 8.8 percent, the most in 17 months, on Aug. 13. The company reported second- quarter earnings that trailed the average of four analyst estimates by 2 cents a share, or 68 percent, excluding certain items. At least eight analysts have maintained buy or equivalent ratings on the shares since then.