Canada Stocks Advance on U.S. Confidence, Jobless Data

Canadian stocks rose, after falling the most in two months yesterday, amid an unexpected increase in U.S. consumer confidence and a decline in U.S. jobless claims.

Novagold Resources Inc. jumped 7.9 percent, pacing gains among raw-materials producers. Canadian Oil Sands Ltd. and Lightstream Resources Ltd., both oil exploration companies, dropped at least 1.4 percent amid a report showing U.S. crude stockpiles continued to increase. Trinidad Drilling Ltd. fell 5.3 percent after reporting its plan to raise C$150 million ($142 million) through a stock sale.

The Standard & Poor's/TSX Composite Index (SPTSX) gained 12.29 points, or 0.1 percent, to 13,362.06 at 4 p.m. in Toronto. The benchmark equity gauge is little changed for the month, and up 7.5 percent so far in 2013. Trading volume today was 21 percent below the 30-day average.

"Any sort of data that points to consumers being more willing to spend is a positive for the markets," Jeff Young, chief investment officer at NexGen Financial Corp., said in a phone interview. The Toronto-based firm manages about C$950 million. "If the consumer is more confident and starts to spend more, that translates into higher revenues for companies."

The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier. Fewer Americans than projected filed applications for unemployment benefits last week, a sign that the labor market is showing resilience.

Railroads Gain

Seven of 10 industries in the S&P/TSX advanced, led higher by raw-materials producers. The group added 0.8 percent, halting a five-day losing streak. Novagold Resources surged 7.9 percent to C$2.45, it's biggest increase since Oct. 17, and Detour Gold Corp. rose 4 percent to C$3.63.

Iamgold Corp. added 2.1 percent to C$4.41, rebounding from a 4.2 percent slide yesterday. The company said it will build a 5-megawatt solar farm in Suriname to minimize energy costs. The project will cost as much $14 million and start producing energy in the third quarter of next year, Toronto-based Iamgold said.

Industrial stocks added 0.6 percent, as Air Canada rose 1.9 percent to C$7, its highest since June 2008. Canadian Pacific Railway Ltd. added 1 percent to C$161.18 and Canadian National Railway Co. climbed 1 percent to C$118.61.

Energy companies retreated for a third day, as the price of oil fell to the lowest level in almost six months after government data showed U.S. crude stockpiles climbed for a 10th week. Oil is Canada's biggest export, while the U.S. is its largest trading partner.

Oil Slump

Canadian Oil Sands fell 1.6 percent to C$19.81, while Lightstream Resources dropped 1.4 percent to C$5.41.

Trinidad Drilling fell 5.3 percent to C$9.92. The company plans to sell 15 million shares at C$10 each and use the proceeds to finance capital expenses and for general corporate purposes.

First Quantum Minerals Ltd. (FM) lost 3.4 percent to C$17.28 for its eighth retreat in nine sessions. The company said today it "strongly disputed" a claim by noteholders that a default has occurred on bonds issued by Inmet Mining Corp., a company it bought this year.

Slower growth in consumer debt and a cooler housing market will allow the Bank of Canada to wait until early 2015 to raise interest rates as it waits for a pick-up in exports, the International Monetary Fund said.

Bank of Canada Governor Stephen Poloz last month abandoned his bias to raise interest rates and issued a monetary policy report that said a forecast increase in exports and business investment had been delayed. Canada's inflation was an annual 0.7 percent in October, Statistics Canada said Nov. 22, below the bottom of the central bank's target band.

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Policy makers "should remain focused on sustaining growth until the rotation to exports and business investment gains firmer momentum, while assuring that the gradual unwinding of domestic imbalances continues and that the fiscal position is maintained on a sustainable trajectory," the IMF said today.