Canadian stocks fell for a third day after the U.S. reported a smaller increase in durable-goods orders than forecast and an unexpected drop in home sales.

Manulife Financial Corp., North America’s third-largest insurer, dropped 2.9 percent as U.S. new-home sales slumped to their lowest level on record. Canadian Imperial Bank of Commerce, the country’s fifth-biggest bank, rose 1 percent after reporting third-quarter earnings that beat analyst estimates. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.5 percent as natural gas fell for a sixth day.

The Standard & Poor’s/TSX Composite Index decreased 61.02 points, or 0.5 percent, to 11,496.33 at 10:25 a.m. in Toronto after touching a five-week low of 11,478.74.

The S&P/TSX has slipped 1.9 percent this month even with a 45 percent surge in Potash Corp. of Saskatchewan Inc., the target of a takeover bid from BHP Billiton Ltd. Canadian stocks have dropped as data on U.S. unemployment, housing and manufacturing have indicated a slowdown in the recovery in Canada’s largest trading partner.

Stocks extended losses after the Commerce Department reported new-home sales plunged 12 percent from June to an annual pace of 276,000, the lowest since data began in 1963. Economists forecast sales would remain steady at an annual rate of 330,000, the median estimate in a Bloomberg survey.

Natural gas futures dropped below $4 per million British thermal units for the first time in three months on speculation the faltering recovery will reduce demand.

Energy Shares

Suncor declined for a sixth day, losing 2.5 percent to C$31.32. Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, decreased 2.1 percent to C$32.21. EnCana Corp., Canada’s biggest natural gas producer, retreated 1.4 percent to C$27.78.

CIBC said it earned C$1.66 a share in the third quarter, excluding certain items, topping the average of 13 analyst estimates by 8.3 percent. Profit rose 47 percent from a year earlier as the Toronto-based bank set aside less money for bad loans. CIBC rallied 1 percent to C$67.45.

Most other banks and insurance companies slipped. Manulife, which gets most of its revenue from the U.S., fell 2.9 percent from a 17-month low to C$11.37.

Insurer Sun Life Financial Inc., which derived 47 percent of its revenue from the U.S. last year, dropped 2.2 percent to C$23.65. Toronto-Dominion Bank, which has 1,043 U.S. branches, declined 1.6 percent to C$68.32.

Bid Unlikely

Potash Corp., which rallied 35 percent through Aug. 23 after BHP’s unsolicited offer became public on Aug. 17, fell 1 percent to C$156.28. Rio Tinto Group is unlikely to try to outbid BHP, which has offered $39 billion, UBS AG analysts said in a report after meeting with Rio Tinto Chief Executive Officer Tom Albanese.

Agrium Inc., Canada’s second-largest fertilizer producer, decreased 1.6 percent to C$69.51.

BlackBerry maker Research In Motion Ltd. rebounded 2.2 percent from a five-month low to C$51.06. Bank of Montreal analyst Tim Long wrote to clients that RIM’s new Torch smartphone is selling well, according to BMO’s contacts among carriers and distributors.

An index of S&P/TSX telecommunications companies slumped the most intraday since July 28 after Toronto-Dominion Bank analyst Vince Valentini reduced his rating on Rogers Communications Inc. two notches to “hold” from “action list buy.”

Rogers, Canada’s largest wireless carrier, retreated 2.7 percent from a 23-month high to C$37. BCE Inc., the country’s biggest telephone company, fell 1.7 percent to C$32,73.

By Matt Walcoff

Tags: commerce department, economists, financial system, home sales, housing market, money, stock market, us unemployment

This entry was posted on Wednesday, August 25th, 2010 at 11:31 am and is filed under Canada Finance, Global Economy, Global Financial, Market Finance, US Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.