CANADA STOCKS-TSX rises as energy gains offset Goldcorp decline

Wed Jul 11, 2012 1:14pm EDT
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* TSX up 39.32 points, or 0.3 percent, at 11,551.54
    * Energy gains offset mining losses
    * Oil prices rise ahead of Fed minutes
    * Goldcorp Inc shares plunge 10 percent

    By Jon Cook
    TORONTO, July 11 (Reuters) - Canada's main stock index rose
on Wednesday, led higher by oil and gas shares, on hopes of more
stimulus from the U.S. Federal Reserve, offsetting mining losses
after Canada's second-largest gold producer, Goldcorp Inc,
lowered its 2012 outlook.
    Investors were looking ahead to the release of minutes from
the Federal Open Market Committee's June meeting for insight on
what may be needed to trigger a third round of monetary
    The Fed last week decided to extend a bond
maturity-extension program called Operation Twist, but the
market was anticipating more easing measures following Friday's
disappointing jobs report. 
    Seven of Canada's 10 main sectors rose, led by the
heavyweight energy group, which advanced 1.8 percent as U.S. oil
prices climbed on stimulus hopes and on expectations U.S.
inventory data would show crude stocks shrank further. U.S.
Energy Information Administration data later showed that U.S.
crude oil stocks fell more than expected last week after crude
imports dipped and refiners boosted processing rates. 
    "There's more green than we've seen the last four days,"
said John Kinsey, portfolio manager at Caldwell Securities Ltd.
"It's probably the normal reaction to four down days in a row."
    The biggest movers on the energy side included: Suncor
Energy, which climbed 2 percent to C$29.30, Cenovus
Energy, up 3 percent at C$33.20, and Enbridge Inc
, up 1.5 percent at C$40.80.
    Shares of Niko Resources Ltd surged more than 11
percent to C$13.75 after the oil and gas producer said on
Wednesday that its Ratnadewi-1 well in Indonesia is ahead of
    However, gains were pressured by Goldcorp, whose
shares plunged more than 10 percent to C$33.77 after the
influential gold miner lowered its 2012 gold production outlook
on Tuesday due to operational problems at its Red Lake mine in
Ontario and its Penasquito mine in Mexico. 
    "Obviously today is not a good day," said Kinsey. "These are
two of their best mines and they reduced production output
substantially at both of them, so that's going to hurt."
    The Goldcorp news had a negative impact on the heavily
weighted materials sub-index, which fell 1.7 percent. Barrick
Gold, the world's top gold miner, slumped 1.6 percent
to C$35.77. 
    Around 12:50 EDT (1650 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 39.32 points, or 0.3
percent, at 11,551.54. Thin summer volume exaggerated moves and
kept markets volatile.
    U.S. Commerce Department data on Wednesday showed the U.S.
trade deficit narrowed 3.8 percent in May as a rise in exports,
including those bound for Europe and China, eased the pain of a
slowdown in the broader economy. 
    Earlier this month, a private survey showed activity at U.S.
factories declining in June, with new orders falling, including
those for exports.
    Canadian financial shares rose 0.8 percent, led by the major
lenders. Royal Bank of Canada shares edged up 0.8
percent to $C52.90, while Toronto-Dominion Bank climbed
0.7 percent to C$80.08. 
    However, Europe's crisis continues to fester, and on
Wednesday Spanish Prime Minister Mariano Rajoy announced a
swathe of new taxes and spending cuts to meet tough targets
agreed with Europe. 
    Concerns about Spain were heightened by lack of clarity from
euro zone finance ministers on implementing the measures and
questions about when Germany's Constitutional Court would give
its verdict on the new regional bailout fund, known as the
European Stability Mechanism.
    In other company news, Alimentation Couche-Tard Inc
 shares gained 3.5 percent to C$47.50 after the
Canadian convenience store operator reported a sharp increase in
earnings on Tuesday, helped by strong sales, minor acquisitions
and a robust motor fuel business.