CANADA STOCKS-TSX rallies on energy gains; Goldcorp weighs

Wed Jul 11, 2012 4:58pm EDT
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* TSX ends up 32.42 points, or 0.28 pct, at 11,544.64.
    * Energy gains offset mining losses
    * Oil prices rally on Fed stimulus hopes
    * Goldcorp Inc shares plunge 10 percent

    By Jon Cook
    TORONTO, July 11 (Reuters) - Canadian stocks rose for the
first time in a week on Wednesday, boosted by energy shares on
hopes of further stimulus from the U.S. Federal Reserve. But
gains were limited after the country's second-largest gold
miner, Goldcorp Inc, cut its outlook.
    U.S. oil futures climbed when minutes from a Federal Open
Market Committee meeting in June showed policymakers are open to
buying more bonds to stimulate the U.S. economy, but conditions
might need to worsen first.  
    The Fed last month expanded its latest effort to keep
long-term interest rates low, announcing it would buy an
additional $267 billion in long-term bonds with proceeds from
short-term notes in a measure known as Operation Twist. But the
market was anticipating more easing measures after Friday's
disappointing jobs report. 
    "We didn't get anything new from the FOMC today," said Mike
Newton, associate director and portfolio manager at Macquarie
Private Wealth Inc. "It's a very benign day."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 32.42 points, or 0.28 percent, at 11,544.64.
However, thin summer volume exaggerated moves and kept markets
    "It's probably the normal reaction to four down days in a
row," said John Kinsey, portfolio manager at Caldwell Securities
    Seven of Canada's 10 main sectors rose, led by the
heavyweight energy group, which advanced 1.7 percent.
    The biggest movers on the energy side included: Suncor
Energy, which climbed 1.8 percent to C$29.25, Cenovus
Energy, up 3.2 percent at C$33.28, and Canadian Natural
Resources, up 2.4 percent to C$26.46.
    Shares of Niko Resources Ltd surged 14 percent to 
C$14.05 after the oil and gas producer said its Ratnadewi-1 well
in Indonesia is ahead of schedule. 
    However, gains were pressured by Goldcorp, whose
shares plunged more than 10 percent to C$33.80 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. 
    The Goldcorp news had an adverse impact on the heavily
weighted materials sub-index, which fell 1.9 percent. Barrick
Gold, the world's top gold miner, slumped 1.9 percent
to C$35.66.
    "The last thing we needed was such a major sector to get
knocked with such bad news out of Goldcorp," said Newton.
"There's a lot of people cheering for (gold) names, but the
reality and the evidence is contrary. It's just been a
disastrous trade."    
    Gold and base metals mining shares have been hurt by weak
global demand. Bullion rose o n W ednesday but remained near its
one-year low and copper prices retreated after the Fed minutes
signaled no further action was imminent.  
    China's June trade data on Tuesday stoked anxiety about the
strength of domestic demand in the world's second-biggest
economy, with attention now turning to GDP numbers that are
expected to show the economy recorded its worst performance
since the 2008/09 financial crisis. 
    Canada's trade deficit widened in May, fueled by record
imports while exporters struggled to make any progress in the
face of the European economic crisis. 
    Financial shares shrugged off the news, rising 0.7 percent.
Bank of Nova Scotia advanced 1.1 percent to C$53.06,
Royal Bank of Canada edged up 0.6 percent at C$52.80 and
Bank of Montreal climbed 0.8 percent to C$57.61.
    Concerns about debt-ravaged Europe were heightened by lack
of clarity 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 4.8 percent to C$48.10 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.