Canadian Stocks May Decline

Canadian stocks may fall for a third day, led by such commodity producers as Aur Resources Inc. and Suncor Energy Inc. as prices for some metals and crude oil extend declines.

Losses in the market may be limited as shares of BCE Inc. rise on expectations takeover bids today may reach as much as C$45 a share for Canada's biggest phone company.

The Standard & Poor's/TSX Composite Index fell 144.17, or 1 percent, to 13,841.86 yesterday in Toronto. It's retreated on four of the past five days since reaching a record last week as gold prices declined and natural-gas futures fell. On June 18, the benchmark, which is up 7.2 percent this year, closed at a record 14,176.42 amid rising commodity prices and takeover speculation.

``We're overdue for a 5 percent to 10 percent correction within a continued bull market,'' said Jackee Pratt, who helps manage $712 million at Mavrix Fund Management in Toronto. ``We've seen the market come up so much. Sometimes you get a sideways correction where you trade in a range for a month or so.''

Lead fell the most in a month on the London Metal Exchange, erasing earlier gains. Earlier, the contract reached a record for a fifth consecutive session. Gold also fell in London for a second consecutive day after a decline in crude oil reduced the appeal of the precious metal as a hedge against inflation.

Aur Resources, a miner of copper, may drop 76 cents to C$31.85, based on bids already submitted on the Toronto Stock Exchange.

Alcan Inc., the aluminum maker facing a hostile bid from rival Alcoa Inc., may decline 41 cents to C$87.25, bids indicated.

Kinross Gold Corp., Canada's third-largest bullion miner, may slip 8 cents to C$13.07, according to bids.

Oil Falls

Crude oil for August delivery fell as much as 0.7 percent to $68.67 a barrel in electronic trading in New York, on expectations rising imports helped U.S. stockpiles increase for a fifth straight week. Oil traded at $69.07 most recently.

Suncor Energy, the world's second-biggest oil-sands producer, may decline 31 cents to C$94.49.

Shares of BCE Inc. may climb 9 cents to C$40.81, bids showed. Onex Corp. (OCX CN), Canada's biggest buyout firm, and pension fund Caisse de Depot et Placement du Quebec withdrew from a group examining a bid for BCE, Canada's largest telephone, amid ``concerns about the process,'' the Globe and Mail reported, without saying where it obtained the information. They also exited the group, which is led by Canada Pension Plan Investment Board and includes New York-based private equity firm Kohlberg Kravis Roberts & Co., because Telus Corp. joined the fray last week, the newspaper said.

Bidding

Telus and groups led by the Ontario Teachers' Pension Plan and Cerberus Capital Management LP were still expected to bid by today's 9 a.m. deadline, the Globe and Mail reported. The Ontario Teachers' Pension Plan, Canada's third-largest pension fund manager, plans to make a takeover bid for BCE, spokeswoman Debra Hanna said. Ontario Teachers', the largest shareholder of BCE, will submit a bid with partner Providence Equity Partners Inc., Hanna said in a telephone interview yesterday.

Onex may gain 71 cents to C$37.58, according to bids. Telus shares may drop 49 cents to C$61.51.

U.S. Stock-Index Futures

U.S. stock-index futures advanced after oil prices fell and analysts recommended buying shares of Apple Inc. and Google Inc.

Reports today on U.S. home prices, new home sales and consumer sentiment will help investors determine the extent of the housing slump and its effect on Americans' confidence. The U.S. is Canada's biggest trading partner.

S&P 500 futures expiring in September added 2.90 to 1516.50 as of 8:27 a.m. in New York. Dow Jones Industrial Average futures increased 16 to 13,495. Nasdaq-100 Index futures rose 3.50 to 1944.50.

The following shares may have unusual price changes. Prices are from the last close.

Cathedral Energy Services Income Trust (CET-U CN): The oil services company was raised to ``outperform'' from ``sector perform'' by Angela Guo at RBC Capital Markets. The analyst expects the stock to rise to C$13 within 12 months. The shares fell 18 cents, or 1.8 percent, to C$9.84.

Nortel Networks Corp. (NT CN): North America's biggest maker of telephone equipment named Steven Bandrowczak chief information officer to oversee the company's computer systems. Bandrowczak previously held the same position at computer maker Lenovo Group Ltd., Toronto-based Nortel said in a statement. He takes over from Bill Donovan, who was Nortel's CIO on an interim basis since last month.

Zarlink Semiconductor Inc. (ZL CN): The maker of microchips for Internet networking equipment agreed to buy closely held Legerity Holdings Inc. for $134.5 million in cash. The transaction should close in late July, Ottawa-based Zarlink said in a statement distributed by Canada NewsWire. The shares fell 3 cents, or 1.6 percent, to C$1.86 before trading was halted in Toronto. The shares gained 6 cents, or 0.2 percent, to C$25.84.

source:bloomberg.com