Canadian Stocks Rise as Energy Stocks, EnCana Rebound With Oil

Canadian stocks gained for the first time in four days as such energy shares as EnCana Corp. gained along with crude oil, whose price rebounded to almost $69 a barrel.

Raw-materials shares including Teck Cominco Ltd. and Alcan Inc., the target of a takeover offer from Alcoa Inc., recovered from earlier drops and rose on prospects of continued global demand for resources, and more takeovers.

The Standard & Poor's/TSX Composite Index advanced 78.04, or 0.6 percent, to 13,741.92 in Toronto. It fell as much as 0.9 percent earlier as crude oil dropped and had lost 3.1 percent in the previous three days on declines in oil, natural-gas, gold and copper prices.

``We've had a few days of sloppiness in resources across the board. With oil at almost $69, how bad can it be?'' said Paul Hand, managing director, equity trading, at RBC Capital Markets in Toronto. ``There's not enough evidence that the outlook for commodities has really changed. China is still growing. There's still a bid for Alcan.''

A gauge of energy stocks, which includes producers of the nuclear fuel, advanced 0.8 percent today after dropping 4.8 percent in three sessions. Raw-material shares added 0.9 percent as a group.

EnCana, Canada's biggest natural-gas producer, rose C$1.05 to C$66.43. Smaller rival Canadian Natural Resources Ltd. climbed C$1.18 to C$69.63. Suncor Energy Inc., the world's second-biggest oil-sands producer, added 62 cents to C$93.25.

Crude oil for August delivery surged 1.8 percent to $68.97 a barrel in New York, after a government report showed an unexpected decline in U.S. gasoline inventories last week. Oil fell to a nine- day low before the report's release at 10:30 a.m. in Washington. Prices are up 4.1 percent from a year ago.

Nuclear Fuel

Shares of uranium miners Cameco Corp. also climbed today after dropping yesterday. Cameco gained C$1.75, or 3.4 percent, to C$53.75. The world's biggest uranium producer had its steepest decline in five months yesterday as uranium stocks fell on concern the price of the radioactive mineral may have peaked.

Not all energy stocks advanced. InterOil Corp. dropped C$6.53, or 19 percent, to C$27.96, falling for a second day. The company said in a statement today that its Elk-2 well in the Southeast Asian island nation needs to be drilled deeper before ``more definite results'' on possible commercial amounts of hydrocarbons are available. The stock has lost C$571 million ($533.4 million) in market value in two days.

Copper rose the most in a week in New York, erasing an earlier drop to the lowest since June 13, on speculation that labor unrest may disrupt supplies from Chile, the world's largest source of the metal.

Mining Shares

Teck Cominco, a miner of zinc and copper, added 64 cents to C$45.94.

Alcan, which is the target of $27.7 billion hostile bid from rival Alcoa Inc., advanced C$1.32 to C$87.

Eastern Platinum Ltd. climbed 18 cents, or 8.6 percent, to C$2.27 after falling 16 percent in the previous five days. Canada's largest platinum producer gained today as the metal used in jewelry and catalytic converters rose on speculation declines in the two prior sessions were overdone.

An index of phone shares advanced 1.1 percent.

Shares of Telus Corp. rose C$1.33, or 2.1 percent, to C$63.52. The nation's second-biggest phone company rose for a second day after yesterday dropping out of the bidding for larger rival BCE Inc. BCE added 16 cents to C$39.65. Yesterday it received bids from three investor groups including Kohlberg Kravis Roberts & Co., Cerberus Capital Management LP and Ontario Teachers Pension Plan. A sale of BCE, with a market value of C$31.7 billion, would be Canada's biggest takeover ever.

Rogers Communications Inc., the country's largest mobile phone and cable television provider, gained 80 cents to C$45.52.

The following shares had unusual price changes.

CHC Helicopter Corp. (FLY/A CN) rose C$1.40, or 6 percent, to C$24.61. The world's largest supplier of helicopter services to the offshore oil and gas industry said that fourth-quarter profit rose 25 percent to C$13.5 million ($12.6 million) from C$10.8 million as it carried more energy workers between rigs. Scotia Capital analyst Chris Blake in Toronto raised his earnings estimates for 2008 and 2009, saying in a note that the company beat his profit forecast thanks to higher-than-expected flying rates and repair and overhaul work.

Osprey Media Income Fund (OSP-U CN) rose C$1.03, or 14 percent, to C$8.25. The newspaper publisher said it received a takeover bid of about C$404 million ($377 million) from Black Press Ltd., topping a previous offer of C$7.25 per share from a unit of Quebecor Inc. (IQW CN). Quebecor shares added 49 cents, or 1.2 percent, to C$39.90.

Alcan Inc. (AL CN)
BCE Inc. (BCE CN)
Cameco Corp. (CCO CN)
Canadian Natural Resources Ltd. (CNQ CN)
EnCana Corp. (ECA CN)
Eastern Platinum Ltd. (ELR CN)
InterOil Corp. (IOL CN)
Rogers Communications Inc. (RCI/B CN)
Suncor Energy Inc. (SU CN)
Telus Corp. (T CN)
Teck Cominco Ltd. (TCK/B CN)

source:bloomberg.com