By John Kipphoff
Oct. 31 (Bloomberg) -- Canadian stocks fell, capping their worst monthly slide in a decade, as commodity and finance companies dropped on lower gold and oil prices and concern that profits will be hurt by a recession.
Goldcorp Inc. led mining shares' largest monthly slide on record after the company's profit missed estimates. EnCana Corp. led energy producers' retreat. Manulife Financial Corp. fell after being downgraded at UBS AG. Research In Motion Ltd. rose.
``The month has been awful,'' said John Stephenson, who helps to oversee about $1.5 billion at First Asset Investment Management Inc. in Toronto. ``We got whipsawed by the currency and the commodities -- that hurt our equity valuations. I think the trend is up from here, but the path will be rocky.''
Reports showed Canada's economy shrank 0.3 percent in August and U.S. consumer spending slid more than forecast last month. October was the worst month in almost six decades for the Canadian dollar, and a commodities gauge is headed for its biggest monthly retreat in 52 years. The Standard & Poor's/TSX Composite Index fell 1 percent to 9,762.76 today in Toronto.
Canada's main stock benchmark, which derives three-quarters of its value from resource and finance shares, rallied 15 percent in the previous three days after stock valuations fell to the lowest on record on Oct. 27 and central banks around the world cut borrowing costs to unlock credit, seeking to avert a recession. The S&P/TSX still fell 17 percent in October, the most since a 20 percent drop in August 1998.
Misses Estimates
Goldcorp retreated 8.1 percent to C$23.04 and slid 33 percent in October. The world's second-largest gold producer by market value said third-quarter profit rose almost fourfold to $297.2 million (C$363.22 million). The company said that it earned 9 cents a share excluding certain items. That missed the 14 cents average estimate of 19 analysts in a Bloomberg survey.
Larger rival Barrick Gold Corp. dropped 7.8 percent to C$27.56, taking its drop in October to 29 percent, the biggest such slide since the October 1987 stock market crash. Potash Corp. of Saskatchewan Inc., the biggest maker of crop nutrients, fell 0.9 percent to C$102.60 today and lost more than a quarter of its value this month.
Gold futures fell to $718.20 an ounce in New York today after the U.S. dollar rose, reducing the investment appeal of the metal and other commodities. Gold extended its decline this month to 18 percent, the worst in 28 years, while wheat prices slid the most since 1980.
Commodities Slump
The Reuters/Jefferies CRB Index of 19 raw materials headed for its worst month since at least 1956 on concern a slump in global growth will sap commodity demand. Crude oil futures surged in the last minutes of the floor-trading session in New York as traders unwind positions on the final day of transactions for the November gasoline and heating-oil contracts. Oil still fell a record 33 percent in October.
EnCana, the nation's largest energy company by market value, dropped 2.2 percent to C$61.23. Canadian Natural Resources Ltd. fell 2.4 percent to C$60.82.
ARC Energy Trust jumped 13 percent to C$18.28 for its steepest climb since Oct. 14. The oil and gas income trust reported third-quarter earnings that exceeded analysts' forecasts and said that valuations and gas reserve estimates for its land in the Montney region of British Columbia increased. ARC had its share-price target raised to C$20.50 from C$19 by UBS AG analyst Grant Hofer in Toronto.
A measure of energy shares fell 0.5 percent after dropping as much as 4 percent earlier. The group slid 18 percent in October. A gauge of raw-materials stocks slipped 5.1 percent today and fell a record 31 percent this month even after climbing 29 percent in the previous three days.
Historic Swings
``The swings that we're seeing are historic, and people just don't know what to make of it,'' said Patricia Lovett-Reid, a senior vice president at TD Waterhouse in Toronto. ``It's the volatility that's driving the fear.''
Manulife slid 3.5 percent to C$24.12 and took its monthly loss to 37 percent, the worst ever. North America's biggest insurance company by assets was downgraded to ``neutral'' from ``buy'' by Andrew Kligerman at UBS, who revised his valuations for U.S. life insurers, citing ``sharp equity market declines, credit market dislocation and a global recessionary outlook.''
Royal Bank of Canada, the nation's biggest lender by assets, fell 1.6 percent to C$46.84.
An index of computer-related stocks added 4.7 percent on speculation that demand for mobile phones may withstand an economic slowdown better than other electronic products.
Research In Motion, the maker of the Blackberry e-mail phones, rose for the first time in three days, adding 6.4 percent to C$61.02.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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