Canadian stocks dropped for the second time in three days as energy stocks including Suncor Energy Inc. retreated along with crude oil prices.
Losses in the market were limited after Abitibi-Consolidated Inc. agreed to merge with rival Bowater Inc. to create the continent's third-biggest paper and forest-products company. The Standard & Poor's/TSX Composite Index slipped 33.30, or 0.3 percent, to 12,945.96 in Toronto.
``I don't know where we'd be without the deals and the deal rumors,'' said Stephen Gauthier, a partner in Montreal-based investment firm Gauthier & Cie., which oversees about $17 million. ``Maybe a thousand points lower? Oil prices are falling. We are getting deals, but Abitibi's not enough.''
Crude oil for March delivery fell 2.5 percent to $54.01 a barrel in New York, the lowest since Jan. 22, on speculation U.S. inventories are adequate to meet increased heating demand during the next weeks. Prices are 20 percent lower than a year ago.
Suncor Energy Inc. fell 90 cents to C$86.95.
The world's second-biggest oil-sands miner last week reported that fourth-quarter profit fell by half, as operating and royalty costs increased, while oil and gas prices slid. The company, which plans to boost daily oil output from Alberta's tar-like deposits by about 30 percent by 2008, faces higher costs because of a shortage of personnel and equipment as oil-sands development booms.
EnCana Corp., Canada's biggest natural-gas producer, fell 26 cents to C$55.08. Talisman Energy Inc., which produces oil and gas in the North Sea, retreated 24 cents to C$20.16.
A gauge of energy shares accounting for more than a quarter of the S&P/TSX's value declined 0.3 percent. Last week, the group added 2.7 percent as oil prices rebounded from a 19-month low and takeover speculation boosted shares such as Suncor.
Results a `Disaster'
``Operating costs for oil companies are through the roof,'' Gauthier said. ``Suncor results were a real disaster -- much worse than anyone expected. Without the deal speculation, energy stocks would probably be 10 percent to 15 percent lower.''
Phone companies fell 1.3 percent as a group.
Rogers Communications Inc., Canada's biggest mobile phone and cable television company, declined 93 cents to C$37.15.
Abitibi-Consolidated, North America's largest newsprint maker, jumped 83 cents, or 27 percent, to C$3.94. Abitibi and rival Bowater agreed to merge in a stock transaction to create AbitibiBowater Inc. The new entity will have annual revenue of $7.9 billion, and annual cost savings will be about $250 million, the companies said today in a statement.
Catalyst Paper Corp., another newsprint maker, added 48 cents, or 13 percent, to C$4.14.
Sino-Forest Corp. gained 62 cents, or 6.6 percent, to C$9.99. The owner of timberland in China said earlier this month that it has been approached by various parties interested in acquiring the company or making an investment.
Potash Corp. of Saskatchewan Inc., the biggest fertilizer maker, gained C$9.24, or 5.3 percent, to a record C$183.25.
A measure or raw-materials producers added 0.2 percent. MDS Inc. shares gained 32 cents to C$20.42. The medical-services company will acquire Sunnyvale, California-based Molecular Devices Corp. for $615 million, or $35.50 a share to add instruments, software and chemicals used in drug research, according to a statement distributed by PRNewswire. The bid is 49 percent higher than Molecular Devices' closing price on Jan. 26
``There are some pretty good premiums being paid,'' said Peter Hodson, senior portfolio manager at Sprott Asset Management Inc., which manages $3.52 billion in Toronto. ``The M&A activity will remind people of all the liquidity out there.''
Patheon Inc. rose 22 cents, or 4.2 percent, to C$5.47. The drugmaker put itself up for sale in September.
An index of health-care companies added 0.6 percent.
The following shares had unusual price changes. Stock symbols are in parentheses.
Occulogix Inc. (OC CN) added 31 cents, or 17 percent, to C$2.11. The developer of eye treatments said in a statement that the U.S. Food and Drug Administration cleared it to begin phase III trials for its RHEO (AMD) treatment for age-related macular degeneration.
QLT Inc. (QLT CN) climbed 53 cents, or 5.1 percent, to C$10.86. The company, another Canadian maker of eye treatments, was raised to ``buy'' from ``market perform'' by analyst David Dean at Sprott Securities in Toronto.
Losses in the market were limited after Abitibi-Consolidated Inc. agreed to merge with rival Bowater Inc. to create the continent's third-biggest paper and forest-products company. The Standard & Poor's/TSX Composite Index slipped 33.30, or 0.3 percent, to 12,945.96 in Toronto.
``I don't know where we'd be without the deals and the deal rumors,'' said Stephen Gauthier, a partner in Montreal-based investment firm Gauthier & Cie., which oversees about $17 million. ``Maybe a thousand points lower? Oil prices are falling. We are getting deals, but Abitibi's not enough.''
Crude oil for March delivery fell 2.5 percent to $54.01 a barrel in New York, the lowest since Jan. 22, on speculation U.S. inventories are adequate to meet increased heating demand during the next weeks. Prices are 20 percent lower than a year ago.
Suncor Energy Inc. fell 90 cents to C$86.95.
The world's second-biggest oil-sands miner last week reported that fourth-quarter profit fell by half, as operating and royalty costs increased, while oil and gas prices slid. The company, which plans to boost daily oil output from Alberta's tar-like deposits by about 30 percent by 2008, faces higher costs because of a shortage of personnel and equipment as oil-sands development booms.
EnCana Corp., Canada's biggest natural-gas producer, fell 26 cents to C$55.08. Talisman Energy Inc., which produces oil and gas in the North Sea, retreated 24 cents to C$20.16.
A gauge of energy shares accounting for more than a quarter of the S&P/TSX's value declined 0.3 percent. Last week, the group added 2.7 percent as oil prices rebounded from a 19-month low and takeover speculation boosted shares such as Suncor.
Results a `Disaster'
``Operating costs for oil companies are through the roof,'' Gauthier said. ``Suncor results were a real disaster -- much worse than anyone expected. Without the deal speculation, energy stocks would probably be 10 percent to 15 percent lower.''
Phone companies fell 1.3 percent as a group.
Rogers Communications Inc., Canada's biggest mobile phone and cable television company, declined 93 cents to C$37.15.
Abitibi-Consolidated, North America's largest newsprint maker, jumped 83 cents, or 27 percent, to C$3.94. Abitibi and rival Bowater agreed to merge in a stock transaction to create AbitibiBowater Inc. The new entity will have annual revenue of $7.9 billion, and annual cost savings will be about $250 million, the companies said today in a statement.
Catalyst Paper Corp., another newsprint maker, added 48 cents, or 13 percent, to C$4.14.
Sino-Forest Corp. gained 62 cents, or 6.6 percent, to C$9.99. The owner of timberland in China said earlier this month that it has been approached by various parties interested in acquiring the company or making an investment.
Potash Corp. of Saskatchewan Inc., the biggest fertilizer maker, gained C$9.24, or 5.3 percent, to a record C$183.25.
A measure or raw-materials producers added 0.2 percent. MDS Inc. shares gained 32 cents to C$20.42. The medical-services company will acquire Sunnyvale, California-based Molecular Devices Corp. for $615 million, or $35.50 a share to add instruments, software and chemicals used in drug research, according to a statement distributed by PRNewswire. The bid is 49 percent higher than Molecular Devices' closing price on Jan. 26
``There are some pretty good premiums being paid,'' said Peter Hodson, senior portfolio manager at Sprott Asset Management Inc., which manages $3.52 billion in Toronto. ``The M&A activity will remind people of all the liquidity out there.''
Patheon Inc. rose 22 cents, or 4.2 percent, to C$5.47. The drugmaker put itself up for sale in September.
An index of health-care companies added 0.6 percent.
The following shares had unusual price changes. Stock symbols are in parentheses.
Occulogix Inc. (OC CN) added 31 cents, or 17 percent, to C$2.11. The developer of eye treatments said in a statement that the U.S. Food and Drug Administration cleared it to begin phase III trials for its RHEO (AMD) treatment for age-related macular degeneration.
QLT Inc. (QLT CN) climbed 53 cents, or 5.1 percent, to C$10.86. The company, another Canadian maker of eye treatments, was raised to ``buy'' from ``market perform'' by analyst David Dean at Sprott Securities in Toronto.
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