2013.09.2005:26:48UTC+00Canadian stocks decline as gold miners sag down following fed rally

Canadian stocks pullback from a two-year high, as financial stocks and gold producers retreated following the U.S. Federal Reserve's decision yesterday to surprisingly continue the pace of its bond purchasing program.

Barrick Gold Corp. declined 2.7 percent even as precious metals prices rose. Manulife Financial Corp. and Sun Life Financial Inc. relinquished more than 1.2 percent as the threat of depressed yields weighed on the insurers’ investment portfolios. Catamaran Corp. traded 2.9 percent greater after Cantor Fitzgerald LP said the stock’s 9 percent sagged yesterday represents a purchasing chance.

Insurers Slump

Yields on government bonds in the U.S. and Canada tumbled yesterday after the Fed suggested short-term borrowing rates could remain near zero even if U.S. unemployment falls below 6.5 percent. The threat of cuts to the bond purchases had pushed the yield on 10-year U.S. Treasury notes to a two-year high.

Gold Miners

Nineteen of 24 members in the S&P/TSX Gold Index retreated after each advanced at least 1.3 percent yesterday. Barrick Gold, the world’s largest producer, dropped 2.7 percent to C$19.94. Novagold Resources Inc. plunged 7 percent to C$2.67.

Catamaran, a provider of pharmacy benefits management, gained 2.9 percent to C$53.44. Cantor Fitzgerald LP analyst Justin Kew called the worst slide since May “overly punitive.” Walgreen Co., one of the company’s main customers, said late Sept. 17 it would switch employees into a private insurance exchange in 2014.

Health-care companies rallied 3.4 percent as a group for the biggest gain in the S&P/TSX. Valeant Pharmaceuticals International Inc. jumped 3.7 percent to a record C$108.92.

Niko Resources Ltd. climbed 8.7 percent to C$4.12, snapping a three-day slide as energy companies climbed. The Calgary-based oil and gas explorer lost 9.1 percent during the losing streak.

“The material sector moved very strongly yesterday, and I think energy is catching up to that,”Youssef Zohny, portfolio manager at Richardson GMP in Vancouver, said in a phone interview.