Canadian stocks may fall for a second day, led by energy producers such as Petro-Canada, on speculation that gasoline supplies are outstripping demand as the summer driving season approaches.

Financial shares including Royal Bank of Canada, which have been declining as bond yields increased, may gain today, after the 10-year government bond rose, pushing the note's yield down from a near three-year high.

The Standard & Poor's/TSX Composite Index fell 108.49, or 0.8 percent, to 13724.33, yesterday in Toronto. The benchmark has slipped 3 percent from a June 4 record, as investors speculated rising bond yields and higher interest rates will reduce the appeal of equities.

``The market wants to go lower right now,'' said Doug Davis, who manages about C$475 million including Bank of Montreal as president of Davis-Rea Ltd. Investment in Toronto. ``People are starting to realize that it will reflect higher bond yields and interest rates. Cash looks pretty good for the moment.''

Crude oil for July delivery fell 19 cents, or 0.3 percent, at $65.16 a barrel in 8:51 a.m. electronic trading in New York, on speculation U.S. gasoline stockpiles rose for a sixth straight week as refiners increased output.

An Energy Department report today will probably show refiners added 1.5 million barrels of fuel to the nation's gasoline supply last week, according to a Bloomberg News survey of 16 analysts. The report is due to be released at 10:30 a.m. in Washington.

Petro-Canada, the country's third-biggest oil and gas producer, and the owner of one of the biggest chains of gas stations in the nation, may drop 36 cents to C$53.15, based on bids already submitted on the Toronto Stock Exchange.

Suncor Energy Inc., the world's second-biggest oil-sands producer, may fall 30 cents to C$91.50, bids indicated.

Energy shares make up more than a quarter of the S&P/TSX.

The yield on Canada's benchmark 10-year bond due June 2016 fell 2 basis points, or 0.02 percentage point, to 4.71 percent at 8:56 a.m. in Toronto. The note's price, which moves inversely to yield, gained 11 cents to C$94.86.

Bonds gained as a report showed factory shipments unexpectedly fell in April, easing concern that the Bank of Canada may be about to raise borrowing costs to temper economic growth and inflation.

Yesterday, the yield reached the highest since September 2004, raising the appeal of bonds relative to equities, and reducing the attraction of dividends. Financial share pay among the highest dividends in the S&P/TSX.

Royal Bank, Canada's biggest lender by assets, may gain 57 cents to C$56.92, bids indicated. Canadian Imperial Bank of Commerce, the country's fifth-largest bank, may add 23 cnets to C$97.99.

Raw-materials stocks may be active.

Gold fell to the lowest in almost three months in London as gains in the dollar cut demand for the precious metal as an alternative investment. Silver also declined.

Nickel traded close to a three month-low low in London on speculation swelling stockpiles are a signal demand from stainless- steel producers is slowing. Copper and zinc also dropped.

U.S. Stock-Index Futures

U.S. stock-index futures gained after the yield on the 10-year Treasury bond retreated from a five-year high. S&P 500 futures expiring in September added 7.20 to 1515.20 at 9:02 a.m. in New York. Dow Jones Industrial Average futures increased 59 to 13,480. Nasdaq-100 Index futures advanced 8.5 to 1926.50.

The following shares may have unusual price changes. Prices are from yesterday's close.

Alcan Inc. (AL CN): The world's third-largest aluminum producer signed an agreement with Airbus SAS to provide the metal for planes including the superjumbo A380. The value and duration of the deal weren't disclosed.

Separately, Alcan was cut to ``peer perform'' from ``outperform'' at Bear, Stearns & Co. The shares gained 33 cents, or 0.4 percent, to C$87.73.

Canadian National Railway Co. (CNR CN): The country's largest railroad was downgraded to ``peerperform'' from ``outperform'' at Bear, Stearns & Co. The shares fell 43 cents, or 0.8 percent, top C$55.82.

Canexus Income Fund (CUS-U CN): The trust, which was created to acquire an interest in energy and chemicals company Nexen Inc., was downgraded to ``sector perform'' from ``sector outperform'' by analyst Benoit Laprade at Scotia Capital. The shares rose 2 cents to C$7.30.

EnCana Corp. (ECA CN): Canada's biggest natural-gas producer was rated ``outperform'' in new coverage at CIBC World Markets. The shares dropped 33 cents, or 0.5 percent, to C$66.24.

International Forest Products Ltd. (IFP/A CN): The Vancouver, British Columbia-based lumber producer was cut to ``sector underperform'' from ``sector perform'' by analyst Benoit Laprade at Scotia Capital. The shares fell 19 cents to C$8.71.

Q9 Networks Inc. (Q CN): The provider of Internet infrastructure and related services said in a statement sent by Canada NewsWire that it had a second-quarter net loss of 2 cents a share. Analysts expected net income of 1 cent, the average of five estimates in a survey by Bloomberg News. The shares rose 3 cents to C$9.39.

Trinidad Energy Service Income Trust (TDG-U CN): The provider of drilling services to Canadian oil and gas companies agreed to acquire the U.S.-operated assets of Axxis Drilling for $139 million. Trinidad will buy four land-based drilling rigs and one barge drilling rig along with inventory, crewboats and spare parts, Trinidad said in a statement on Canada NewsWire. The shares rose 22 cents, or 1.4 percent, to C$15.53.