TORONTO (Bloomberg) - Canadian stocks swung between gains and losses as gold stocks rose on a weaker US dollar while Potash Corp. of Saskatchewan Inc. fell on concern that political hurdles may block BHP Billiton Ltd.'s buyout bid.

Potash Corp., the world's biggest fertiliser producer by market value, dropped 3.8 percent after the Globe and Mail reported the Canadian government "is growing increasingly sceptical" of BHP's offer. Goldcorp Inc., the world's No.2 gold producer by market value, advanced 4.9 percent after doubling its dividend. Aerospace and defense contractor MacDonald, Dettwiler & Associates Ltd. increased 6.7 percent after reporting profit that topped the average analyst estimate.

The Standard & Poor's/TSX Composite Index climbed 10.09 points, or 0.1 percent, to 12,577.34 as of 3.10pm in Toronto. The index has retreated 0.9 percent over the past two days on speculation the US Federal Reserve may buy fewer assets as part of a stimulus policy, known as quantitative easing, than previously thought.

"People were too excited," said Blair Falconer, who manages C$800 million ($782 million) as a money manager at HSBC Securities (Canada) Inc. in Toronto. "Now that we have the facts, it turns out maybe it isn't going to have the effect that we thought, and maybe it's priced in."

The S&P/TSX declined 0.8 percent in the two weeks ending yesterday after surging 9.9 percent in the prior two months. Gold and oil futures dropped 3.5 percent and 1.3 percent, respectively, as the US dollar rebounded.

Potash Corp. lost 3.8 percent to C$146 after the Globe and Mail cited unnamed BHP officials as saying they fear Canada will make extravagant demands for concessions as part of its review of its $40 billion bid for Potash Corp. The government must approve a purchase because BHP is a foreign company.

BHP has "absolute confidence" in the government's review of its offer, Ruban Yogarajah, a spokesman for the Australian company, said today in a telephone interview.

Gold advanced 1.5 percent today as the US dollar retreated against all other major currencies. The currency slumped after the Federal Reserve Bank of New York surveyed the bond dealers and investors about the possible impact of Fed asset purchases of up to $1 trillion.

Goldcorp rose 4.9 percent to C$45.42 after raising its monthly dividend to three cents a share. Agnico-Eagle Mines Ltd., Canada's fifth-largest gold producer, rallied 5.2 percent to a one-year high of C$76.60 after reporting improved production at its Kittila mine in Finland. Kinross Gold Corp., the country's third-biggest producer, gained 3.4 percent to C$18.21.