TORONTO (Bloomberg) - Canadian stocks fell the most in two months as metal and crude oil prices dropped on a stronger US dollar and Canadian National Railway Co. failed to boost its profit forecast.

CN, the country's biggest railroad, lost 3.4 percent after at least three analysts reduced their rating on the stock. Barrick Gold Corp., the world's largest gold producer, decreased 1.8 percent as the US dollar rose against all other major currencies. Suncor Energy Inc., Canada's biggest oil and gas producer, declined 2.4 percent after the U.S. reported an increase in crude supplies.

The Standard & Poor's/TSX Composite Index decreased 117.43 points, or 0.9 percent, from a two-year high to 12,567.25.

"The real key today focuses around the US dollar," said Robert McWhirter, who oversees C$140 million ($136 million) as a money manager at Selective Asset Management Inc. in Toronto. "We continue to get a large number of comments from a large number of technicians that say the US dollar has been oversold. Gold, copper and oil are going to pull back as a result."

The S&P/TSX has slipped 0.8 percent since October 13 after surging 9.9 percent in the prior two months. The US dollar has rebounded 1.3 percent against a basket of world currencies over the last two weeks as concerns over potential US Federal Reserve stimulus measures became factored into exchange rates.

The US dollar advanced to a one-week high today after the Wall Street Journal said Fed asset purchases are likely to total "a few hundred billion dollars over several months".

The newspaper did not say where it obtained the information.

Economists at Bank of America Corp. and Goldman Sachs Group Inc. had forecast the central bank will announce $500 billion in securities purchases next week and eventually buy at least $1 trillion.

"People were expecting more of a shock-and-awe kind of thing - $500 billion right out of the gate," Mr. McWhirter said.

Gold stocks declined as the metal lost 1.2 percent in New York. Barrick decreased 1.8 percent to C$46.94. Kinross Gold Corp., Canada's third-largest gold producer, decreased 2.6 percent to C$17.61. Eldorado Gold Corp., Canada's fifth-biggest producer by market value, retreated 3.1 percent to C$17.07.

Crude oil fell 0.7 percent to $81.94 a barrel. US inventories climbed by five million barrels last week, the US Energy Department said yesterday. The figure is five times the median estimate of 15 analysts in a Bloomberg survey.

Suncor dropped for a 10th day, its longest streak of declines ever, slumping 2.4 percent to C$32.55. Cenovus Energy Inc., Canada's fifth-biggest energy company by market value, slipped 1.2 percent to C$29.09. Canadian Oil Sands Trust, the largest owner of the Syncrude project, declined 1.7 percent to C$26.48.

An index of base-metals and coal producers retreated 1.9 percent as copper fell from a 27-month high and Teck Resources Ltd. and Lundin Mining Corp. missed analysts' earnings estimates.

Teck, Canada's largest company in the industry, dropped 1.4 percent to C$45.31 after reporting profit of 79 cents a share, excluding certain items, missing the average analyst estimate of 89 cents a share. Lundin Mining, which produces base metals in Europe, sank 6.8 percent to C$6.31 after falling short of the average third-quarter analyst profit forecast by 36 percent, excluding certain items.

Canadian National lost 3.4 percent, the most in 14 months, to C$66.13 after announcing third-quarter earnings that beat the average analyst estimate by 4.7 percent, excluding certain items. The railroad didn't increase its 2010 profit forecast, leaving it short of the average analyst prediction.

In a note to clients, John Mims, an analyst at BB&T Corp., called CN's forecast "disappointing" and cut his rating on the stock to "hold" from "buy".

The S&P/TSX Financials Index fell as investors speculated the Fed will try to spur the US economy gradually.

Royal Bank of Canada, the country's biggest lender by assets, dropped 1.3 percent to C$54.92. Toronto-Dominion Bank, its largest domestic rival, declined for a fifth day, retreating 0.9 percent to C$73.55. Manulife Financial Corp., North America's third-biggest insurer, lost 1.5 percent to C$12.88.

Sun Life Financial Inc. advanced for a ninth day, the longest streak in six years, increasing two percent to C$28.58. Canada's third-largest insurance company agreed to sell a business backstopping life insurance policies to Berkshire Hathaway Inc.

TMX Group Inc., which operates the Toronto Stock Exchange, rallied 1.9 percent to a one-year high of C$34.18 after raising its quarterly dividend 5.3 percent to 40 cents a share as of the dividend payable Nov. 26.

IESI-BFC Ltd., Canada's largest publicly traded waste- management company, decreased 5.2 percent to C$23.39 after reiterating its 2010 sales forecast of $1.395 billion to $1.415 billion. Analysts had forecast revenue of $1.419 billion, according to the average of 14 estimates in a Bloomberg survey.