Nov. 5 (Bloomberg) -- Canadian stocks rose for a third day as banks and raw-materials producers advanced after U.S. jobless claims and worker productivity beat forecasts.

Coal and base-metals producer Teck Resources Ltd. climbed 4.8 percent on the signs demand may improve in the U.S. Royal Bank of Canada, the nation’s biggest lender, added 2.5 percent as banks gained. Sun Life Financial Inc., the country’s third- largest insurer, fell 6.5 percent after reporting a third- quarter loss more than four times the average analyst estimate.

“The unemployment numbers were pretty good -- that seems to be what the market is harping on,” said Glenn MacNeill, chief investment officer at Lawrence Asset Management Inc. in Toronto, which manages about C$225 million ($211 million). “That is a big economic driver for future earnings.”

The Standard & Poor’s/TSX Composite Index gained 109.50 points, or 1 percent, to 11,180.70. The benchmark index is up 2.5 percent this week as a 200-metric-ton gold purchase by India’s central bank boosted gold prices. The S&P/TSX fell in October for the first month since February as U.S. consumer spending, consumer confidence and home sales missed economists’ forecasts.

Employee output per hour in the U.S. jumped at a 9.5 percent annual rate in the third quarter, topping by 3 percentage points the median estimate of economists surveyed by Bloomberg. U.S. jobless claims dropped by 20,000 to 512,000 in the week ended Oct. 31, the lowest level since January.

Anticipation

Tomorrow, the U.S. Labor Department releases the country’s monthly unemployment rate.

“It’s just anticipation; clearly, with the positive number today, the likelihood of a positive number tomorrow is better,” MacNeill said.

Teck Resources, Canada’s second-largest raw-materials producer, rose 4.8 percent to C$33.38 as materials stocks in the S&P/TSX rose for a fourth day. Agrium Inc., the country’s second-largest fertilizer producer, gained 4 percent to C$53.27 after increasing its takeover offer for competitor CF Industries Holdings Inc. to about $4.52 billion.

Canada’s three biggest insurers dropped after missing analysts’ estimates for third-quarter earnings. Sun Life said it lost 25 cents a share, more than the 6 cent loss estimated on average by analysts in a Bloomberg survey.

Manulife Financial Corp., North America’s largest insurance company by market value, reported a loss of 12 cents a share; analysts forecast a profit of 30 cents a share on average.

Great-West Lifeco Inc.’s profit of 47 cents a share missed the average analyst estimate by 2.5 percent.

Shares Decline

Sun Life slid 6.5 percent to C$28.16, while Manulife decreased 3.6 percent to C$19.86. Great-West slipped 1.4 percent to C$23.78.

All eight of Canada’s publicly traded banks gained on the economic data from the U.S. as well as business spending in Canada that surpassed economists’ median estimate. Royal Bank added 2.5 percent to C$55.58. Toronto-Dominion Bank, its largest domestic rival, advanced 2.9 percent to C$64.80.

“There’s been a lot of hype about them because of their U.S. exposure and potential U.S. credit losses,” MacNeill said of the banks. “It’s reflecting that they are in better shape than they might have expected to be.”

Canadian Natural Resources Ltd., the country’s third- largest energy company by market value, declined 1.3 percent to C$67.71 after saying it had “encountered certain unexpected challenges during the ramp-up” of production at its Horizon Oil Sands project. Analyst Paul Sankey of Deutsche Bank AG told clients the company’s third-quarter earnings and volumes were “very disappointing.”

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Quebecor Inc., the cable-television provider and owner of the Toronto Sun, surged 13 percent to C$26.45. Bank of Montreal analyst Tim Casey raised his rating on the shares to “outperform” from “market perform” after the company reported earnings that surpassed analyst estimates.

Natural gas prices increased 1.3 percent as the economic data pointed toward greater demand for the industrial fuel. EnCana Corp., Canada’s largest gas producer, added 1.8 percent to C$61.77. Oil and gas producer Nexen Inc. rallied 2.5 percent to C$25.03.

Montreal-area furniture maker Dorel Industries Inc. soared 10 percent, the most since April 2, to C$32.80 after reporting record third-quarter earnings that exceeded the average analyst estimate by 31 percent, excluding certain items.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

Last Updated: November 5, 2009 16:24 EST