Sept. 15 (Bloomberg) -- Canadian stocks rose for a fourth day, led by commodity producers and banks, after U.S. retail sales increased faster than expected, another signal of an economic rebound from Canada’s biggest trading partner.

Suncor Energy Inc. advanced 3.5 percent as oil prices gained. Bank of Nova Scotia increased 3.9 percent. Potash Corp. of Saskatchewan climbed 4.7 percent.

The Standard & Poor’s/TSX Composite Index rose 163.79 points, or 1.5 percent, to 11,495.83. Sales at U.S. retailers surged in August by the most in three years, led by a jump in auto purchases as consumers took advantage of the country’s “cash-for-clunkers” program, the U.S. Commerce Department said today in Washington.

“Investors may be shifting in feeling -- maybe this has bottomed out,” said Irwin Michael, who helps oversee about C$800 million as a money manager at ABC Group of Funds in Toronto. “There’s a little bit more optimism. We’re not reading front-page headlines in the newspapers saying the world is falling off a cliff.”

The S&P/TSX has outpaced the S&P 500 this year, gaining 28 percent to the U.S. benchmark’s 17 percent, as commodities rebounded on demand from emerging markets, especially China. Energy and raw-materials companies make up 44 percent of Canadian stocks by market value.

The 2.7 percent increase in retail sales exceeded the median forecast of economists surveyed by Bloomberg News and followed a 0.2 percent drop in July. Purchases excluding automobiles climbed 1.1 percent, also more than anticipated.

‘Pent-up Demand’

“You have a lot of pent-up demand for goods and services,” Michael said. “Eventually the chickens come home to roost and you have to replace certain things, like buying new brakes for your car, but eventually you have to do it.”

Exports to the U.S. accounted for 78 percent of Canada’s total exports last year and were equal to 32 percent of Canada’s gross domestic product.

The retail-sales numbers from the U.S. boosted the price of crude oil, which rose for the first time in three days. Crude oil for October delivery climbed $2.07 to $70.75 a barrel in New York.

Suncor, Canada’s largest energy company, advanced 3.5 percent to C$38.65, its highest price since June. A Suncor executive told a conference the company plans to sell some natural-gas assets by the end of 2010 to tighten its focus on crude projects after its acquisition earlier this year of Petro- Canada.

Talisman, Crew

Talisman Energy Inc., the explorer with reserves in North America, the North Sea and Southeast Asia, gained for an eighth day, adding 0.9 percent to C$19.60. Crew Energy Inc., which produces oil and gas in Western Canada, surged 7.1 percent to an 11-month high of C$8.56.

Gold rose as investors bought the metal as a hedge against inflation. Bullion gained 0.5 percent to $1,006.30 an ounce in New York.

Goldcorp Inc., Canada’s second-largest gold producer, added 2.7 percent to C$45.44. Iamgold Corp., which mines the metal in West Africa, South America and Quebec, jumped 5.2 percent to an all-time high of C$16.20.

For a second day, Bank of Nova Scotia contributed the most among financials to the S&P/TSX’s rise. Canada’s third-largest bank, which has jumped 13 percent since Sept. 2, added 3.9 percent to C$48.50.

Expansion Ambition

Scotiabank’s chief risk officer, Brian Porter, told investors last week his bank would like to expand into Brazil and Colombia.

“Unlike the other Canadian banks, which are domestic or domestic and U.S., Scotiabank is the one Canadian bank that has a different international strategy,” said Gavin Graham, who helps manage about C$45 billion, including Scotiabank shares, as director of investments at Bank of Montreal Asset Management. “By stating publicly they want to continue to expand, that might have made it look more interesting.”

Canadian Imperial Bank of Commerce, the country’s fifth- largest bank, added 2.5 percent to C$65.45.

Potash Corp. of Saskatchewan, which got 56 percent of its revenue from the U.S. last year, gained 4.7 percent to C$100.79.

BlackBerry-maker Research In Motion rose 1 percent to C$89.20. The company received 63 percent of its revenue from the U.S. last year.

Canada’s largest insurer, Manulife Financial Corp., declined for the first time in four days, falling 2.4 percent to C$21.34.

BCE Inc., Canada’s largest telecommunications company, fell for a third day, losing 0.8 percent to C$26.57. Analyst Phillip Huang of UBS AG lowered his rating on the stock to “neutral” from “buy.” Residential telephone customers may increasingly abandon landlines in favor of wireless phones, Huang wrote.

SXC Health Solutions Corp. slumped 4.7 percent to C$44.85 after announcing an offering of at least 3.5 million shares. The pharmacy-benefits manager, whose stock has soared 97 percent this year, had 24.7 million shares outstanding as of Aug. 31.

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

Last Updated: September 15, 2009 16:29 EDT