Oct. 29 (Bloomberg) -- Canadian stocks rose the most in four months after U.S. gross domestic product increased more than economists forecast and Barrick Gold Corp. reported earnings that topped analysts’ estimates.

Barrick, the world’s largest gold producer, gained 7.1 percent. Suncor Energy Inc., Canada’s largest energy company, added 3.2 percent as crude oil surged on the economic report. Agnico-Eagle Mines Ltd., the country’s fourth-largest bullion- mining company by market value, fell 7.4 percent after reporting less profit than analysts estimated.

The Standard & Poor’s/TSX Composite Index increased 269.89 points, or 2.5 percent, to 11,075.22, the first gain in five days.

“The underlying economy seems to be strong enough to support a more-robust stock market,” said Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd., Toronto, which oversees about C$740 million ($693 million). “This economic number for today is going to be enough to jolt the market into continued strength.”

The S&P/TSX had soared 30 percent from March 20 through Oct. 27, as the median forecast for the third-quarter U.S. gross domestic product growth rate climbed to 3.2 percent from zero among economists in a Bloomberg survey. Yesterday, the Canadian benchmark index tumbled 2.3 percent as Goldman Sachs cut its third-quarter GDP estimate to 2.7 percent from 3 percent.

Expansion

The U.S. Commerce Department reported today that the economy of Canada’s dominant trading partner expanded at a 3.5 percent pace in the third quarter, exceeding the 3.2 percent median forecast of economists surveyed by Bloomberg. Seventy- eight percent of Canada’s exports went to the U.S. last year, according to Industry Canada.

The S&P/TSX advanced more than the Standard & Poor’s 500 Index, the benchmark for U.S. equity, which climbed 2.3 percent following the GDP report.

“The reason this matters more to Canada is that our indexes are more largely comprised of highly economically sensitive commodity stocks,” Caldwell said. “If you have a stronger economy, you’re going to have a stronger demand for energy, oil, gasoline. That’s going to drive the profits of these companies.”

Barrick said it earned 54 cents a share in the third quarter, excluding certain items, surpassing the average estimate of analysts surveyed by Bloomberg by 16 percent. The per-share profit, boosted by efforts to contain costs, was Barrick’s biggest since the first quarter of 2008. The stock climbed 7.1 percent to C$39.66.

Precious Metals

Precious-metal prices jumped as the U.S. GDP numbers encouraged investors to leave the U.S. dollar for higher- yielding assets. Goldcorp Inc., Canada’s second-largest gold- mining company, gained for the first time in nine days, advancing 3.9 percent to C$40.26. Silvercorp Metals Inc., which sank 8.6 percent yesterday, soared 15 percent to C$5.65.

Crude-oil futures also rose in New York on prospects of increased demand as the U.S. economy expands. Suncor, which bought Petro-Canada in August, gained 3.2 percent to C$36.97. Canadian Natural Resources Ltd. added 2.8 percent to C$72.46. EnCana Corp., which is planning to spin off its oil operations, advanced 3.5 percent to C$61.83.

Agnico-Eagle slumped 7.4 percent to C$61.19 after saying it earned 3 cents a share in the third quarter, excluding certain items, missing the average analyst estimate by 86 percent. The Toronto-based company also reduced its forecast for gold production for 2009 and 2010. Analysts at Credit Suisse Group AG, National Bank of Canada and Blackmont Capital Inc. cut their ratings on the stock to their equivalent of “hold.”

Upgrade

Sun Life Financial Inc., Canada’s third-largest insurer, rallied 4.8 percent, the most since July 27, to C$30.21 after analyst John Reucassel of Bank of Montreal increased his rating on the company to “market perform” from “underperform.” The analyst cited the stock’s 13 percent decline from Aug. 6, when it reported second-quarter earnings, through yesterday. Manulife Financial Corp., the biggest insurance company in the country, increased 3.9 percent to C$20.75.

Base-metals producer HudBay Minerals Inc. surged 14 percent, erasing an 8.3 percent loss from yesterday, to C$14.60 as signs of economic recovery boosted prices of metals used in manufacturing. Teck Resources Ltd., the largest Canada-based base-metals company, rose 5.8 percent to C$32.51 after saying sales from its coal business should increase this year over last year.

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

Last Updated: October 29, 2009 16:44 EDT