Canadian stocks rose for a second day, led by energy producers, as oil futures gained after the U.S. reported the biggest increase in payrolls since March 2007.
Suncor Energy Inc., Canada's largest oil and gas company, increased 2.6 percent as crude futures advanced to a 17-month high. Teck Resources Ltd., Canada's largest base-metals producer, climbed 1.8 percent as copper and zinc prices rallied. Toronto-Dominion Bank, the country's second-largest bank, fell 1.6 percent as investors moved their money into investments likely to benefit more from an economic recovery.
The Standard & Poor's/TSX Composite Index rose 35.29 points, or 0.3 percent, to 12,186.35. The market was closed April 2 for Good Friday.
"The clear indication that the U.S. economy is on the mend" is underpinning the S&P/TSX's rally, said Paul Gardner, who helps oversee C$140 million ($140 million) as a money manager at Avenue Investment Management in Toronto. "A lot of the indicators are showing an improvement. The follow-through is higher equity markets and lower bond markets."
The benchmark index advanced 1.6 percent to an 18-month high last week as indexes of manufacturing in the U.S. and China and Japanese business confidence increased. The S&P/TSX has jumped 10 percent in market capitalization this year, the most among the world's top 16 markets by market value.
The Institute for Supply Management's index of U.S. non- manufacturing industries, which make up almost 90 percent of the U.S. economy, increased at the fastest pace since 2006 in March, the Tempe, Arizona, organization said today.
The U.S. accounted for 75 percent of Canada's exports last year, according to Statistics Canada.
Oil futures rallied 2.1 percent to $86.61 a barrel, the highest price since October 2008.
Suncor advanced for a fifth day, gaining 2.6 percent to C$35.22. Canadian Natural Resources Ltd., Canada's second- largest energy company by market value, increased 2.1 percent to an 18-month high of C$79.89.
Companies connected to Alberta's oil sands had the sharpest increases. Opti Canada Inc., which is developing the Long Lake oil-sands project with Nexen Inc., surged 12 percent to C$2.41. UTS Energy Corp. led the S&P/TSX with an 8.1 percent climb to C$2.80. Connacher Oil & Gas Ltd. rose 10 percent to C$1.71.
Raw-materials companies advanced as the U.S. dollar retreated against a basket of major currencies. It dropped 0.9 percent to C$1.0022 against the Canadian dollar.
Teck rose for a sixth day, increasing 1.8 percent to C$46.20. Harry Winston Diamond Corp. rallied 10 percent to C$11.09 after Royal Bank of Canada analyst Irene Nattel raised her rating on the stock to "outperform" from "sector perform."
Comaplex Minerals Corp., a diversified mining company with operations in Canada and Mexico, soared 24 percent to C$9.90, the highest price since at least 1983. The company agreed to sell its Meliadine gold project in northern Canada to Agnico- Eagle Mines Ltd. in a deal Canadian Imperial Bank of Commerce analyst Barry Cooper valued at about $670 million.
Banks dropped 1.1 percent as a group as investors favored more-cyclical industries, said Arthur Salzer, a money manager at MacNicol & Associates Asset Management Inc. in Toronto who oversees about C$160 million.
"If we look back to the last quarter, the banking sector outperformed most of the market," Salzer said. Now "if you want relative outperformance, you're going to go to the energy patch that's been underperforming."
TD slumped 1.6 percent, the most since Jan. 21, to C$73.91. Royal Bank, the country's largest bank, decreased 1 percent to C$59.24. CIBC, the number-five bank by assets, slipped 1.6 percent to C$73.45.
Potash Corp. of Saskatchewan Inc., the world's largest fertilizer producer, fell 2.1 percent to C$116.10 after dropping 4.4 percent last week. Investors are speculating the company's share price, which reached C$128.75 on March 16, was unwarranted considering earnings estimates for this year and next, Avenue Investment's Gardner said.
BlackBerry maker Research In Motion Ltd. declined for a fourth day, losing 1.7 percent to C$67.86. RIM shares sank 10 percent last week as the company reported device prices are falling.
To contact the reporter on this story: Matt Walcoff in New York at email@example.com