Canadian Stocks Rise as Home Prices, U.S. Employment Increase
Canadian stocks rose for a second day as gains in Canadian home prices and U.S. employment spurred bank shares and gold and natural gas producers advanced.
Toronto-Dominion Bank (TD), Canada’s second-largest lender by assets, advanced 1.8 percent after a report by Teranet Inc. and National Bank of Canada (NA) showed a 0.4 percent increase in home prices in January. Valeant Pharmaceuticals International Inc. (VRX), Canada’s largest drugmaker, surged 12 percent after making an unsolicited takeover bid for Cephalon Inc. Base metals producer Lundin Mining Corp. (LUN) rose 4.9 percent after breaking off a deal to be bought by Inmet Mining Corp. (IMN)
The Standard & Poor’s/TSX Composite Index climbed 153.23 points, or 1.1 percent, to 14,083.58.
“It’s a reduction in concerns about the slowdown in the world economy,” said Robert McWhirter, who oversees C$140 million ($144 million) as a money manager at Selective Asset Management Inc. in Toronto. “Now it appears people are becoming more comfortable moving toward the risk-on strategy.”
The index fell 1.5 percent this month through yesterday, jeopardizing an eight-month streak of gains. Energy companies retreated from a peak they’d reached at the outbreak of the Libyan conflict and insurers and uranium producers dropped after the Japanese earthquake and tsunami.
The S&P/TSX Financials Index climbed to the highest level since May 2008. ADP Employer Services said U.S. companies hired 201,000 workers in March.
TD, which has more than 1,000 U.S. branches, advanced 1.8 percent to a record C$86.40. National Bank, the country’s sixth- largest lender by assets, rose 2 percent to a record C$78.81 after Chief Executive Officer Louis Vachon told an annual meeting that the company is considering a stock split. Manulife Financial Corp. (MFC), North America’s fourth-biggest insurer, gained 1.7 percent to C$17.19.
Valeant offered about $5.7 billion in cash for Cephalon, a Frazer, Pennsylvania-based maker of sleep and pain drugs, saying Cephalon had rebuffed its attempts to negotiate a friendly takeover.
The purchase of Cephalon could increase Valeant’s share price by $20, Louise Chen, an analyst at Collins Stewart LLC, said in a note to clients.
Valeant soared 12 percent to a seven-year high of C$48.58. The shares have jumped 72 percent this year, the most among S&P/TSX stocks.
Gold futures advanced for the first time in five days on demand for alternative investments after Muammar Qaddafi’s forces retook the oil port of Ras Lanuf from rebels.
Barrick Gold Corp. (ABX), the world’s biggest gold producer, increased 1.4 percent to C$50.08. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, climbed 1.6 percent to C$48.09. China Gold International Resources Corp., which mines in China, rallied 3.6 percent to C$5.47 before the release of its fourth-quarter financial results.
Energy companies rose on the Libyan fighting and a forecast of below-normal temperatures in the U.S. that led to a gain in natural gas futures.
TransCanada Corp. (TRP), the owner of the country’s largest pipeline system, advanced 1 percent to C$39.18. Cenovus Energy Inc. (CVE), the country’s No. 5 energy company by revenue, increased 1.9 percent to C$38.21.
Bankers Petroleum Ltd. (BNK), which produces oil and gas in Albania, climbed for the first time in seven days, rising 3.7 percent to C$8.12. Jamie Somerville, an analyst at TD, boosted his rating on the shares to “action list buy” from “buy.”
Lundin rallied 4.9 percent to the highest price since 2008, C$7.96, after terminating the agreement with Inmet so it could try to fight off a rival bid from Equinox Mineral Ltd. Lundin adopted a so-called poison pill that would make it more difficult for Equinox to succeed in its hostile offer.
Equinox, which mines copper in Africa, rose for a sixth day, advancing 2.7 percent to C$5.63. Inmet, which produces base and precious metals, surged 6.7 percent to C$66.62.
Westport Innovations Inc. (WPT), which makes natural-gas engines, jumped 12 percent, the most in nine months, to C$21.10. U.S. President Barack Obama promoted natural-gas-fueled vehicles in a speech at Georgetown University in Washington today.
Neo Material Technologies Inc. (NEM), which makes rare-earth and zirconium products, rallied 7.5 percent to a record C$9.30 after increasing 4.6 percent yesterday. The Metal-Pages website said yesterday that rare-earth processors in China have had to stop production due to a supply shortage.
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