Canada Stocks Rise for Third Day as Oil Gains, U.S. Data Improve

Canadian stocks rose for a third day as commodity prices advanced after U.S. reports showed consumer confidence surged and home values jumped.

MTY Food Group Inc. (MTY) gained 10 percent after agreeing to buy fast-food assets from Extreme Brandz for C$45 million ($43.5 million). Bankers Petroleum Ltd. and Suncor Energy Inc. rallied at least 1.6 percent as crude snapped a four-day decline. Thompson Creek Metals (TCM) Co. jumped 2.7 percent after an analyst said HudBay Minerals Inc. could be interested in acquiring the molybdenum producer. Alacer Gold Corp. and Kirkland Lake Gold Inc. (KGI) fell more than 3.6 percent as gold slid.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 54.14 points, or 0.4 percent, to 12,750.51 at 4 p.m. in Toronto, the biggest gain in a week. The benchmark equity gauge has advanced 2.6 percent this year.

“Oil is up, and I think there’s a lot of pent-up demand for oil and gas stocks,” Irwin Michael, fund manager with ABC Funds, said from Toronto. The firm manages about C$800 million. “The U.S. market is doing a little bit of catch-up today. Between the Case-Shiller and consumer confidence numbers, they help. Economically things are improving.”

The S&P 500, the benchmark U.S. equity gauge, rallied 0.6 percent, as the S&P/Case-Shiller index of U.S. home prices rose in March by the most since April 2006 and another report showed confidence among U.S. consumers climbed in May to the highest in more than five years.

Bankers Petroleum added 3.3 percent to C$3.12 and Suncor, Canada’s largest oil producer, rose 1.6 percent to C$32.35 as crude rallied 0.9 percent to settle at $95.01 a barrel in New York, the highest since May 21.

Railroad Stocks

Industrial stocks paced gains in the S&P/TSX, advancing 0.9 percent as a group as six of 10 industries rose. Trading volume was 28 percent higher than the 30-day average.

Canadian Pacific Railway Ltd. (CP) added 1.9 percent to C$139.40 and Canadian National Railway Co. rose 1 percent to C$105.23. Hunter Harrison, chief executive officer with CP Rail, said in a TV interview with BNN yesterday the company will have North America’s best operating ratio, a measure of efficiency, in 18 months.

MTY Food Group, a fast-food restaurants franchiser, jumped 10 percent to C$25.10 after agreeing to buy Extreme Brandz’s Extreme Pita and Mucho Burrito restaurant chains. The purchase includes 40 storefronts in the U.S., a first for MTY. System-wide sales in Extreme Brandz’s most recent fiscal period were more than C$103 million, MTY Food said in a release.

Thompson Creek

Thompson Creek Metals advanced 2.7 percent to C$3.80 after Garrett Nelson, an analyst with BB&T Capital Markets, said there was “chatter” about HudBay Minerals considering an acquisition of the Littleton, Colorado-based molybdenum miner.

David Garofalo, chief executive officer with HudBay, told Bloomberg in an interview the company isn’t interested in acquiring Thompson Creek. HudBay rose 2.3 percent to C$8.53.

Bank of Nova Scotia, Canada’s third-largest lender, ended unchanged at C$59.61 after erasing losses of as much as 1.1 percent. The bank reported second-quarter adjusted earnings of C$1.24 a share, short of the C$1.26 average estimate of 15 analysts surveyed by Bloomberg. It also set aside C$343 million for bad loans during the quarter, 30 percent more than a year ago.

Alacer Gold dropped 4.2 percent to C$2.08 and Kirkland Lake Gold retreated 3.6 percent to C$4.58 as gold for August delivery fell 0.6 percent to settle at $1,379.70 an ounce in New York.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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