Canadian stocks rose a third day, reaching the highest close in almost two weeks, as health-care shares surged and energy producers rallied on higher crude prices to offset losses among metal producers.
Valeant Pharmaceuticals International Inc. (VRX) added 4.8 percent after setting up a physician loyalty program in the U.S. with Mentor Worldwide LLC. Penn West Petroleum Ltd. and Athabasca Oil Corp. jumped more than 5 percent as crude rallied to a 14-month high on concern that protests in Egypt will threaten supplies. Barrick Gold Corp. and Silvercorp Metals Inc. plunged at least 7.1 percent as prices for the metals retreated.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 49.27 points, or 0.4 percent, to 12,178.38 at 4 p.m. in Toronto, the highest since June 19. The gauge has fallen 2.1 percent this year. Trading volume was in line with the 30-day average.
“There’s concern in Egypt, oil is up,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4 billion ($3.8 billion). “We’re waiting for Friday’s non-farm payroll reports. The best thing for the equity market is if the U.S. economy continues to improve, but at a slower pace than the Fed expects, which will push out the end of QE.”
Markets in Toronto were closed yesterday for the Canada Day holiday, while the S&P 500 rose 0.5 percent in the U.S. Investors there continue to weigh data and statements from Federal Reserve officials to determine whether the world’s largest economy is strong enough for the central bank to scale back stimulus measures. The S&P 500 slipped 0.1 percent, ahead of the monthly jobs report on July 5. The U.S. is Canada’s largest trading partner.
Seven of 10 industries in the S&P/TSX advanced, extending the index’s three-day rally to 1.9 percent. Health-care stocks paced gains, adding 3.1 percent. The group has surged 40 percent this year and closed today at its highest since 2000.
Valeant Pharmaceuticals jumped 4.8 percent to C$95, the biggest jump since May 27. The company’s Medicis skin care division is introducing a five-year loyalty program in the U.S. that will include Mentor’s line of breast implant products. The program gives physicians incentives for using Medicis and Mentor products.
Telus Corp. (T) rallied 3.1 percent to C$31.66 after analysts with Canaccord Financial Inc. said investors had overestimated how much Verizon Communications Inc. may shake up Canada’s wireless market. Verizon said last month it was considering entering the Canadian mobile-phone market, and the Globe and Mail reported June 26 the company had submitted a bid for Toronto-based Wind Mobile.
Telus plunged 8 percent on the June 26 report, and Rogers Communications Inc., the largest wireless carrier in Canada, retreated 9.2 percent that day. Rogers added 2.8 percent to C$42.37 today.
Penn West Petroleum climbed 5 percent to C$11.65 and Athabasca Oil rose 6.1 percent to C$6.91, driving the S&P/TSX Energy Index to a 1.4 percent gain, the most in six weeks.
The price of crude rallied 1.6 percent to $99.60 a barrel, the highest settlement since May 2012, on speculation U.S. inventories may have dropped 2.25 million barrels last week to the lowest level since May 31, according to a Bloomberg survey before a report tomorrow. Oil extended gains as the political showdown escalated in Egypt, which controls the Suez Canal, a key transit point for oil tankers.
Raw-materials producers led declines in the S&P/TSX, falling 2.1 percent as a group. Gold slid for the first time in three sessions and silver futures slumped 1.4 percent. Endeavour Silver Corp. tumbled 9.9 percent to C$3.28 after surging 16 percent June 28. Silvercorp Metals plunged 7.1 percent to C$2.74.
Barrick Gold, the world’s largest producer, slumped 7.7 percent to C$15.32, the lowest level since 1992. Jefferies LLC analyst Peter Ward downgraded the stock to hold from buy. The gold miner on June 28 said it may write down as much as $5.5 billion on its Pascua-Lama project in the Andes after the price of the metal plunged close to a three-year low.
Barrick is also likely to take other “significant” impairment charges for the second quarter as it reviews goodwill and other assets, the Toronto-based company said.
BlackBerry slumped 7.3 percent to C$10.22, its lowest close since November. The BlackBerry 10 smartphone maker has plunged 35 percent in the past three days, after reporting a surprise loss in its first quarter due to lackluster sales of the Z10 touchscreen phone.
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