Canada Stocks Rise as Data Shows Strengthening U.S. Labor Market

Canadian stocks rose a second day, following the biggest rally in three weeks, as a private report showed U.S. companies hired more workers than forecast.

Valeant (VRX) Pharmaceuticals International Inc. advanced 2.6 percent after Morgan Stanley boosted the stock’s rating. Potash Corp. of Saskatchewan Inc. and Agrium Inc. climbed at least 2.2 percent, pacing gains among fertilizer stocks, as Monsanto Co.’s profit beat analysts’ estimates. Canadian National Railway Co. slipped 1.6 percent as a train carrying crude oil and propane derailed in the eastern province of New Brunswick.

The Standard & Poor’s/TSX Composite Index (SPTSX) added 17.70 points, or 0.1 percent, to 13,614.63 at 4 p.m. in Toronto. The gauge rallied 0.8 percent yesterday. Trading was 18 percent above the 30-day average.

“Because we didn’t have a consumer debt crash or real-estate crash here, there is no dramatic recovery here either,” Bill Harris, partner and portfolio manager with Avenue Investment Management in Toronto, said in a phone interview. His firm manages about C$250 million ($231 million). The question is, “The U.S. is recovering, but is Canada participating in it?” he said.

Companies in the U.S. boosted payrolls by 238,000 in December, compared with a 200,000 advance predicted in a Bloomberg survey, ADP Research Institute data showed. Federal Reserve officials saw diminishing economic benefits from the central bank’s bond-buying program and expressed concern about risks to financial stability when they took the first step to cut the pace of purchases, according to minutes of their last meeting released today.

Labor Reports

Statistics Canada and the U.S. Labor Department will provide unemployment rates and new hiring figures for last month on Jan. 10.

Canadian stocks rose yesterday for the first time in four days, as the price of crude halted the longest slide since September. Oil retreated to the lowest level in six weeks today in New York.

Six out of 10 industries in the S&P/TSX advanced today as health-care companies rallied 2.4 percent to lead the gains. Industrial stocks fell 0.8, the most of any group.

Valeant climbed 2.6 percent to an all-time high of C$138.54. The drug distributor was raised to overweight, an equivalent of buy, from equal-weight by Morgan Stanley.

Potash Corp., the world’s largest fertilizer company by market value, jumped 2.9 percent to C$36.19. Agrium gained 2.2 percent to C$97.90. Monsanto, the world’s largest seed company, reported fiscal first-quarter earnings that topped analysts’ estimates on rising sales of engineered soybean seeds and Roundup herbicide.

Questerre Energy Corp. climbed 6 percent to C$1.41. The independent energy company said Kim Anderson will become chief financial officer, replacing Brent Heagy, who plans to leave the company to join Inter Pipeline Ltd.

Train Accident

Canadian National Railway (CNR) slipped 1.6 percent to C$58.63. The 122-car train jumped the tracks about 7 p.m. local time yesterday near the town of Plaster Rock, sparking a blaze that was still burning more than 12 hours after the accident. A helicopter is being brought in today to help identify the source of fire, said Jim Feeny, a railroad spokesman.

The accident and a Dec. 30 crude-train derailment in North Dakota added to the attention on the risks of moving oil by rail.

Colabor Group Inc. dropped 5.6 percent to C$5.19. The wholesaler was cut to sector perform from outperform by Leon Aghazarian, an analyst with National Bank Financial.

To contact the reporters on this story: Lu Wang in New York at lwang8@bloomberg.net; Callie Bost in New York at cbost2@bloomberg.net

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

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