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Canada Stocks Rise in Longest Rally Since 1995

Feb. 18 (Bloomberg) -- Canadian stocks rose a 10th day, the longest streak in almost two decades, as BlackBerry Ltd. snapped four days of losses after an analyst upgrade.

BlackBerry, the smartphone maker, increased 3.2 percent after analysts with FBR & Co. raised the stock’s rating to market perform as the company shifts into different businesses. Nevsun Resources Ltd. jumped 5.7 percent after raising its estimate of copper resources at a mine in Eritrea. Just Energy Group Inc., which sells natural gas to residences, added 6.5 percent as the commodity’s price surged to a three-week high in New York amid winter storms across the U.S.

The Standard & Poor’s/TSX Composite Index rose 22.71 points, or 0.2 percent, to 14,077.47 at 4 p.m. in Toronto. The benchmark equity gauge has jumped 4.4 percent in 10 days for the longest rally since March 1995 and is trading at its highest level since 2011. Canadian markets were closed yesterday for the Family Day holiday in Toronto.

“If the market goes up too quickly we may see a correction, but if the market continues to grind up we won’t have one,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.7 billion ($4.3 billion). “As we get closer to bank earnings season, people are feeling good about the economy and bidding them higher.”

Bank Earnings

Six of 10 industries in the S&P/TSX advanced on trading volume 17 percent higher than the 30-day average.

A gauge of health-care stocks rose the most after Valeant Pharmaceuticals International Inc. jumped 4.6 percent to a record C$160.38. Leerink Partners LLC said it was unlikely Valeant would bid for Forest Laboratories Inc. after Actavis Plc, the world’s second-largest generic-drug maker by market value, agreed to buy Forest for about $25 billion.

BlackBerry added 3.2 percent to C$10.37, the first gain in five days. Analyst Scott Thompson at FBR raised his 12-month price target to $10 from $6.75. The company’s management, now led by John Chen, is shifting away from the competitive smartphone business and into other areas including mobile device management and BlackBerry Messenger.

Winter Storms

Just Energy Group added 6.5 percent to C$8.84, the highest in a year, and Atlantic Power Corp., which owns power generation projects, surged 7.4 percent to C$3.05 to pace gains among utilities stocks. The industry added 0.6 percent as a group today, as storms and frigid weather across Canada and the U.S. have boosted heating demand and kept families indoors.

Natural gas futures jumped 6.5 percent and are up 31 percent this year, as the inclement weather has cut stockpiles to the lowest in 10 years.

Nevsun Resources surged 5.7 percent to C$4.64 after increasing its total indicated resource estimate for the combined operations at its Bisha mine in Eritrea by 29 percent. This includes an additional 247 million pounds of copper and 47 million pounds of zinc.

Air Canada, the nation’s largest airline, dropped 2.4 percent to C$5.60 for a fourth day of declines since reporting worse-than-projected earnings on Feb. 12. The stock, the best performer in 2013, has slumped 28 percent during that time.

“We are currently at a crossroads” with short-term data suggesting a pullback in the near future for both the S&P/TSX and S&P 500, said Javed Mirza, a technical analyst at RBC Capital Markets, in a report to clients yesterday. The U.S. equities benchmark fluctuated today near an all-time high.

If the Canadian gauge falls below the early February lows of 13,450, then it is likely a longer correction is developing, Mirza said. A “sideways move” in price in the next one to three weeks would instead suggest a rally over the next one to two quarters, the analyst wrote.

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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