- Valeant Pharmaceuticals rebounds from lowest level since 2013
- Commodity shares gain after oil recovered from below $40
Canadian stocks rose as Canadian Pacific Railway Ltd. rallied on merger prospects and Valeant Pharmaceuticals International Inc. rebounded from a two-year low.
Canadian Pacific surged 5.6 percent to a three-week high as the railroad operator went public with its pursuit of Norfolk Southern Corp., wooing the U.S. company’s shareholders with an offer of about $28 billion that would create a transcontinental railroad. Raw-materials and energy producers advanced as oil recovered after briefly dipping below $40 a barrel in New York for the first time since August.
The Standard & Poor’s/TSX Composite Index rose 119.58 points, or 0.9 percent, to 13,399.97 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has alternated between gains and losses for three days. It fell yesterday after snapping the longest losing streak in more than a decade Monday. The S&P/TSX has declined 8.4 percent this year, trailed only by Singapore and Greece among developed markets.
Canadian equities have faltered this year amid declines in commodity and health-care stocks of at least 19 percent. The country’s equity market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest-rate increase from the Federal Reserve.
Federal Reserve policy makers inserted language into their October statement to stress the potential for a December rate liftoff and largely agreed that the pace of increases would be gradual, according to minutes of the FOMC’s Oct. 27-28 meeting released Wednesday.
Fed official Dennis Lockhart earlier said while he’s comfortable with higher rates this year, additional hikes will be slow and shallow. Investors are searching for clues to the Fed’s strategy for increasing interest rates, with the probability of a rate hike in December now at 66 percent.
Valeant Pharmaceuticals jumped 3.6 percent, rebounding from the lowest since July 2013. Valeant, briefly the largest stock in Canada by market capitalization this year, has lost 72 percent from an Aug. 5 high amid pressure over how it prices its drugs. Concordia Healthcare Corp., which has dropped 57 percent since Sept. 4, surged 8.9 percent to a five-week high today.
Teck Resources Ltd. added 1 percent after the diversified miner lowered its 2016 spending plan by C$650 million and said it will eliminate a further 1,000 jobs, including senior management positions. The latest cuts raise the total to about 2,000 in the past 18 months. The decision is a “major positive” for shares and should ease concerns about cash flow generation, according to a report from FBR Capital Markets analyst Lucas Pipes.