- S&P/TSX pares gain in final hour as Valeant extends declines
- Canadian Pacific Railway rises after dropping Norfolk pursuit
Canadian stocks rose a second day, giving back some gains in the final hour of trading, as commodities rallied amid signs of a pick-up in industrial demand in China. Valeant Pharmaceuticals International Inc. extended losses to drag health-care companies lower.
The Standard & Poor’s/TSX Composite Index rose 0.2 percent to 13,422.76 at 4 p.m. in Toronto, paring an earlier advance of as much as 1 percent. The Canadian benchmark has gained 1.2 percent in two days. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 3.2 percent gain.
Canadian equities advanced with commodities prices today, as crude traded above $40 a barrel in New York while spot gold advanced to the highest in three weeks. Copper rebounded as the dollar declined a second day. China’s producer prices increased 0.5 percent in March from February, the first gain in more than two years, data showed Monday.
The resource-dominant S&P/TSX remains tied to commodities prices, as a first-quarter rally fueled by a resurgence in crude and gold prices has stalled to start the second. The Canadian benchmark now trades at 21.3 times earnings, about 15 percent higher than the 18.6 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Canadian Pacific Railway Ltd. climbed 2.6 percent to the highest level since Dec. 4, after the railroad operator ended efforts to buy U.S. competitor Norfolk Southern Corp. and the takeover plan backed by investor Bill Ackman drew opposition from customers and U.S. government officials. Norfolk Southern rejected three offers, including one in December that valued the company at $27 billion.
Whitecap Resources Inc. climbed 8.6 percent to a three-month high, after the oil and natural gas explorer lowered its monthly dividend and doubled its 2016 capital spending guidance to C$148 million.
Valeant tumbled 7.8 percent for a second day of losses, as declines accelerated through the day. The drugmaker’s board has asked outgoing Chief Executive Officer Michael Pearson to cooperate with a subpoena to appear before a U.S. Senate committee that’s investigating drug pricing. The committee said Friday it intended to start contempt proceedings against Pearson, after he failed to appear at a deposition that week.
Shares of Valeant have rebounded from a five-year low after winning the support of lenders to waive a default and ease some restrictions on its loan terms last week. Valeant shares remain down almost 90 percent from an August record.