- T. Rowe Price accuses drugmaker of deceptive practices
- Energy producers advance as oil closes in a bull market
Canadian stocks closed little changed as Valeant Pharmaceuticals International Inc. retreated, combining with a drop in lenders to offset gains among energy producers as crude entered a bull market.
The S&P/TSX Composite Index fell less than 0.1 percent to 14,695.68 at 4 p.m. in Toronto, extending losses to a third day, the longest in two months. Trading volume was 13 percent lower than the 30-day average.
Valeant lost 3.4 percent, after a 13 percent rally on Wednesday. T. Rowe Price Group Inc. filed a lawsuit against the drugmaker, accusing its executives of using a secret network of pharmacies, deceptive pricing, reimbursement practices and accounting tricks to artificially inflate its revenue and profit. A Valeant spokeswoman said the complaint repeats allegations and claims made in a suit filed last October that seeks class-action status, and the company “intends to defend itself.”
The latest news highlights a roller coaster of events for the struggling drugmaker in recent weeks. The stock jumped the most in more than two decades Aug. 9 after Chief Executive Joseph Papa allayed investor concerns by affirming guidance in its 2016 results and embarking on a plan to sell assets and reduce debt, only to fall the most in a month the same week on a report it was the target of a criminal probe by U.S. prosecutors. Two analysts upgraded their ratings for the stock this week.
Elsewhere, financial services stocks lost 0.4 percent for the biggest contribution to losses in the S&P/TSX as six of 10 industries retreated. Brookfield Asset Management Inc. fell 1.4 percent, stretching its losing streak to a seventh day, the longest in a year. Raw-materials stocks ended a mixed day of trading higher, halting a five-day slide that was the longest since October.
Encana Corp. and Crescent Point Energy Corp. increased at least 1.8 percent as energy producers gained 1 percent as a group. Oil advanced 3.1 percent in New York, extending the longest winning streak in more than a year after gaining 12 percent over the prior five sessions. Brent crude topped $50 a barrel in London for the first time since July 5. WTI oil has risen 22 percent from its early-August low, meeting the common definition of a bull market.
Raw-materials producers have led the rally in Canadian equities in 2016, surging 60 percent as the top gainers among 10 industries in the S&P/TSX. It’s the best year-to-date performance for the category in at least 30 years, according to data compiled by Bloomberg. Energy producers have gained 23 percent in the same period.
That’s boosted the Canadian equity benchmark to a 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.4 for the S&P/TSX, about 14 percent higher than the S&P 500 Index.