- S&P/TSX whipsaws after jumping the most in four weeks
- Bombardier tumbles after cutting C Series delivery forecast
Canadian stocks edged higher as commodities producers rallied with resource prices, led by a third straight increase in gold, offsetting weak services industries expansion in the U.S. that sent shares in industrial and consumer shares lower.
The S&P/TSX Composite Index rose 0.1 percent to 14,812.99 at 4 p.m. in Toronto after swinging between gains and losses for most of the session. The benchmark capped a 1.1 percent rally last week for its best advance since July 15. Canadian equity markets were closed Monday for a holiday.
Among shares moving, Enbridge Inc. climbed to the highest in almost two months after agreeing to a $28 billion cross-border deal to form the largest energy pipeline and storage company in North America. OceanaGold Corp. and Yamana Gold Inc. surged more than 5.7 percent to pace gains among gold miners. Bombardier Inc. plunged 5.1 percent after cutting its C Series delivery forecast.
Canadian shares resumed the 2016 rally to start September after hitting a speed bump in August with the narrowest one-month climb since June 2009 after torrid gains in raw-materials producers faltered. The group is still up 55 percent and on track to halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in 2016, on pace for the strongest in seven years.
The S&P/TSX is also the second-best performing developed market in the world, just behind New Zealand. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.5 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
On Tuesday, Enbridge added 3.9 percent for a third day of gains after agreeing to buy Spectra Energy Corp. in a stock-for-stock deal, according to a company statement Tuesday. The deal is expected to close in the first quarter of 2017 and would be the biggest foreign purchase ever by a Canadian company.
Energy producers edged higher, as crude climbed in New York while Brent slipped. A pledge by Russia and Saudi Arabia to cooperate to stabilize the market failed to include any specific measures to bolster prices. Brent crude had jumped Monday as the two countries planned a “significant” announcement. Bonavista Energy Corp. soared 20 percent after agreeing to an asset exchange pact.
Barrick Gold Corp. gained 3.7 percent to lead raw-materials producers higher, as Goldman Sachs analysts led by Andrew Quail named the Canadian company as among its top ideas within gold companies. Gold prices held a three-day advance, climbing the most since June.
Bombardier slumped the most in more than two months after it cut its 2016 forecast for C Series jet aircraft deliveries by more than half because of delays in engine shipments from supplier Pratt & Whitney. The Montreal-based planemaker now expects to deliver seven of the aircraft this year, down from 15, which will result in weaker revenue.
Performance Sports Group Ltd. tumbled 10 percent, the biggest decline since Aug. 17. The maker of hockey and athletic equipment ended a shareholder nomination agreement with largest investor Sagard Capital Partners Friday.