Canadian Stocks Climb as Oil Rallies on Improving Economic Data

Canadian stocks rose a second day, erasing a weekly loss, as energy producers rallied following economic data that signaled growth in the U.S. is accelerating.

Suncor Energy Inc. and Athabasca Oil Corp. climbed at least 2.6 percent as oil rose for a third day. Just Energy Group Inc. added 6.9 percent after RBC Dominion Securities Inc. said a dividend cut is not imminent. Gold stocks accounted for all 10 worst performers in the Standard & Poor’s/TSX Composite Index. Copper Mountain Mining Corp. sank 9.5 percent after Dundee Securities Corp. cut the stock’s rating.

The S&P/TSX rose 105.45 points, or 0.8 percent, to 12,613.05 at 4 p.m. in Toronto, for a weekly gain of 0.2 percent. The benchmark equity gauge is up 1.4 percent this year, the worst performance among the 24 biggest developed markets tracked by Bloomberg.

“Rising tides are lifting all markets, good and bad,” Barry Schwartz, fund manager with Baskin Financial Services Inc. in Toronto, said in a phone interview. He helps manage about C$500 million ($487 million). “We still have some deep issues with the index because of the exposure to gold, which continues to be pummeled and hated by every investor. But the rising tide in the U.S. is a force that the Canadian market can’t fight against.”

The index of U.S. leading indicators climbed in April, a rebound from March that suggests the world’s largest economy may be poised for further expansion. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.6 percent in April after falling a revised 0.2 percent in March that was steeper than previously reported, the New York-based group said. The U.S. is Canada’s biggest trading partner.

Industry Groups

Nine out of 10 industry groups in the S&P/TSX advanced today, with raw-materials producers falling. Health-care and energy companies gained the most, climbing at least 1.7 percent.

Suncor Energy, Canada’s largest energy company by market value, advanced 2.6 percent to C$32.92. Athabasca rose 5.7 percent to C$6.53.

Just Energy jumped 6.9 percent to C$7.55, extending a 13 percent rally from yesterday, when the electricity and natural gas utility reported quarterly profit that beat analysts’ estimates. The company can sustain a high dividend payout ratio as cost cuts helped overcome limited customer growth, Nelson Ng, an analyst with RBC, wrote in a note to clients today.

Raw-materials producers dropped 1.6 percent as a group in the S&P/TSX. The industry has slumped 26 percent this year amid concerns China is settling into a slower growth path, mining companies face escalating costs and gold’s status as a safe haven is diminishing as the U.S. economy gains momentum.

Semafo Inc., which explores gold in West Africa, tumbled 12 percent to C$1.55 and Detour Gold Corp. retreated 9.9 percent to C$8.71.

Copper Mountain plunged 9.5 percent to C$1.52. The company said in a statement yesterday that operations at a mill in British Columbia will be suspended until tomorrow because of a motor transformer failure. Joseph Gallucci, an analyst with Dundee, cut the stock’s rating to sell from buy.

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