Canada Stocks Rise After Three-Day Slump as Valeant JumpsEric Lam and Gerrit De Vynck
Canadian stocks rose, after plunging the most since February yesterday, as a jump in Valeant Pharmaceuticals International Inc. offset losses among consumer-staples companies.
Valeant gained 4.3 percent on a report that Paulson & Co. supported the drugmaker’s attempt to buy Allergan Inc. Metro Inc. and Jean Coutu Group Inc. fell at least 1 percent, pacing losses among consumer-staples companies. Ithaca Energy Inc. and Veresen Inc. rose more than 2.3 percent as energy stocks advanced.
The Standard & Poor’s/TSX Composite Index rose 12.28 points, or 0.1 percent, to 14,974.65 at 4 p.m. in Toronto, climbing for the first time in four days. The price-to-earnings ratio for the benchmark Canadian equity gauge is 20.2, the highest since 2011. The measure has advanced 2.5 percent in June, closing at a record on June 19, and is up 4.5 percent for the quarter.
Five of 10 industries advanced in the S&P/TSX on trading volume 4.8 percent lower than the 30-day average. Consumer-staples companies had the biggest drop, falling 0.4 percent.
The S&P/TSX Gold Index advanced 0.6 percent, after a 2.9 percent loss yesterday, the worst since May 27. Gold for August delivery added 0.1 percent to $1,322.60 an ounce in New York, after an earlier loss of as much as 1.2 percent. The gold price reached $1,326.60 yesterday, a two-month high.
The U.S. economy fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previous reported 1 percent drop, the Commerce Department said today in Washington. The U.S. is Canada’s largest trading partner.
Linamar Corp. lost 1 percent to C$61.66 and Martinrea International Inc. retreated 0.6 percent to C$12.64 to pace declines among automotive-related companies. Metro fell 1.1 percent to C$65.08 and Jean Coutu dropped 1 percent to C$22.49.
Valeant gained 4.3 percent, the most since April, to C$134.93 after a Reuters report said Paulson has six million shares in Allergan and supports the Valeant deal. That would make it the Botox maker’s 11th biggest shareholder, according to data compiled by Bloomberg.
Atlantic Power Corp. sank 1.5 percent to C$3.86 after Rupert Merer, analyst at National Bank Financial, cut his rating for the electric power generator company to underperform, the equivalent of a sell, from sector perform.
“With a likely dividend cut, high debt and many moving parts, we remain cautious,” Merer said in a note to clients today.