Canada Stocks Rise, Snap 3-Day Slide as Banks, Industrials Rally

  • Valeant tumbles as U.S. biotech shares fall into bear market
  • Energy producers advance as oil caps a 2nd weekly gain

Canada stocks snapped a three-day slump as gains among the largest banks and industrial companies offset a decline in health-care and data showed the U.S. economy expanded more than previously forecast.

Canadian equities added 0.3 percent, paring an earlier advance of as much as 1 percent in the final two hours of trading. Valeant Pharmaceuticals International Inc. tumbled to a four-month low to join a slump among U.S. health-care stocks as the Nasdaq Biotechnology Index plunged into a bear market. Bombardier Inc. soared 9.6 percent as industrial stocks rallied 1.7 percent as a group.

Drugmaker tumbles to lead health-care stocks lower

The Standard & Poor’s/TSX Composite Index rose 39.90 points to 13,378.57 at 4 p.m. in Toronto, paring a weekly decline to 2 percent. The index is headed for a fifth straight monthly drop and its worst quarter in four years.

“It’s a rotation,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about C$5.3 billion ($4 billion). “It’s been such a winner, the health-care sector. Now that the Fed has said rates will increase people will move back into financials.”

A gauge of developed and developing markets advanced for the first time since the Federal Reserve declined to raise interest rates at a policy meeting last week. Chair Janet Yellen, speaking in Massachusetts Thursday, said the central bank was prepared to raise interest rates in 2015 at a gradual pace to allow more Americans to find work.

Toronto-Dominion Bank and Bank of Nova Scotia advanced at least 0.9 percent to lead financial-services stocks higher. The S&P/TSX Banks Index gained 0.9 percent, halting a three-day retreat.

Valeant declined 4.9 percent for a second day of losses, to a May low. The drugmaker, the largest in Canada, has slumped 13 percent in September for the biggest monthly retreat since August 2011. The Nasdaq Biotechnology Index has lost 13 percent this week after a tweet from Democratic presidential candidate Hillary Clinton suggested there may be “price gouging” in the pricing of prescription medicine.

Global markets advanced, with the MSCI All-Country World Index rising 0.5 percent for the first increase in six days, paring an earlier advance as U.S. shares declined.

The U.S. economy rose at a 3.9 percent annualized rate in the second quarter revised from a prior estimate of 3.7 percent, boosted by gains in consumer spending and construction, according to a government report.

Canadian equities are among the worst-performing markets in the developed world this year, led by declines among raw-materials and energy producers of at least 22 percent, amid plunging oil prices and uncertainty about global economic growth, especially in China. China is Canada’s second-largest trading partner after the U.S.

Suncor Energy Inc. added 1.7 percent and Canadian Oil Sands Ltd. increased 2 percent as energy stocks rose 0.5 percent as a group. Oil rose in New York, advancing for a second week on signs retreating supply will begin to pare a global glut.

BlackBerry Ltd. sank 7.7 percent for a seventh day of losses that put it at the lowest since June 2014. The company reported a wider second-quarter loss than analysts estimated as smartphone shipments fell to the lowest since at least 2007.

Before it's here, it's on the Bloomberg Terminal.