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A Canadian flag waves in the financial district in Toronto on June 2, 2014.Mark Blinch/The Globe and Mail

Canadian stocks rose a second day, paring a third week of losses, as raw-materials producers and railway shares climbed.

Labrador Iron Ore Royalty Corp. surged 11 per cent after Osisko Gold Royalties Ltd. bought a stake in the company. Canadian National Railway Co. and Canadian Pacific Railway Ltd. gained at least 0.8 percent to pace gains among industrial stocks.

The Standard & Poor's/TSX Composite Index gained 80 points, or 0.5 per cent, to 15,108.12 in Toronto. The index dropped 0.4 percent this week, for a third decline, its worst streak this year.

Stantec Inc. rallied 3.7 per cent and Air Canada climbed 1 per cent as industrials shares increased 1.2 per cent as a group. Nine of 10 industries in the S&P/TSX rose on trading volume 17 per cent lower than the 30-day average.

Canadian factory sales rose 2.9 per cent to $51-billion in March, the fastest pace in almost four years, as production of planes and automobiles rebounded. Economists had forecast a median 1-per-cent increase. A weaker Canadian dollar is helping manufacturing because it makes their goods cheaper to foreign customers.

Fortuna Silver Mines Inc. added 3.3 per cent as silver futures for July delivery increased in New York. Gold futures capped the biggest weekly rally since mid-January, climbing 2.9 per cent. OceanaGold Corp. rose 3.2 per cent.

Manulife Financial Corp. retreated 0.5 per cent for a fourth day of losses. The S&P/TSX Financials Index lost 0.1 per cent as Toronto-Dominion Bank and Royal Bank of Canada, the nation's largest lenders, each slipped.

On Wall Street, the Standard & Poor's 500 Index closed at record for a second consecutive day, as investors speculated the Federal Reserve would continue to support economic growth after data showed an unexpected drop in consumer confidence and weak factory output.

The S&P 500 rose 0.1 per cent to 2,122.70 in New York. The gauge added 0.3 per cent this week for its first back-to-back weekly gain in more than a month.

"The data plays into the renewed concern that economy in the second quarter will move at a glacial place, renewing hope that the Fed won't move aggressively in 2015," said Chad Morganlander, a money manager at Stifel, Nicolaus & Co., which oversees about $170-billion (U.S.). "The market is listless today and you had a big move yesterday that took everybody by surprise on the back of economic data."

Consumer confidence unexpectedly fell in May by the most in more than two years, as the University of Michigan preliminary index of sentiment dropped to the lowest since October.

A separate report showed factory production stalled in April, following a 0.3 per cent March gain that was larger than previously estimated. The data add to previous reports that suggest economic growth isn't strong enough to warrant higher interest rates.

A report Thursday showed wholesale prices unexpectedly declined in April, indicating inflation is well-contained as Fed officials weigh when to raise the benchmark rate. Concern the Fed would raise interest rates even with worsening economic data and predictions for earnings declines have whipsawed stocks between gains and losses in the past six weeks.

Signs that the global bond market selloff has run its course and the dollar's retreat Thursday spurred gains in multinational companies, helping the S&P 500 erase declines earlier in the week and close at a new high. The weaker dollar lessens the drag on the economy and corporate profits as it makes exports more competitive.

With the earnings season drawing to a close, S&P 500 members are now on track to deliver income growth of 0.4 per cent in the first quarter, compared with projections for a 5.8-per-cent decline as recently as March. Out of 460 S&P 500 companies that have reported earnings, 72 per cent have beaten earnings expectations, while 47 per cent have exceeded sales estimates.

For the week, the Dow closed 0.4 per cent higher, the S&P rose 0.3 per cent and the Nasdaq added 0.9 per cent.

On Friday, seven of the 10 major S&P 500 sectors rose, with the utilities index up 1.26 per cent.

Bank of America, which dropped 1.02 per cent, weighed most on the S&P 500, while Netflix was its strongest positive influence.

Netflix rose 4.50 per cent to $613.24 after Bloomberg reported it was in talks to enter China. The stock has soared 80 per cent this year.

With files from Reuters

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