A streetcar is seen at Bay and King St in the financial district in Toronto on Jan. 22.Mark Blinch/The Globe and Mail
Canadian stocks rose the most in two months as energy producers jumped with the price of crude and health-care companies rallied with railroads.
Penn West Petroleum Ltd. gained 7.2 per cent to lead a rise in energy shares as oil advanced 3 per cent in New York. Valeant Pharmaceuticals International Inc. jumped 2.4 per cent, contributing to a 2-per-cent gain for health-care companies. Canadian Pacific Railway Ltd. climbed 1.8 per cent.
The Standard & Poor's/TSX Composite Index rose 130.78 points, or 0.9 per cent, to 15,203.61 in Toronto, for the best rally since March 16.
Seven of 10 industries in the S&P/TSX gained on trading volume 7.3 per cent lower than the 30-day average. Crescent Point Energy Corp. and Trinidad Drilling Ltd. rose more than 5.2 per cent, as energy shares gained 2 per cent as a group.
Oil rose for a second day as U.S. crude stockpiles shrank, indicating the supply glut may be easing. Futures advanced 3 per cent in New York.
Valeant Pharmaceuticals added to annual gains that together with Concordia Healthcare Corp. have boosted total returns for the members of the S&P/TSX Composite Health Care Index to almost six times that of its U.S. counterpart, according to data compiled by Bloomberg.
ATS Automation Tooling Systems, Inc. soared 8.2 per cent, the most in the S&P/TSX after reporting first quarter earnings that outpaced analysts' estimates.
Shopify Inc shares surged on their first day of trading in Toronto and New York. The Canadian e-commerce software maker priced its initial public offering at $17 a share, and the stock finished at $31.25 in Toronto.
The loonie was down 0.08 of a U.S. cent at 81.91 cents.
The S&P 500 closed at a record high on Thursday after disappointing economic data bolstered expectations that an interest rate hike is likely to come only later in the year.
Traders warned that below-average volume in recent sessions suggests that not all of Wall Street may be confident in the market's gains.
"It doesn't matter if we're at an all-time high if there are just two guys trading a stock back and forth," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "It's something to be aware of."
As the quarterly earnings reporting season draws to a close, volume on U.S. stock markets has been below the month-to-date average for several sessions.
On Thursday, about 5.6 billion shares changed hands on U.S. exchanges, below the 6.3 billion average this month, according to BATS Global Markets.
Data showed that jobless claims rose more than expected last week, although the underlying trend continued to point to a rapidly tightening labor market.
Another report showed a surprise decline in home resales in April and persistent weakness in manufacturing in May.
Federal Reserve officials have all but ruled out a rate hike next month. Investors now await Fed Chair Janet Yellen's speech on Friday for new clues about when the central bank will begin raising interest rates for the first time since 2006.
The S&P 500 gained 4.97 points, or 0.23 per cent, to end at 2,130.82 points, barely beating its previous record close of 2,129.2 from Monday.
The Dow Jones industrial average was essentially flat, ending up 0.34 point at 18,285.74.
The Nasdaq Composite rose 19.05 points, or 0.38 per cent, to 5,090.79, just short of its record close of 5,092.08 on April 24.
"We're locked in this environment where we're more trendless than trending," said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68-billion. "There's enough buying power to keep a bid in equity prices. We're in this trendless, sideways trading range, maybe grinding higher but no breakout one way or the other."
Recent highs set by stock indexes have won little enthusiasm on trading floors, said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
"There is not an underlying sense of 'Hey we're ready to bust out,'" Mr. Charlop said. "It's not as if people are jumping up and down saying there's a robust economy that's generating tremendous employment."
Seven of the 10 major S&P 500 sectors were higher, with the energy index rising 0.84 per cent as oil prices rose for a second day.
Salesforce.com, the subject of takeover speculation for the past few weeks, rose 3.92 per cent to $72.91 after posting a profit for the first time in seven quarters.
Advancing issues outnumbered declining ones on the NYSE by 1,684 to 1,355, for a 1.24-to-1 ratio on the upside; on the Nasdaq, 1,384 issues rose and 1,369 fell for a 1.01-to-1 ratio favoring advancers.
The benchmark S&P 500 index posted 20 new 52-week highs and two new lows; the Nasdaq Composite recorded 75 new highs and 48 new lows.
Oil rose for a second day as U.S. crude stockpiles shrank, indicating the supply glut may be easing.
Inventories slid for a third consecutive week in the seven days ended May 15, the Energy Information Administration said Wednesday. Oil extended gains after Genscape Inc. reported a decline in supplies at Cushing, Okla., the delivery point for New York futures, according to Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
"People are seeing that we are going to have the normal trend of falling inventories," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.. "They had been worried about stockpiles reaching capacity."
Oil's rebound from a six-year low has faltered this month around $60 a barrel amid speculation that rising prices will encourage U.S. production. Crude stockpiles near the highest level in 85 years will continue to weigh on the market, according to Goldman Sachs Group Inc., Deutsche Bank AG and Citigroup Inc.
West Texas Intermediate for July delivery gained $1.74, or 3 per cent, to end at $60.72 a barrel on the New York Mercantile Exchange. Front-month futures are up 1.8 per cent this month after surging 25 per cent in April.
Brent for July settlement climbed $1.51, or 2.3 per cent, to $66.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark traded at a premium of $5.82 to WTI.
Crude stockpiles in the U.S. fell by 2.67 million barrels to 482.2 million in the week ended May 15, according to the EIA. Supplies were about 100 million barrels above the five-year average for this time of the year. Inventories at Cushing, the delivery point for WTI, dropped 241,000 barrels to 60.44 million, a fourth weekly decline.
With files from Reuters and The Canadian Press