Canadian stocks declined on Friday, as the best weekly gain since early October fizzled amid renewed selling in metals miners.
Health-care shares rose 2 per cent and bolstered the Canadian market during the week. Valeant Pharmaceuticals International Inc. surged 8.3 per cent on Friday.
Commodity producers have lagged, as oil hovers near $40 a barrel and industrial metals trade at multi-year lows.
The Standard & Poor's/TSX Composite Index fell 40.34 points, or 0.3 per cent, to 13,433.49 in Toronto. The S&P/TSX has added 2.7 per cent this week.
The benchmark's heavy weighting toward commodity shares has kept its gains in check during the latest week. Energy and raw- materials producers retreated at least 1.9 per cent Friday, as oil had a third weekly loss. Crude dipped briefly below $40 (U.S.) a barrel in New York Wednesday for the first time since August. Gold traded near a five-year low.
Among the influential stocks to retreat Friday were: Barrick Gold Corp., which fell 4.7 per cent; EnCana Corp. was down 3.9 per cent; Goldcorp Inc. declined 2.7 per cent and Potash Corp. of Saskatchewan was off 2.8 per cent.
Rogers Communications Inc was up 0.8 per cent, while Restaurant Brands International Inc also increased 0.8 per cent.
U.S. stocks advanced, with the Standard & Poor's 500 Index capping its best weekly gain this year, as Nike Inc. paced a rally in consumer companies andEuropean Central Bank President Mario Draghi hinted at additional stimulus.
Equities reversed most of last week's selloff, boosted by a snap-back among retailers in the S&P 500. The group was on track for its strongest week in four years, immediately after suffering the worst weekly drop since 2011. Ross Stores Inc. and Gap Inc. helped power the sector's rally Friday. Nike's 5.1-per-cent gain bolstered the broader consumer group on its $12-billion buyback plan and dividend increase.
The S&P 500 added 0.4 per cent to 2,089.19 in New York, after rising as much as 0.8 per cent. Declines in energy and consumer staples shares whittled down earlier gains.
The Dow Jones industrial average rose 92.13 points, or 0.52 per cent, to 17,824.88, while the Nasdaq Composite added 31.28 points, or 0.62 per cent, to 5,104.92.
"There's continued upward momentum in the market as people get more comfortable with the fact that rates are probably going up, and they're only going up because the economy is strong enough to justify that," said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. "I don't think people were positioned for that coming into the week, and I think that's why you've seen the market do as well as it has."
The S&P 500 rose 3.3 per cent this week, the most since December, as shares rebounded from the worst weekly decline in almost three months. Minutes from the Federal Reserve's October meeting released Wednesday stressed that the pace of any interest-rate increases will be gradual, reassuring investors that higher borrowing costs won't derail economic growth. The index has rallied 12 per cent from its August trough and is 2 per cent from its all-time high set in May.
While U.S. policy makers are preparing investors for higher interest rates, the ECB's Draghi hinted at further stimulus measures saying today that the institution will do what's necessary to reach its inflation goal rapidly. His comments underline the ECB's concern that the inflation rate in the euro area will slip further amid a high degree of economic slack and slumping oil prices. The central bank's next monetary policy meeting is Dec. 3.
Fed Bank of St. Louis President James Bullard said Friday investors should prepare for uncertainty on whether the Federal Open Market Committee will raise its target interest rate at each meeting next year, as the era of signaling moves is over. Fed Bank of New York President William C. Dudley reiterated in separate comments Friday that a rate decision in December will be dependent on economic data.
Late Thursday in San Francisco, Fed Vice Chairman Stanley Fischer said the central bank has done its best to prepare international markets for higher rates and reiterated that no decision has been made yet about the precise timing of liftoff.
Recent data has bolstered the case for raising borrowing costs for the first time since 2006, with the latest payroll report -- released after the Fed's October meeting -- showing the biggest increase in hiring this year while claims for jobless benefits hover near four-decade lows. Traders are now pricing in a 68-per-cent probability that the Fed will raise rates next month.
"A rate hike has got to be the central case for December," said Alex Scott, who helps oversee about $14-billion as Seven Investment Management's deputy chief investment officer. "There's still a little event risk around this. It's important that the Fed's language is couched in very dovish terms to offer significant reassurance to investors. The fact that we saw some very strong gains in the market just this week is a fairly good sign that markets are prepared to deal with it."
Oil capped a third weekly decline in New York on signs a global glut will be prolonged as U.S. stockpiles see their longest run of gains in seven months.
West Texas Intermediate oil fell 0.9 per cent this week. U.S. crude stockpiles rose an eighth week, leaving supplies more than 100 million barrels above the five-year average for this time of year, government data showed Wednesday. Brent futures climbed in London after European Central Bank President Mario Draghi hinted at additional stimulus.
"The world is awash in oil," Gene McGillian, a senior analyst at Tradition Energy in Stamford, Conn., said. "Prices should continue to grind lower until we start to see a drop-off in inventories."
Crude has slumped 47 per cent in the past year amid speculation a surplus will persist as the Organization of Petroleum Exporting Countries, threatened by surging output mainly from North America and Russia, continues to pump above its quota. Saudi Arabia is working with producers inside and outside the 12-member group to stabilize the market, Saudi Oil Minister Ali al-Naimi said in Bahrain Thursday.
West Texas Intermediate for December delivery, which expired Friday, fell 15 cents, or 0.4 per cent, to settle at $40.39 a barrel on the New York Mercantile Exchange. It was the lowest close for a contract closest to expiration since Aug. 26. The more-active January futures increased 18 cents to $41.90.
Brent for January settlement advanced 48 cents, or 1.1 per cent, to end the session at $44.66 a barrel on the London- based ICE Futures Europe exchange. The European benchmark crude closed at a $2.76 premium to January WTI.
U.S. crude stockpiles expanded to 487.3 million barrels in the week ended Nov. 13, according to Energy Information Administration data. Refinery rates rose while inventories at Cushing, Okla., the delivery point for WTI and the biggest U.S. oil-storage hub, increased for a second week.
The global economy is going through an unstable period, Saudi Arabia's al-Naimi said Thursday. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for declining recovery rates, he said.
Brent gained afterMr. Draghi set the scene for further action in two weeks' time, saying the institution will do what's necessary to reach its inflation goal rapidly.
WTI climbed from its lows after the number of active U.S. oil rigs dropped to a five-year low. The active oil rig count fell by 10 to 564 this week, according to data compiled by Baker Hughes Inc.