(Bloomberg) -- Canadian stocks staged an afternoon comeback to almost erase losses before closing at a two-week low, as Valeant Pharmaceuticals International Inc. surged the most in 23 years to offset declines in industrial and bank shares.
The S&P/TSX Composite Index fell less than 0.1 percent to 14,778.32 at 4 p.m. in Toronto, the lowest since Oct. 18. The gauge fell as much as 0.5 percent before the Wall Street Journal's report on Valeant sent the stock surging 30 percent. The S&P/TSX rose 0.4 percent in October for a fourth monthly gain and is up 14 percent in 2016.
Financial shares slipped as Royal Bank of Canada fell 0.7 percent, sending the largest lender to its lowest level in more than two weeks. Thomson Reuters Corp. jumped 4 percent after it posted third-quarter profit that beat estimates. The company will cut 2,000 jobs worldwide and take a fourth-quarter charge of $200 million to $250 million to reduce expenses.
Valeant rallied after a report said the company is in talks to sell its Salix gastrointestinal drugs business for as much as $10 billion to Takeda Pharmaceutical Co Ltd. The stock rebounded after falling on Monday to the lowest since 2010, when people familiar with the matter said its former CEO and CFO are the focus of U.S. prosecutors as the as they build a fraud case against the company.
Among energy shares, Enbridge Inc. sank 0.8 percent, and Cameco Corp. fell 3.7 percent to weigh on the group. Crude in New York declined to a one-month low. Prices earlier swung between gains and losses as a projected U.S. stockpile gain added to supply concerns, while gasoline jumped after an explosion and fire in Alabama shut the largest fuel pipeline in the U.S.
Gold prices advanced before as the Federal Reserve began a two-day meeting and as investors grew more anxious ahead of a tight U.S. presidential race. Gold miners in the S&P/TSX rallied 2.9 percent, as Barrick Gold Corp. gained 4.5 percent and Goldcorp Inc. increased 2.1 percent to a one-week high.
WestJet Airlines Ltd. jumped the most since July after Canada's second-largest airline reported third-quarter profit that beat analysts' estimates and said capacity growth next year would slow.
Canadian stocks are now 17 percent more expensive than their peers in the S&P 500 Index. The S&P/TSX trades at 22.9 times earnings, compared with 19.9 for the S&P 500 Index. The S&P/TSX is the top performer among developed equity markets tracked by Bloomberg in 2016.
To contact the reporter on this story: John Hyland in New York at jhyland22@bloomberg.net. To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net.
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