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TORONTO (Reuters) - Canada's main stock index touched a one-week high on Tuesday as weakness in gold producers and smartphone maker BlackBerry (BB.TO) was offset by robust gains in the energy sector, fueled by a jump in the price of oil, and by a rise in Valeant Pharmaceuticals (VRX.TO).
Investors were encouraged by data showing U.S. new motor vehicle sales in June were poised to record their strongest month in more than 5-1/2 years and that factories posted a second straight month of gains in new orders in May.
The index climbed for a third straight session, playing catch-up with gains in global equities on Monday, when the Toronto market was closed for the Canada Day holiday.
The energy sector had the biggest positive influence on the Canadian market as supply worries in the Middle East and Africa boosted oil prices. <O/R>
"We're seeing value across the resource space, including energy, but definitely not without some volatility," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP. "On a relative basis, the valuations are becoming very attractive in the energy sector."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 49.27 points, or 0.41 percent, at 12,178.38. The index hit a high of 12,217.36 earlier in the session.
Despite Tuesday's gain, the resource-heavy index is down about 2.1 percent this year because of a lackluster outlook for commodities, trailing the S&P 500 .SPX and other global tock market measures.
"It is a stock picker's market," said Jordan Zinberg, managing director and portfolio manager at Donville Kent Asset Management. "Investors who are buying the index are going to be fairly disappointed; they have been fairly disappointed over the past few years."
"We're quite negative on the resource market," he added. "I don't think you'll see global money coming back to the Canadian market until you see the resource market pick up."
Donville Kent's Capital Ideas Fund, whose biggest holdings include Constellation Software Inc (CSU.TO) and Paladin Labs Inc PLB.TO, has had a return of investment of more than 12 percent since the start of the year.
Seven of the 10 main sectors on the index were higher on Tuesday.
Financials, the index's most heavily weighted sector, rose 0.2 percent. Toronto-Dominion Bank (TD.TO) climbed 0.3 percent to C$84.75.
Valeant advanced 4.8 percent to C$95 after RBC raised the stock's price target. The drugmaker played the biggest role of any single stock in leading the index higher and helped the healthcare group gain 2.1 percent.
But the materials sector, which includes mining stocks, gave back 2.1 percent. The group was dragged down by a nearly 3 percent drop in gold-mining shares as the bullion price slipped. <GOL/>
Barrick Gold Corp (ABX.TO) lost 7.7 percent to C$15.32. The miner was also hit by its plans to slow construction at its already delayed Pascua-Lama gold project in South America as it looks to rein in spending.
BlackBerry extended its decline after releasing a disappointing quarterly report on Friday. A slew of brokerages have since cut their ratings and price targets on the stock. BlackBerry dived 7.8 percent to C$10.22.
Editing by Chris Reese; and Peter Galloway