Canadian stocks rose, led by commodity producers on higher gold prices and after Glamis Gold Ltd. agreed to be bought by Goldcorp Inc. for about $8.6 billion to create the world's fifth-largest bullion producer.



``Resource companies are flush with cash. Pick your stock as to who will be the next target,'' said Gerry Brockelsby, who helps manage $266 million at Marquest Investment Counsel in Toronto, including Glamis Gold shares. ``The other thing driving the market is that as the economy slows, interest rates will come down. That's bullish for stocks.''


Glamis Gold jumped C$8.74 to C$51.76. The miner of gold in Nevada and Honduras agreed to be bought by larger rival Goldcorp Inc. for about $8.6 billion. The stock offer values each share of Reno, Nevada-based Glamis at $51.49, 33 percent more than yesterday's closing price, the companies said in a statement today.

Goldcorp shares dropped C$2.68 to C$31.09.

A gauge of raw-material shares rose 1.1 percent. It accounts for 16 percent of the S&P/TSX's value and is the best performer among 10 industry groups in the index this year, as commodity prices soared on rising global demand.

Gold futures for December delivery rose 1.2 percent to $633.50 an ounce in electronic trading in New York.