TORONTO (Bloomberg) - Canadian stocks rallied on speculation a sell-off the past three weeks was overdone, after the main equity index slipped 10 percent from its record, completing a market "correction". Research In Motion Ltd. rose for the first time in three days to lead the advance.

Transport companies such as Canadian National Railroad Co. gained on the prospect that falling oil prices will temper increases in fuel costs. Potash Corp. of Saskatchewan Inc. rebounded from a five-week low on a forecast that prices of the crop nutrient will rise further. Canadian Natural Resources Ltd., paced declines among energy and materials producers, on oil's retreat.

The Standard & Poor's/TSX Composite Index climbed 0.7 percent to 13,809.77 in Toronto, rebounding from a 1.1 percent drop earlier in the day. At the session low, the benchmark had retreated more than 10 percent from its June 18 record.

Research In Motion rose 5.6 percent to C$123.75, rising from the lowest since March 31. The maker of the BlackBerry phone has a dominant position in the rapidly expanding market for enterprise mobile e-mail smart phones, Lehman Brothers Holdings Inc. analyst Jeff Kvaal wrote in a note. The New York-based analyst reiterated his "overweight" recommendation and C$168.49 share-price target.

Canadian National, the country's largest railroad, advanced six percent to C$48.97. Smaller rival Canadian Pacific Railway Ltd. jumped seven percent to C$66.06 for its steepest gain in a year.

WestJet Airlines Ltd. rose the most since March 2005, adding 11 percent to C$14.10.

Canada's second-biggest airline and Southwest Airlines Co. of the US, the largest low-fare carrier, agreed to create a marketing and sales alliance by late 2009.

Potash Corp. of Saskatchewan Inc. added 3.8 percent to C$219.22 after dropping as low as C$201.59 earlier.