TORONTO (Bloomberg) - Canadian stocks gained for the seventh time in eight days as a rebound in gold producers offset drops in retailers and phone companies.

Materials stocks advanced after gold rose the most in a week and Goldcorp Inc. said fourth-quarter output was a record. Chain store operators fell after US retailers said profits will trail forecasts.

The Standard & Poor's/TSX Composite Index added 100.26, or 1.1 percent, to 9,221.58 after earlier losing as much as 1.2 percent. The benchmark gauge for Canadian stocks declined 35 percent in 2008, its steepest annual drop since 1931.

Gold climbed as the dollar fell, boosting demand for the precious metal as an alternative investment.

Gold futures gained 1.6 percent to close at $854.50 an ounce on the Comex division of the New York Mercantile Exchange.

Barrick Gold Corp. rose for the first time in five days, adding 4.7 percent to C$39.20. Kinross Gold Corp. jumped the most in two weeks, adding 6.4 percent to C$21.57. Canada's third-largest producer said it expects to increase production by as much as 39 percent this year as expansion of a Brazilian deposit and new mines in the US and Russia bolster output.

US retailers including Wal-Mart Stores Inc., Macy's Inc. and Gap Inc. slashed earnings forecasts after the worst holiday-shopping season in 40 years squeezed retail profit margins.

Bell Aliant Regional Communications Income Fund, a phone- service provider in rural Canada, dropped 2.8 percent to C$23.97. Rogers Communications Inc., Canada's largest mobile- phone carrier, slipped 1.7 percent to C$33.

Thomson Reuters Corp. slipped 5.6 percent to C$31.99. The financial data provider formed by the $15.9 billion acquisition of Reuters Group plc. said it expects revenue growth this year to slow compared with 2008, chief financial officer Robert Daleo said at a Citigroup Inc. investor conference in Phoenix.