TORONTO (Bloomberg) - Canadian stocks rose for the first time in three days, led by oil producers and banks, after US officials suggested stimulus policies may continue longer than investors thought.

Suncor Energy Inc., Canada's biggest energy company, added 1.9 percent as crude oil increased more than $2 a barrel before retreating. First Quantum Minerals Ltd. advanced 6.3 percent after agreeing to buy copper explorer Kiwara plc. for $260 million. Kinross Gold Corp., the country's third-largest gold producer, gained 1.5 percent as bullion reached a record price.

"People are gambling they're going to keep spending money, which is inflationary," said David Baskin, president of Baskin Financial Services Inc. in Toronto, referring to the US government.

"The best thing to do is own 'things' rather than US dollars, which drives up commodity prices."

The Standard & Poor's/TSX Composite Index climbed 44.69 points, or 0.4 percent, to 11,624.02.

The S&P/TSX has risen 6.5 percent this month as gold, copper and oil producers rallied on a weakening US dollar. Commodity-linked companies account for 46 percent of Canadian stocks by market value.

The US dollar declined 1.4 percent against the Canadian dollar after the presidents of two US Federal Reserve banks said monetary stimulus may continue further into 2010.

Charles Evans, president of the Federal Reserve Bank of Chicago, told the Financial Times that US interest rates may stay near zero until "late 2010, perhaps later in terms of 2011".'

James Bullard, the St. Louis Fed president, said he favours the US central bank seeking authority to continue buying mortgage-backed bonds after the first quarter of next year to bolster bank liquidity.

"That's obviously a little bit bullish for the market," said Mr. Baskin, whose firm manages about C$300 million ($283.9 million).

"It doesn't solve anything, it just buys time, but maybe that's what people want."

Canadian stocks also rose after Statistics Canada said retail sales increased one percent in September, exceeding the median forecast of 0.6 percent of 18 economists surveyed by Bloomberg.

Crude oil advanced to $79.92 a barrel at 10.08 a.m. in New York on the falling US dollar and an Iranian military exercise that renewed concerns over Middle Eastern supply. Futures ended floor trading at $77.56 a barrel.

---- Suncor, which bought Petro-Canada in August, advanced 1.9 percent to C$38.80, contributing the most to the S&P/TSX's gain. Canadian Oil Sands Trust, a co-owner of the Syncrude oil-sands project, increased 1.5 percent to C$30. Penn West Energy Trust, which produces oil and gas in Western Canada, rallied 2.8 percent to an 11-month high of C$19.23.---- First Quantum, which produces copper in Africa, added 6.3 percent to an 18-month high of C$80.11 after the deal to purchase Kiwara, which explores for the metal in Zambia. The Canadian government also had creditor nations delay debt relief for the Democratic Republic of Congo because of First Quantum and Lundin Mining Corp.'s disputes with the African country, according to a Congolese official.---- Gold rose 1.6 percent to $1,164.33 an ounce in New York. Kinross gained 1.5 percent to C$20.70. Agnico-Eagle Mines Ltd., which produces gold in North America, added 2.5 percent to C$66.68.---- Seven of eight Canadian publicly traded banks climbed. Royal Bank of Canada, the country's largest lender, advanced 1.2 percent to C$58.19, its highest closing price since June 1. Canadian Imperial Bank of Commerce (CIBC), the fifth-biggest lender in the country, increased one percent to C$68.25. In a note to clients, James Bantis of Credit Suisse Group AG wrote he remains "optimistic" on Royal Bank's long-term prospects and that "the worst for CIBC" may already be reflected in its share price.---- Monterey Exploration Ltd., which looks for natural gas in Western Canada, soared 16 percent to a record C$3.95. The company, which began trading on the TSX in September 2008, reported favourable drilling results.---- Livingston International Income Fund fell for a sixth day, losing 7.3 percent to C$8.12, after Mullen Group Ltd.'s takeover bid for the customs brokerage expired. Mullen, which provides oilfield and trucking services, climbed 4.4 percent to a 13-month high of C$16.39.