TORONTO (Bloomberg) — Canadian stocks rose, extending the stock index's rally to a third week, as take-over speculation and higher crude oil prices fuelled gains in phone and energy companies such as BCE and Canadian Natural Resources."Canada's on fire," said Keith Summers, who helps oversee $762 million as chief investment officer at Stonegate Private Counsel in Toronto. "The momentum is all positive, driven by commodities. Foreigners need more dollars to buy the Canadian companies."

The Standard & Poor's/TSX Composite Index added 4.63 to 14,105.34 in Toronto and posted a gain of 0.7 percent for the week. The index has advanced 5.1 percent in May. Trading was below average before the May 21 Victoria Day holiday, when the Toronto Stock Exchange is closed.

Today's gains were limited as interest-rate sensitive financial shares fell on speculation that the Canadian dollar's appreciation to an almost 30-year high may lead the central bank to raise borrowing costs.

BCE rose 84 cents to C$38.72, taking its weekly gain to four percent. Cerberus Capital Management LP, the New York-based buyout firm, has approached Shaw Communications and CanWest Global Communications about joining in a take-over bid for BCE, Canada's biggest phone company, the Globe and Mail said, citing people familiar with the matter whom it didn't identify. An unidentified spokeswoman for Cerberus wouldn't comment, the newspaper reported.

BCE shareholder Canada Pension Plan Investment Board is leading a group that has said it is interested in bidding, and Ontario Teachers' Pension Plan may also bid, the newspaper said.

BCE shares have risen 29 percent, adding almost C$10 billion in market value, since March 28, the day before it emerged that BCE had been approached about a sale by US private-equity firm Kohlberg Kravis Roberts & Co.