Canadian Stocks Are Pulling Back On Oil Weakness -- Canadian Commentary

(RTTNews) - The Canadian stock market is trading to the downside Thursday morning, extending its losses from the previous trading session. The market snapped a 6-session winning streak yesterday, following a sharp drop in crude oil prices. That trend continues this morning, as the price of a barrel of oil has dropped back below $50 per barrel.

The majority of the European markets are posting modest gains Thursday. Greece has reportedly sought an extension of the much talked EUR 240 billion bailout programme, for six months. The European Central Bank has also reportedly approved to raise the support under the Emergency Liquidity Assistance for Greek banks on Wednesday. The limit was increased by EUR 3.3 billion to EUR 68.3 billion.

Markets in the United States are struggling to find direction Thursday, extending the lackluster performance seen in the two previous sessions. U.S. economic data continues to disappoint investors. The Philly Fed index came in weaker than expected and the rise in the leading economic index was slightly lower than anticipated. However, weekly jobless claims fell by more than expected.

The benchmark S&P/TSX Composite Index is down 41.85 points or 0.28 percent at 15,170.90. The index reached an early low of 15,099.91, but is off its intraday high of 15,198.88.

On Wednesday, the index closed down 71.86 points or 0.47 percent, at 15,212.75. The index scaled an intraday high of 15,286.39 and a low of 15,178.04.

The Energy Index is the largest drag on the markets this morning, falling by 1.09 percent. Oil prices have dropped back below $50 a barrel, due to a huge build in U.S. inventories. U.S. crude-oil supplies for the week ending February 13 jumped 14.3 million-barrel from a week earlier.

Encana (ECA.TO) is falling by 0.82 percent and Suncor Energy (SU.TO) is losing 1.79 percent. Canadian Natural Resources (CNQ.TO) is down 1.34 percent and Cenovus Energy (CVE.TO) is lower by 0.05 percent.

Canadian Oil Sands (COS.TO) is losing 1.50 percent and CrescentPoint Energy (CPG.TO) is lower by 1.91 percent. Vermilion Energy (VET.TO) is declining by 0.59 percent and MEG Energy (MEG.TO) is sinking by 5.00 percent.

Talisman Energy (TLM.TO) is increasing by 1.05 percent. The holders of its Common Shares and Preferred Shares have approved the proposed arrangement under which Spanish oil major Repsol S.A. will acquire the company through a wholly-owned subsidiary.

The heavyweight Financial Index is also down 0.66 percent. National Bank of Canada (NA.TO) is lower by 0.17 percent and Royal Bank of Canada (RY.TO) is declining by 0.91 percent. Bank of Montreal (BMO.TO) is losing 0.31 percent and Canadian Imperial Bank of Commerce (CM.TO) is decreasing by 0.62 percent. Toronto-Dominion Bank (TD.TO) is falling by 1.03 percent and Bank of Nova Scotia (BNS.TO) is weaker by 0.69 percent.

The Diversified Metal and Mining Index is rising by 0.06 percent. Lundin Mining (LUN.TO) is up 1.71 percent and HudBay Minerals (HBM.TO) is increasing by 0.94 percent.

Capstone Mining (CS.TO) is declining by 2.82 percent and Teck Resources (TCK-B.TO) is losing 0.90 percent.

Finning International (FTT.TO) is sinking by 5.17 percent. The company reported fourth quarter basic EPS of C$0.62, compared to C$0.54 a year ago.

The Gold Index is also up 0.54 percent, as the price of gold rebounds from recent weakness. Kinross Gold (K.TO) is advancing by 1.45 percent and Yamana Gold (YRI.TO) is adding 1.20 percent.

IAMGOLD (IMG.TO) is increasing by 2.41 percent. The company reported fourth quarter adjusted EPS of $0.03, compared to $0.05 in the prior year period.

Alamos Gold (AGI.TO) is up 1.51 percent. The company reported a fourth-quarter net loss of $0.03 per share, which matched expectations.

Barrick Gold (ABX.TO) is surging by 6.97 percent. The company reported fourth quarter adjusted EPS $0.15, which surpassed the consensus estimate of $0.13.

Goldcorp (G.TO) is declining by 3.32 percent. The company reported fourth quarter adjusted EPS of $0.07, down from $0.09 last year. Analysts had expected EPS of $0.12.

The Capped Materials Index is also gaining 0.66 percent. Potash Corp. of Saskatchewan (POT.TO) is higher by 1.49 and Agrium (AGU.TO) is adding 2.15 percent.

The Health Care Index is climbing by 0.53 percent. Valeant Pharmaceuticals International (VRX.TO) is up 0.99 percent and Catamaran (CCT.TO) is gaining 0.35 percent.

easyhome (EH.TO) is soaring by 11.00 percent. The company reported fourth quarter EPS of $0.51, compared to $0.33 in the previous year.

On the economic front, the euro area current account surplus declined to a four-month low in December, the European Central Bank reported Thursday. The current account surplus dropped to EUR 17.8 billion in December from EUR 19.9 billion in November. This level was last seen in August.

French consumer prices declined for the first time since October 2009, the statistical office Insee said Thursday. Consumer prices fell more-than-expected 0.4 percent in January from last year, reversing a 0.1 percent rise in December. Prices were expected to drop 0.3 percent.

This was the first decrease since October 2009 and matched the 0.4 percent drop seen in September 2009.

After reporting increases in first-time claims for U.S. unemployment benefits in the two previous weeks, the Labor Department released a report on Thursday showing that initial jobless claims pulled back by more than expected in the week ended February 14th.

The report said initial jobless claims fell to 283,000, a decrease of 21,000 from the previous week's unrevised level of 304,000. Economists had been expecting initial jobless claims to show a somewhat more modest decrease to a level of 290,000.

While the Federal Reserve Bank of Philadelphia released a report on Thursday showing continued growth in regional manufacturing activity in the month of February, the pace of growth unexpectedly slowed for the third consecutive month.

The report said the diffusion index for current general activity fell to 5.2 in February from 6.3 in January, although a positive reading indicates a continued increase in regional manufacturing activity. The modest decrease came as a surprise to economists, who had expected the Philly Fed index to climb to a reading of 9.0.

Suggesting a positive short-term outlook, the Conference Board released a report on Thursday showing a modest increase by its index of leading U.S. economic indicators in the month of January. The Conference Board said the leading economic index edged up by 0.2 percent in January following a downwardly revised 0.4 percent increase in December.

Economists had expected the index to rise by 0.3 percent compared to the 0.5 percent advance originally reported for the previous month.

In commodities, crude oil futures for March delivery are down $2.29 or 4.39 percent at $49.85 a barrel.

Natural gas for March is up $0.005 or 0.18 percent at $2.836 per million btu.

Gold futures for April are up $11.50 or 0.96 percent at $1,211.70 an ounce.

Silver for March is up $0.25 or 1.54 percent at $16.515 an ounce.