Canadian Stocks Are Struggling To Find Direction -- Canadian Commentary

(RTTNews) - The Canadian stock market has climbed back into the green, after recovering from an early sell-off Wednesday morning. The market is attempting to bounce back from yesterday's modest pull back. The strong gains in gold and mining stocks are helping to offset the weakness in other sectors.

The majority of the European markets are posting modest gains Wednesday, thanks to some positive manufacturing data. Eurozone manufacturing sector expanded more than initially estimated as growth accelerated in Germany, Spain, Italy and the Netherlands.

Markets in the United States are under pressure Wednesday morning. The weaker than expected private sector employment report is weighing on the U.S. markets, as well as the disappointing ISM manufacturing report. Investors will be watching for the release of the U.S. jobs report for March on Friday, when equity markets will be closed for the Good Friday holiday.

Private sector job growth in the U.S. continued to slow in the month of March, according to a report released by payroll processor ADP on Wednesday. ADP said private sector employment climbed by 189,000 jobs in March following a slightly upwardly revised increase of 214,000 jobs in February.

Economists had expected an increase of about 230,000 jobs compared to the addition of 212,000 jobs originally reported for the previous month.

Manufacturing activity in the U.S. saw continued growth in the month of March, according to a report released by the Institute for Supply Management on Wednesday, although the pace of growth slowed by more than anticipated.

The ISM said its purchasing managers index dropped to 51.5 in March from 52.9 in February. While a reading above 50 indicates continued growth in manufacturing activity, economists had expected the index to show a more modest drop to 52.5.

After reporting a steep drop in U.S. construction spending in the previous month, the Commerce Department released a report on Wednesday showing that spending saw some further downside in the month of February

The report said construction spending edged down 0.1 percent to an annual rate of $967.2 billion in February after tumbling 1.7 percent to a revised $967.9 billion in January. The modest drop in spending came in line with economist estimates.

The benchmark S&P/TSX Composite Index is up 0.86 points or 0.01 percent at 14,903.30.

On Tuesday, the index closed down 5.95 points or 0.04 percent, at 14,902.44. The index scaled an intraday high of 14,962.83 and a low of 14,813.71.

The Gold Index is surging by 3.17 percent. Gold prices have climbed back above $1200 an ounce after the disappointing U.S. private sector employment report.

Goldcorp (G.TO) is increasing by 3.53 percent and Eldorado Gold (ELD.TO) is gaining 4.13 percent. Yamana Gold (YRI.TO) is advancing by 3.52 percent and IAMGOLD (IMG.TO) is rising by 3.81 percent. Kinross Gold (K.TO) is up 4.98 percent and Royal Gold (RGL.TO) is higher by 3.11 percent. Barrick Gold (ABX.TO) is also climbing by 4.40 percent.

Alamos Gold (AGI.TO) is gaining 1.21 percent. The company announced that it sold a small portion of its exploration package at Mulatos earlier this month, to Agnico Eagle Mines for U.S.$7 million in cash and a 2% net smelter returns royalty.

The Capped Materials Index is also rising by 1.67 percent. Agnico Eagle Mines (AEM.TO) is climbing by 4.06 percent and Franco-Nevada (FNV.TO) is adding 1.48 percent. Silver Wheaton (SLW.TO) is up 3.41 percent and Potash Corp. of Saskatchewan (POT.TO) is advancing by 0.37 percent.

The Diversified Metal and Mining Index is increasing by 0.63 percent. First Quantum (FM.TO) is climbing by 1.63 percent and Capstone Mining (CS.TO) is adding 0.83 percent. HudBay Minerals (HBM.TO) is rising by 1.30 percent and Turquoise Hill Resources (TRQ.TO) is up 1.01 percent.

The Energy Index is rising by 0.78 percent. Crude oil prices are steady Wednesday morning, having shown little direction over the course of the week so far.

Talks on Iran's nuclear program have been extended after the sides failed to reach an agreement by Tuesday's deadline. Traders are waiting to see whether a deal means an influx of Iran's oil will flood the oil markets.

Canadian Oil Sands (COS.TO) is up 2.74 percent and Encana (ECA.TO) is adding 0.18 percent. Crescent Point Energy (CPG.TO) is increasing by 0.67 percent and Cenovus Energy (CVE.TO) is advancing by 0.61percent.

Suncor Energy (SU.TO) is also climbing by 1.30 percent and Pacific Rubiales Energy (PRE.TO) is higher by 0.66 percent. Canadian Natural Resources (CNQ.TO) is also up 0.72 percent.

The heavyweight Financial Index is falling by 0.46 percent. Bank of Montreal (BMO.TO) is down 0.76 percent and Toronto-Dominion Bank (TD.TO) is falling by 0.26 percent. Bank of Nova Scotia (BNS.TO) is declining by 0.58 percent and Canadian Imperial Bank of Commerce (CM.TO) is lower by 0.56 percent. National Bank of Canada (NA.TO) is also losing 0.63 percent.

Royal Bank of Canada (RY.TO) is lower by 0.51 percent. The company announced that it has entered into a definitive agreement to sell RBC Royal Bank (Suriname) N.V. to Republic Bank Limited. Financial terms of the transaction were not disclosed.

The Capped Health Care Index is rising by 0.60 percent. Extendicare (EXE.TO) is up 0.20 percent.

The Capped Information Technology Index is lower by 0.47 percent. Sierra Wireless (SW.TO) is falling by 1.19 percent and Constellation Software (CSU.TO) is down 2.02 percent. Descartes Systems Group (DSG.TO) is also lower by 1.15 percent.

Keyera (KEY.TO) is climbing by 5.57 percent. The company announced a 50-50 joint venture with Kinder Morgan Inc. to build the Base Line Terminal.

Kingsway Financial (KFS.TO) is up 3.49 percent, after it sold its subsidiary, Assigned Risk Solutions Ltd. , to National General Holdings Corp. for $47 million.

On the economic front, China's manufacturing sector slipped into contraction in March, the latest report from HSBC showed on Wednesday, with a PMI score of 49.6. That was higher than the preliminary reading of 49.2, although it was down from 50.7 in February. It also moved below the boom-or-bust line of 50 that separates expansion from contraction.

Eurozone manufacturing sector expanded more than initially estimated as growth accelerated in Germany, Spain, Italy and the Netherlands, final data from Markit Economics showed Wednesday. The Purchasing Mangers' Index rose to a 10-month high of 52.2 in March from 51 in February. The flash score was 51.9.

German manufacturing growth in March was faster than estimated earlier, marking the strongest improvement in eleven months, survey data from Markit Economics showed Wednesday. The Markit/BME Germany Manufacturing Purchasing Managers' Index climbed to 52.8 from 51.1 in February. The flash reading for the index was 52.4, released on March 24.

The French manufacturing sector continued to contract in March but at a slower than initially estimated pace, final data from Markit revealed Wednesday. The Purchasing Managers' Index came in at 48.8 in March, up from 47.6 in February. The flash score was 48.2.

British manufacturing sector expanded at the fastest pace in eight months during March as orders and production growth gathered momentum.

The Purchasing Managers' Index rose to 54.4 from 54 in February, which was revised down from 54.1, survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed Wednesday. The latest PMI reading was in line with economists' expectations.

U.K. labor productivity declined in the fourth quarter, while labor costs rose moderately, data from the Office for National Statistics showed Wednesday. Labor productivity as measured by output per hour dropped 0.2 percent in the fourth quarter from prior three months, when it grew 0.5 percent.

In commodities, crude oil futures for April delivery are up $0.21 or 0.44 percent at $47.81 a barrel.

Natural gas for April is down $0.046 or 1.74 percent at $2.594 per million btu.

Gold futures for April are up $18.60 or 1.57 percent at $1,201.80 an ounce.

Silver for May is up $0.252 or 1.52 percent at $16.85 an ounce.