TSX Ends A Shade Lower As Gold Prices Dip -- Canadian Commentary

(RTTNews) - Canadian stocks dropped slightly to end at a near three-month low Tuesday, as raw material stocks took a hit with gold prices declining, offsetting gains in the energy sector. The dip comes just ahead of the U.S. Federal Reserve's policy meet conclusion on Wednesday, even as most major global equity markets made gains although concerns over a Greece default on its sovereign debt persisted.

The majority of the Canadian sectors ended in the red, with gold and mining stocks among the weakest performers as precious metal prices fell.

Most European markets settled with gains following yesterday's sharp drop. Concerns about the situation in Greece continue to weigh on markets, as the debt-laden country remains at an impasse with its international creditors.

Markets in the United States struggled to find direction this morning, but recovered later to end largely in positive territory. The major averages, the Dow, the Nasdaq, and the S&P 500 finished firmly in positive territory, with some bargain hunting contributing to the gains.

The Fed is not expected to announce an increase in interest rates due to some recent signs of economic sluggishness, but traders will be paying close attention to any hints as to the timing of the first rate hike.

In some mixed economic news from the U.S., building permits, an indicator of future housing demand, surged 11.8 percent in May. Nevertheless, housing starts in the U.S. pulled back more than expected in May, after reporting a sharp jump in new residential construction in the previous month.

The benchmark S&P/TSX Composite Index closed Tuesday at 14,753.05, down 3.00 points or 0.02 percent. The index scaled an intraday high of 14,753.99 and a low of 14,683.38.

On Monday, the index closed higher by 14.90 points or 0.10 percent, at 14,756.05. The index scaled an intraday high of 14,784.53 and a low of 14,651.36.

Crude oil futures ended higher, ahead of the U.S. supply data which investors expect will show a dip in crude stockpiles, signaling the ramp down of shale production by U.S. companies. Official data from the U.S. Energy Information Administration has shown stockpiles to have dropped for the last six consecutive weeks.

The American Petroleum Institute is scheduled to publish its weekly U.S. oil inventories report later today, followed by official data from the U.S. Energy Information Administration on Wednesday.

The Energy Index gained 0.72 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, gaining $0.45 or 0.8 percent, to settle at $59.97 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) moved up 0.73 percent, while Crescent Point Energy Corp. (CPG.TO) gained 2.37 percent. Encana Corp. (ECA.TO) added 2.33 percent, and Enbridge Inc. (ENB.TO) fell 0.34 percent.

Canadian Oil Sands Limited (COS.TO) added 0.10 percent, while Pacific Rubiales Energy Corp. (PRE.TO) gained 1.27 percent.

Cenovus Energy Inc. (CVE.TO) moved up2.81 percent, while Canadian Natural Resources Limited (CNQ.TO) added 0.37 percent.

Gold futures lower as the dollar strengthened against a basket of major currencies, with investors opting for the riskier equity assets, after the U.S. Federal Reserve began its highly anticipated two-day policy meet.

The Gold Index dropped 1.54 percent, with gold for August delivery shedding $4.90 or 0.4 percent to settle at $1,180.90 an ounce in electronic trade on the New York Mercantile Exchange Tuesday.

Among gold stocks, dropped 0.77 percent, Barrick Gold Corp. (ABX.TO) dropped 2.47 percent, and Kinross Gold Corp. (K.TO) fell 2.41 percent. IAMGOLD Corp. (IMG.TO) surrendered 1.40 percent, while Eldorado Gold Corp. (ELD.TO) dived 2.50 percent.

The Capped Materials Index fell 0.97 percent, as Agrium Inc. (AGU.TO) dipped 0.20 percent, Agnico Eagle Mines Limited (AEM.TO) shed 2.69 percent. Franco-Nevada Corp. (FNV.TO) inched up 0.07 percent, while Potash Corp. of Saskatchewan Inc. (POT.TO) gathered 0.99 percent.

Goldcorp Inc. (G.TO) shed 1.85 percent, after revealing that it will sell 58,051,692 common shares of Tahoe Resources at C$17.20 per common share.

The Diversified Metals & Mining Index fell 1.01 percent, as First Quantum Minerals Ltd. (FM.TO) added 0.41 percent, Lundin Mining Corp. (LUN.TO) slipped 1.29 percent, and Teck Resources (TCK.B.TO) shed 1.89 percent.

The heavyweight Financial Index gained 0.16 percent, as Royal Bank of Canada (RY.TO) moved up 0.36 percent, National Bank of Canada (NA.TO) added 0.14 percent, and Bank of Montreal (BMO.TO) gathered 0.35 percent.

Bank of Nova Scotia (BNS.TO) surrendered 0.42 percent, while Toronto-Dominion Bank (TD.TO) moved up 0.17 percent. Canadian Imperial Bank of Commerce (CM.TO) gained 0.31 percent.

Sun Life Financial Inc. (SLF.TO) added 0.33 percent after agreeing to acquire Bentall Kennedy for $560 million.

The Capped Health Care Index added 0.47 percent as Valeant Pharmaceuticals International (VRX.TO) fell 0.82 percent, Extendicare Inc. (EXE.TO) shed 1.26 percent, and Concordia Healthcare Corp. (CXR.TO) moved up 0.33 percent.

The Capped Industrials Index dropped 0.44 percent, as Bombardier Inc. (BBD-A.TO) plunged 6.49 percent and Finning International Inc. (FTT.TO) shed 2.17 percent.

Air Canada (AC.TO) advanced 1.97 percent.

The Information Technology Index slipped 0.20 percent, as Sierra Wireless, Inc. (SW.TO) dropped 3.14 percent and Descartes Systems Group Inc. (DSG.TO) gaining 3.00 percent. BlackBerry Inc. (BB.TO) shed 1.38 percent.

Constellation Software Inc. (CSU.TO) added 0.20 percent, while Avigilon Corp. (AVO.TO) gained 0.69 percent. CAE Inc. (CAE.TO) gathered 0.20 percent.

The Capped Telecommunication Index inched up 0.01 percent, as Rogers Communications Inc. (RCI.B.TO) slipped 0.45 percent and BCE Inc. (BCE.TO) fell 0.19 percent. Manitoba Telecom Services Inc. (MBT.TO) gained 0.29 percent.

TELUS Corp. (T.TO) dipped 0.02 percent after announcing intentions to purchase and cancel up to 1,733,000 of its common shares through private agreements.

Yellow Pages (Y.TO) advanced 1.50 percent, after agreeing to acquire the ComFree/DuProprio Network.

On the economic front, a Commerce Department report on Tuesday showed housing starts pulled back more than expected in May, after reporting a sharp jump in new residential construction in the U.S. in the previous month.

Housing starts tumbled 11.1 percent to an annual rate of 1.036 million in May after surging 22.1 percent to a revised 1.165 million in April. Economists expected starts to drop to an annual rate of 1.090 million from the 1.135 million originally reported for the previous month.

Meanwhile, the report also said building permits, an indicator of future housing demand, jumped 11.8 percent to an annual rate of 1.275 million in May from the revised April rate of 1.140 million. Economists expected permits to drop to a rate of 1.105 million.

Eurozone employment increased slightly in the first quarter, Eurostat reported Tuesday. Employment rose 0.1 percent from the prior quarter, the same rate of growth as seen in the fourth quarter.

Germany's investor sentiment weakened for a third straight month in June to its lowest level in seven months as fears of a 'Grexit' intensified. The ZEW Indicator of Economic Sentiment fell more-than-expected to 31.5 from 41.9 in May, survey data from the Mannheim-based Centre for European Economic Research, or ZEW, showed Tuesday.

Economists had expected a reading of 37.3. The latest score was the lowest since November, when the reading was 11.5.

Germany's consumer prices increased for the fourth straight month in May at the fastest pace in seven months, as initially estimated, final data from the statistical office Destatis showed Tuesday. Consumer prices rose 0.7 percent from last year, following a 0.5 percent increase in April. The annual increase matched the preliminary estimate published on June 1.

The decline in U.K. consumer prices proved to be short-lived as they increased in May, while factory gate prices continued its downward trend, official data revealed Tuesday. Consumer prices rose 0.1 percent from last year as expected by economists, offsetting April's 0.1 percent fall, which was the first drop since 1960, the Office for National Statistics reported. This was the first rise in four months.

Another report from ONS showed U.K. factory gate prices decreased for the eleventh consecutive month in May mainly driven by petroleum and crude oil prices. Output prices dropped 1.6 percent from a year ago, in line with forecast, and slower than a 1.7 percent decrease in April. As expected, output prices edged up 0.1 percent for the third straight month on a monthly basis in May.