TSX Ends Higher After ECB Move -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to end higher on Thursday, tracking rising global equity markets, after the European Central Bank detailed its bond-buying program. Nevertheless, some disappointing economic data from the U.S. and China lowering its growth target capped gains, even as investors focused on the upcoming monthly U.S. jobs report on Friday.

ECB President Mario Draghi said the bank will purchase $66.3 billion worth of bonds each month beginning on March 9. The central bank previously indicated that the $1.1 trillion asset purchase program is expected to continue until September of 2016.

At its monetary policy meeting, the ECB maintained its interest rates unchanged for a fifth consecutive session. The ECB also raised its forecast for European economic growth in 2015 to 1.5 percent from 1 percent.

In a somewhat troubling sign for the labor market ahead of tomorrow's monthly jobs data, a Labor Department report on Thursday showed an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended February 28. The claims rose to their highest level since the week ending May 17, 2014.

New orders for U.S. manufactured goods unexpectedly declined in January due mainly to a drop in non-durable goods orders that offset a rebound in durable goods orders, a Commerce Department report showed Thursday.

Meanwhile, China lowered its growth target for 2015 to 7 percent amid a challenging global environment and stressed the importance of reforms to build a moderately prosperous society, at its annual session of the National People's Congress in Beijing on Thursday.

All major markets in the U.S. and Europe ended in positive territory, although buying interest was somewhat subdued limiting the upside for markets.

The benchmark S&P/TSX Composite Index closed Thursday at 15,103.11, up 20.27 points or 0.13 percent. The index scaled an intraday high of 15,189.10 and a low of 15,094.84.

On Tuesday, the index closed down 51.01 points or 0.34 percent, at 15,082.84. The index scaled an intraday high of 15,135.92 and a low of 15,995.07.

The heavyweight Financial Index dipped 0.10 percent, with Bank of Nova Scotia (BNS.TO) inching up 0.02 percent, Bank of Montreal (BMO.TO) added 0.29 percent, and Royal Bank of Canada (RY.TO) up 0.12 percent.

National Bank of Canada (NA.TO) dipped 0.02 percent, while Canadian Imperial Bank of Commerce (CM.TO) dropped 0.56 percent. Toronto-Dominion Bank (TD.TO) edged down 0.06 percent.

Crude oil ended lower on a strong dollar with investors apprehensive on the oversupply situation after an official weekly oil report yesterday showed crude stockpiles to have jumped much more than expected last week.

A U.S. Energy Information Administration report showed U.S. crude oil inventories to have surged 10.3 million barrels in the week ended February 27, while analysts expected an increase of 3.7 million barrels.

The Energy Index fell 0.20 percent, with U.S. crude oil futures for April delivery, shedding $0.77 or 1.5 percent to settle at $50.76 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Canadian Oil Sands Limited (COS.TO) fell 3.43 percent, Suncor Energy Inc. (SU.TO) shed 0.75 percent, Canadian Natural Resources Limited (CNQ.TO) jumped 5.06 percent, and Encana Corp. (ECA.TO) dived 3.22 percent.

Crescent Point Energy Corp. (CPG.TO) dropped 2.26 percent, while Cenovus Energy Inc. (CVE.TO) dipped 0.18 percent.

Gold futures ended lower as the dollar strengthened against a basket of major currencies after the European Central Bank detailed its quantitative easing program, and on some soft data from the U.S.

The Gold Index added 0.77 percent, although gold for April delivery dropped $4.70 or 0.4 percent to settle at $1,196.20 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Goldcorp (G.TO) added 1.69 percent, Barrick Gold Corp. (ABX.TO) gained 0.93 percent, and Kinross Gold Corp (K.TO) moved up 2.08 percent.

IAMGOLD (IMG.TO) surrendered 1.80 percent, while Eldorado Gold (ELD.TO) dropped 1.24 percent.

The Capped Materials Index gained 0.33 percent on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 2.73 percent and Agrium Inc. (AGU.TO) dipped 0.10 percent.

The Diversified Metals & Mining Index moved up 0.50 percent, as First Quantum Minerals Ltd. (FM.TO) inching up 0.13 percent, Lundin Mining Corp. (LUN.TO) gaining 1.16 percent, and Teck Resources (TCK-B.TO) added 0.64 percent.

Sherritt International Corp. (S.TO) added 0.44 percent, HudBay Minerals Inc. (HBM.TO) shed 1.02 percent, and Finning International Inc. (FTT.TO) surrendered 2.67 percent.

The Health Care Index dropped 0.31 percent, as Extendicare Inc. (EXE.TO) shed 2.68 percent. Valeant Pharmaceuticals International, Inc. (VRX.TO) added 0.94 percent, while Catamaran Corp. (CCT.TO) gained 0.53 percent.

The Capped Industrials Index moved up 0.57 percent, with Bombardier Inc. (BBD.B.TO) adding 2.17 percent and Air Canada (AC.TO) up 0.40 percent.

The Information Technology Index gathered 0.17 percent, with BlackBerry Limited (BB.TO) gaining 1.04 percent.

Among other tech stocks, Sierra Wireless, Inc. (SW.TO) dropped 0.52 percent, Constellation Software Inc. (CSU.TO) gained 0.69 percent, and Descartes Systems Group Inc. (DSG.TO) fell 1.12 percent.

The Capped Telecommunication Index inched up 0.08 percent, with Rogers Communications Inc. (RCI.B.TO) gaining 0.32 percent, BCE up 0.02 percent and TELUS Corp. (T.TO) down 0.02 percent.

On the economic front, new orders for U.S. manufactured goods unexpectedly declined in January due mainly to a drop in non-durable goods orders that offset a rebound in durable goods orders, a report from the Commerce Department showed Thursday.

The report said factory orders edged down by 0.2 percent in January after tumbling by 3.5 percent in December. The modest drop surprised economists, who had expected orders to inch up by 0.2 percent.

U.S. labor productivity in the fourth quarter fell more than initially reported with output rising less than previously estimated, a Labor Department report said Thursday. The productivity for the fourth quarter dropped by a revised 2.2 percent compared to the previously reported 1.8 percent decrease. Economists expected productivity to fall by a revised 2.3 percent.

A Labor Department report on Thursday showed an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended February 28. Initial jobless claims edged up to 320,000, an increase of 7,000 from the previous week's unrevised level of 313,000. Economists expected claims to drop to 295,000.

The European Central Bank will commence its bond purchases under an historic $1.1 trillion quantitative easing plan next week and expects the impact from it stimulus measures to return inflation to the euro area next year.

ECB President Mario Draghi said Thursday that the bank will start purchasing public sector bonds in the secondary market on March 9, under the QE scheme announced in January. Mario Draghi said the central bank will not buy bonds with yields lower than its deposit rate of negative 0.2 percent.

Earlier in the day, the ECB left interest rates unchanged for a fifth consecutive session after its meeting in Nicosia, Cyprus.

Meanwhile, the Bank of England also kept its key rate unchanged at a historic low of 0.50 percent. The central bank has persisted with the low rate at every policy meeting since March 2009, when the rate was cut to confront recession at the peak of the financial crisis.

From Asia, China lowered its growth target for 2015 amid a challenging global environment and stressed the importance of reforms to build a moderately prosperous society, at its annual session of the National People's Congress in Beijing on Thursday. Premier Li Keqiang said the government aims to achieve about 7 percent economic growth in 2015.

In 2014, the government had targeted about 7.5 percent growth, and achieved 7.4 percent, which was the weakest expansion since 1990.