TSX Ends Higher As Commodities Rise - Canadian Commentary

(RTTNews) - Canadian stocks made gains for a fourth straight session to end at a 2-1/2-year high Friday, driven mostly by higher commodity prices. The uptick was led by materials and financial stocks, after some mixed economic data from the U.S. with industrial production for December rising in line with estimates. However, the gains were capped by some weak U.S. consumer sentiment and housing starts data.

Economic data from the U.S. showed December industrial production in the U.S. to have increased in line with estimates, with improvement in manufacturing and mining production, offsetting a pullback in utilities output.

Nonetheless, consumer sentiment in the U.S. unexpectedly deteriorated in January, reflecting lower expectations among lower and middle-income families, a report from Thomson Reuters and the University of Michigan said Friday. As well, housing starts in the U.S. pulled back in December, after reporting a substantial increase in new residential construction in the previous month, according to a Commerce Department report. The drop is attributed to the surge in housing starts in the previous month and the winter storms in December.

The S&P/TSX Composite Index closed Friday at 13,888.21, up 56.63 points or 0.41 percent. The index scaled an intraday high of 13,910.38 and a low of 13,829.16.

Crude oil ended higher driven mostly by the more-than-expected slump in U.S. stockpiles earlier this week and on some mixed economic data from the U.S. with industrial production increasing in line with estimates.

The Energy Index gathered 0.13 percent, with U.S. crude oil futures for February delivery, the most actively traded contract, gaining $0.41 or 0.4 percent to close at $94.37 a barrel Friday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) slipped 0.47 percent, while Suncor Energy Inc. (SU.TO) dropped 0.43percent. Talisman Energy Inc. (TLM.TO) gained 1.62 percent, while Encana Corp. (ECA.TO) added 0.67 percent. Pacific Rubiales Energy Corp. (PRE.TO) shed 1.91 percent.

The Information Technology Index added 1.37 percent, with smartphone maker BlackBerry Limited (BB.TO) surging 6.51 percent.

The Diversified Metals & Mining Index dropped 0.43 percent, with Teck Resources Limited (TCK.B.TO) up 0.53 percent and First Quantum Minerals Ltd. (FM.TO) down 0.39 percent. Lundin Mining Corp. (LUN.TO) lost 1.18 percent.

The Capped Materials Index gained 1.66 percent, with fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) slipping 1.55 percent.

Gold futures settled higher on some soft data with U.S. consumer sentiment in January dropping unexpectedly and housing starts pulling back in December.

The Global Gold Index added 3.89 percent, with gold futures for February delivery, the most actively traded contract, gaining $11.70 or 0.9 percent to close at $1,251.90 an ounce Friday on the Nymex.

Among gold stocks, Goldcorp Inc. (G.TO) jumped 4.31 percent, while Barrick Gold Corp. (ABX.TO) added 3.46 percent. Yamana Gold Inc. (YRI.TO) moved up 3.54 percent, while Kinross Gold Corp. (K.TO) jumped 5.66 percent.

The Financial Index moved up 0.31 percent with Bank of Montreal (BMO.TO) up 0.54 percent and Royal Bank of Canada (RY.TO) up 0.70 percent. The Bank of Nova Scotia (BNS.TO) gathered 0.39 percent, while Toronto-Dominion Bank (TD.TO) moved up 0.31 percent.

The Capped Industrials Index shed 0.30 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) dropping 1.44 percent.

In economic news, a report from Thomson Reuters and the University of Michigan on Friday showed U.S. consumer sentiment index to have dropped to 80.4 in January from 82.5 in December. Economists expected the index to climb to 83.5. The decrease was attributed to lowered expectations among lower- and middle-income families.

U.S. housing starts in December fell 9.8 percent to an annual rate of 999,000 in December after jumping 23.1 percent to the revised November estimate of 1.107 million, a Commerce Department report showed Friday. Economists expected housing starts to drop to an annual rate of 985,000 from the 1.091 million originally reported for the previous month, reflecting a 9.7 percent decrease.

Meanwhile, building permits fell 3.0 percent to an annual rate of 986,000 in December from the revised November rate of 1.017 million. Building permits, an indicator of future housing demand, had been expected to show a more modest 1.015 million decrease.

A Federal Reserve report on Friday showed Industrial production in the U.S. to have increased 0.3 percent in December after jumping by a revised 1.0 percent in November. The increase was in line with economists' estimates, while the previous month's growth was downwardly revised from 1.1 percent.