TSX Ends Higher As Commodity Prices Rise -- Canadian Commentary

(RTTNews) - Canadian stocks rallied to end higher on Friday, even as most global equity markets tracked lower, as commodity prices rebounded with oil surging over eight percent just before the official close notwithstanding some soft economic activity data from the U.S.

Investors digested some disappointing economic activity in Canada with its gross domestic product in November declining and the U.S. economic activity in the fourth quarter growing less than expected.

U.S. markets ended in the red with major averages ending the session near their worst levels of the day. Almost all European and Asian markets also ended in negative territory.

Economic activity in the U.S. continued to increase in the final three months of 2014, a Commerce Department report showed Friday, although the pace of growth slowed more than economists' expectations.

U.S. gross domestic product climbed 2.6 percent in the fourth quarter following the 5.0 percent jump in the third quarter. Economists anticipated GDP to increase by a somewhat more substantial 3.2 percent during the quarter.

Trade was a big drag in the fourth quarter, reflecting a notable deceleration in export growth and an upturn in imports, with additional concerns on the impact of global economic weakness.

Meanwhile, Canadian economic growth turned negative in November, due to declines in manufacturing, mining, and oil and gas extraction. Data from Statistics Canada showed that GDP fell by 0.2 percent in November, following a 0.3 percent advance a month earlier. The growth was expected to be flat on month.

Annually, the economy grew 1.9 percent, less than the 2.1 percent rise expected by the economists. The GDP growth was 2.3 percent in October. The annual rate was the slowest since March 2014.

The benchmark S&P/TSX Composite Index closed Friday at 14,673.48, up 36.20 points or 0.25 percent. The index scaled an intraday high of 14,812.52 and a low of 14,514.60.

On Thursday, the index closed up 33.08 points or 0.23 percent, at 14,635.96. The index scaled an intraday high of 14,672.58 and a low of 14,392.55.

Crude oil soared toward the close to end over eight percent higher on Friday, with bargain hunters making the most of it on renewed fighting in Iraq signaling possibilities of disruption in crude shipments from the area and on news reports of a sharp decline in U.S. rig counts in response to the supply glut situation.

The Energy Index inched up 0.07 percent, with U.S. crude oil futures for March delivery, surging $3.71 or 8.3 percent to settle at $48.24 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) gained 1.72 percent, Legacy Oil + Gas Inc. (LEG.TO) jumped 6.94 percent, Athabasca Oil Corp. (ATH.TO) surged 8.14 percent, Canadian Natural Resources Limited (CNQ.TO) gathered 5.35 percent, and Suncor Energy Inc. (SU.TO) added 4.01 percent.

Encana Corp. (ECA.TO) gained 2.51 percent, while Cenovus Energy Inc. (CVE.TO) jumped 5.89 percent. Crescent Point Energy (CPG.TO) gathered 4.75 percent.

Canadian Oil Sands (COS.TO) soared 14.68 percent after reporting fourth-quarter net income of C$0.05 per share, down from C$0.40 per share last year. The company will also reduce its quarterly dividend to $0.05 per share for the first quarter of 2015.

The Diversified Metals & Mining Index jumped 4.21 percent, as First Quantum Minerals Ltd. (FM.TO) gained 3.13 percent and Lundin Mining Corp. (LUN.TO) surged 5.61 percent. Finning International Inc. (FTT.TO) slipped 0.10 percent, while Teck Resources Limited (TCK.B.TO) gained 4.51 percent.

HudBay Minerals (HBM.TO) soared 15.43 percent.

Gold futures surged to end higher with investors seeking the safe haven of the precious metal on some disappointing economic activity data from the U.S.

The Global Gold Index jumped 4.07 percent, with gold for April delivery adding $23.90 or 1.9 percent, to settle at $1,278.50 percent on the New York Mercantile Exchange Friday.

Among other gold stocks, Yamana Gold Inc. (YRI.TO) gained 3.34 percent, Kinross Gold Corp. (K.TO) added 3.61 percent, and Barrick Gold Corp .(ABX.TO) advanced 4.91 percent.

Goldcorp Inc. (G.TO) added 4.10 percent, IAMGOLD (IMG.TO) added 2.41 percent, and Franco-Nevada Corp. (FNV.TO) jumped 6.34 percent. Eldorado Gold Corp. (ELD.TO) plummeted 13.11 percent.

The Capped Materials Index gained 2.97 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) moving up 1.72 percent and Agrium Inc. (AGU.TO) added 1.90 percent.

The heavyweight Financial Index plunged 2.23 percent, as Bank of Montreal (BMO.TO) plunged 4.22 percent, National Bank of Canada (NA.TO) dropped 2.94 percent, Royal Bank of Canada (RY.TO) fell 3.20 percent, Toronto-Dominion Bank (TD.TO) surrendered 2.01 percent, and Bank of Nova Scotia (BNS.TO) dived 2.27 percent.

Canadian Imperial Bank of Commerce (CM.TO) declined 3.49 percent, after the Wall Street Journal reported the bank is cutting over 500 jobs.

The Capped Industrials Index dropped 1.04 percent, as Bombardier Inc. (BBD.B.TO) fell 1.02 percent and Air Canada (AC.TO) declined 2.81 percent.

The Information Technology Index added 0.89 percent, as BlackBerry Limited (BB.TO) ended flat at C$12.91 a share, Constellation Software (CSU.TO) up 1.61 percent, and Descartes Systems Group Inc. (DSG.TO) added 1.36 percent. Sierra Wireless, Inc. (SW.TO) fell 4.41 percent.

The Healthcare Index fell 0.46 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) dipped 0.23 percent. The company has been selected as the lead bidder to acquire Dendreon and its immunotherapy treatment PROVENGE.

Among other healthcare stocks, Catamaran Corp. (CCT.TO) dropped 0.89 percent and Extendicare Inc. (EXE.TO) shed 0.29 percent.

Nuvo Research (NRI.TO) tanked 49.78 percent, after announcing results from its Phase 2 clinical trial of WF10, for the treatment of allergic rhinitis. The placebo arm demonstrated a reduction in Total Nasal Symptom Score over the course of the observation period that was significantly greater than demonstrated in the placebo arm of the Company's 2010 Phase 2 proof-of-concept study.

The Capped Telecommunication Index slipped 0.18 percent, as Manitoba Telecom Services Inc. (MBT.TO) fell 0.62 percent, and TELUS Corp. (T.TO) shed 0.91 percent. Rogers Communications Inc. (RCI.B.TO) gained 0.71 percent.

In economic news, a Commerce Department report showed U.S. gross domestic product to have climbed 2.6 percent in the fourth quarter following the 5.0 percent jump seen in the third quarter. Economists anticipated GDP to increase by a somewhat more substantial 3.2 percent during the quarter.

Chicago-area business activity unexpectedly grew at a faster pace in January, a report from MNI Indicators said Friday. The Chicago business barometer rebounding following two consecutive monthly declines to 59.4 in January from a revised 58.8 in December. Economists expected the index to drop to a reading of 57.7.

A University of Michigan report showed a modest downward revision to its reading on U.S. consumer sentiment for January, with the index remaining at an eleven-year high. The index for January was downwardly revised to 98.1 from the mid-month reading of 98.2, but well above the final December reading of 93.6 and is at its best level since reaching 103.8 in January 2004.

The survey's gauge of consumer expectations in January was downwardly revised to 91.0 from 91.6 but remained well above the 86.4 recorded for December. Meanwhile, the reading on current economic conditions in January was upwardly revised to 109.3 from 108.3 and is well above 104.8 in the previous month.

Elsewhere, the euro area jobless rate fell unexpectedly to the lowest level since August 2012, yet remains elevated. The unemployment rate came in at a double-digit 11.4 percent in December, slightly down from 11.5 percent in November. It was expected to remain unchanged at 11.5 percent in December.

Meanwhile, eurozone consumer prices declined for the second straight month in January due largely to lower energy prices, posting the biggest annual fall since 2009. The harmonized index of consumer prices in the 19-nation currency bloc fell 0.6 percent year-on-year in January, with a similar rate of decline last seen only in July 2009. Final data is due on February 24. This was the second consecutive fall in prices and exceeded the 0.5 percent drop forecast by economists. Prices were down 0.2 percent in December, which was the first decline since October 2009.

The leading index for eurozone, which measures future economic activity, increased for the second straight month in December, a Conference Board report showed. The Conference Board's leading economic index rose 0.2 percent in December, the same increase seen in the previous month. In October, the index dropped 0.1 percent.

Germany's retail sales rose at a slower than expected rate in December, preliminary data from Destatis showed Friday. Sales grew a calendar and seasonally-adjusted 0.1 percent month-on-month in December following the 0.5 percent gain in November. Economists had expected sales to increase 0.3 percent.

French consumer spending grew at its fastest pace in nearly three years during December, led by a marked rebound in energy consumption, figures from the statistical office INSEE revealed Friday. Household consumption rose 1.5 percent from November, when it grew 0.2 percent, revised down from 0.4 percent. Economists had forecast only 0.5 percent growth for the month. The latest consumption growth was the biggest since February 2012, when it was 2.4 percent.

An index measuring consumer confidence in the United Kingdom increased more than expected. The latest survey from polling company GfK showed consumer confidence index at 1 in January, turning positive unexpectedly as economists forecast the index to come in at -2. This follows the nine-month low score of -4 in December.

China's fiscal revenue grew at the slowest pace since 1991, data from the Ministry of Finance showed Friday. Revenue increased 8.6 percent to CNY 14.03 trillion in 2014 compared to a 10.2 percent rise in 2013. Land sales revenue gained only 3.2 percent due to the slowdown in property market activity. At the same time, fiscal expenditure rose at a slower pace of 8.2 percent to CNY 15.16 trillion. As a result, the fiscal deficit came in at CNY 1.13 trillion in 2014.