TSX Ends Higher On Global Cues - Canadian Commentary

(RTTNews) - Canadian stocks ended higher Thursday, tracking rising global equity markets on some encouraging economic growth data from the U.S. The recovery comes a day after the Federal Reserve decided to slash its monthly bond-buying program by a further $10 billion as expected. Investors largely shrugged off a private sector survey that showed some weak manufacturing activity data from China, even as claims for unemployment benefits in the U.S. increased.

Elsewhere, most Asian markets ended lower overnight on the Federal Reserve move, while most American and European markets ended higher.

In economic news, a Commerce Department report showed gross domestic product in the U.S. increased by 3.2 percent in the fourth quarter compared to the 4.1 percent growth seen in the third quarter. The growth was in line with the expectations of most economists.

Meanwhile, an index monitoring manufacturing activity in China reflected contraction in January, the latest PMI from HSBC and Markit Economics revealed Thursday. The contraction was the first since July, due primarily to weakness in output and new business.

On Wednesday, the Federal Reserve slashed its monthly bond buying program by a further $10 billion to $65 billion. The Fed said since its last meeting in December, growth in economic activity picked up in recent quarters, although labor market indicators were mixed but on balance showed further improvement.

The S&P/TSX Composite Index closed Thursday at 13,735.28, up 92.06 points or 0.67 percent. The index scaled an intraday high of 13,750.26 and a low of 13,634.13.

The Global Gold Index dropped 2.42 percent, with gold futures for April delivery, the most actively traded contract, shedding $19.70 or 1.6 percent to close at $1,242.50 an ounce Thursday on the Nymex.

Among gold stocks, Goldcorp Inc. (G.TO) shed 2.57 percent, while Barrick Gold Corp. (ABX.TO) dropped 1.74 percent. Yamana Gold Inc. (YRI.TO) shed 0.93 percent, while Kinross Gold Corp. (K.TO) surrendered 1.53 percent.

The Capped Materials Index dropped 1.23 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 1.94 percent. The fertilizer giant reported a fourth-quarter profit of $230 million or $0.26 per share, but lower than $421 million or $0.48 per share in the year-ago quarter. Analysts expected the company to earn $0.33 per share for the quarter.

Crude oil ended higher on some upbeat GDP growth data from the U.S., even as the dollar strengthened against a basket of major currencies.

The Energy Index gained 0.47 percent, with U.S. crude oil futures for March delivery, the most actively traded contract, gaining $0.87 or 0.9 percent to close at $98.23 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) moved up 0.11 percent, while Suncor Energy Inc. (SU.TO) edged up 0.16 percent. Talisman Energy Inc. (TLM.TO) surrendered 0.08 percent, while Encana Corp. (ECA.TO) gained 0.05 percent.

Imperial Oil Ltd. (IMO.TO) shed 0.59 percent after reporting lower fourth-quarter net income of C$1.06 billion or C$1.24 per share, compared to C$1.08 billion or C$1.26 per share in the previous year.

The Information Technology Index gained 1.06 percent, with smartphone maker BlackBerry Limited (BB.TO) slipping 1.62 percent.

The Diversified Metals & Mining Index slipped 1.02 percent, with Teck Resources Limited (TCK.B.TO) dropping 1.91 percent, Lundin Mining Corp. (LUN.TO) down 0.61 percent, and First Quantum Minerals (FM.TO) down 0.20 percent.

The heavyweight Financial Index ended flat with Royal Bank of Canada (RY.TO) up 1.38 percent and the Bank of Nova Scotia (BNS.TO) up 0.72 percent. Bank of Montreal (BMO.TO) dropped 1.20 percent, Toronto-Dominion Bank (TD.TO) added 0.76 percent, and Manulife Financial Corporation (MFC.TO) up 1.80 percent.

The Capped Industrials Index moved up 1.84 percent, with Bombardier Inc. (BBD.B.TO) up 1.52 percent and Air Canada (AC.B.TO) jumping 6.42 percent.

Wood- based panels producer Norbord Inc. (NBD.TO) jumped 4.64 percent after its earnings for the year increased to $149 million from $71 million in the prior year. Earnings per share advanced to $2.79 from $1.56. The Board of Directors declared a quarterly dividend of C$0.60 per common share.

In economic news from the U.S., the Labor Department said initial jobless claims climbed to 348,000, an increase of 19,000 from the previous week's revised figure of 329,000. Economists had expected jobless claims to edge up to 330,000 from the 326,000 originally reported for the previous week.

Separately, the U.S. Commerce Department said gross domestic product increased by 3.2 percent in the fourth quarter compared to the 4.1 percent growth seen in the third quarter. The GDP growth came in line with the expectations of most economists.

A report from the National Association of Realtors on Thursday showed a sharp drop in pending home sales in December with severe winter weather inhibiting home shopping across much of the U.S. The pending home sales index tumbled 8.7 percent to 92.4 in December after dipping 0.3 percent to a downwardly revised 101.2 in November. Economists expected the index to edge down by 0.5 percent. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Manufacturing activity in China contracted in January with a seasonally adjusted score of 49.5, the latest PMI from HSBC and Markit Economics revealed Thursday. This is worse than the flash estimate from earlier this month that indicated a score of 49.6. It was down sharply from 50.5 in December. A score above 50 signals expansion in a sector, while a score below 50 means contraction.

From the eurozone, German unemployment declined for the second straight month in January, data published by the Federal Labor Agency showed. Unemployment declined by 28,000 in January, which was bigger than the expected decrease of 5,000.

Eurozone economic confidence rose for the ninth consecutive month in January, data from the European Commission showed. The economic sentiment index climbed to 100.9 in January from 100.4 in the prior month. But the reading is marginally below the expected level of 101.