TSX Ends Higher On Upbeat U.S. Data -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end higher on Thursday, having plunged 2.4 percent, tracking rising global equity markets after some robust economic data from the U.S. showed retail sales in November to have increased more than expected. The index was weighed down by declining energy and materials stocks, somewhat offset by gains in information technology and telecom sector.

The mostly upbeat economic data from the U.S. had investors turning to the riskier equity assets, as first-time claims for U.S. unemployment benefits edged lower in the week ended December 6.

Meanwhile, U.S. retail sales rose more than expected in November, generating some optimism about overall economic growth. Retail sales data is used as a metric to measure consumer spending and which accounts for about 7o percent of the economy. Any uptick in retail sales is indicative of economic growth, and conversely, any weakness is suggestive of sluggishness in the economy.

Business inventories in the U.S. also edged higher in October, while U.S. import prices in November declined sharply with fuel prices showing another substantial drop.

Some subdued demand for longer-term loans at the European Central Bank's second offering this month has boosted the case for a full-blown quantitative easing to meet its goal of boosting the balance sheet by EUR 1 trillion and to avert the threat of deflation in the euro area.

The benchmark S&P/TSX Composite Index closed Thursday at 13,805.12, up 52.17 points or 0.38 percent. The index scaled an intraday high of 14,083.74 and a low of 13,827.43.

On Wednesday, the index plunged 342.78 points or 2.41 percent to end at 13,852.95, after declining to a low of 13,779.54 -- the lowest level since February 2014. Crude oil ended at a fresh 5-year low on demand growth and oversupply concerns with the dollar strengthening after some robust economic data out of the U.S.

The Energy Index shed 0.31 percent, with U.S. crude oil futures for January delivery plunging $0.99 or 1.6 percent to close at $59.95 a barrel a barrel on the Nymex Thursday.

The Energy Information Administration on Wednesday said U.S. crude oil inventories increased by a more than expected 1.5 million barrels last week, while gasoline stocks jumped by 8.2 million barrels.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) gained 1.18 percent, Pacific Rubiales Energy Corp. (PRE.TO) fell 1.98 percent, Suncor Energy Inc. (SU.TO) added 0.46 percent, and Encana Corp. (ECA.TO) shed 1.09 percent.

Cenovus Energy Inc. (CVE.TO) dropped 0.30 percent after indicating that it is planning capital investment of between $2.5 billion and $2.7 billion in 2015, with total cash flow projected between $2.6 billion and $2.9 billion.

Imperial Oil Limited (IMO.TO) slipped 0.81 percent, Crescent Point Energy Corp. (CPG.TO) dipped 1.02percent. Talisman Energy Inc. (TLM.TO) fell 2.52 percent, while Enbridge Inc. (ENB.TO) added 0.47 percent.

Gold futures ended lower as the dollar strengthened on a slew of upbeat economic data from the U.S., led by a better than expected unemployment benefit claims report and a better than anticipated retail sales growth.

The Global Gold Index fell 1.28 percent, with gold for February delivery dropping $3.80 or 0.3 percent to settle at $1,225.60 an ounce on the New York Mercantile Exchange Thursday.

In the gold space, Barrick Gold Corp. (ABX.TO) fell 0.44 percent, Agnico Eagle Mines Limited (AEM.TO) dropped 0.84 percent, Goldcorp Inc. (G.TO) fell 1.85 percent, Eldorado Gold Corp. (ELD.TO) declined 3.89 percent, and Franco-Nevada Corp. (FNV.TO) surrendered 2.54 percent.

Yamana Gold Inc. (YRI.TO) shed 2.30 percent, even as the miner indicated the creation of new company comprising smaller mines in Brazil.

The Capped Materials Index fell 1.08 percent, mostly on declining gold stocks, even as Potash Corp. of Saskatchewan Inc. (POT.TO) remained flat at $40.42 a share, having gained 1.79 percent yesterday.

The heavyweight Financial Index gained 0.23 percent, with Bank of Nova Scotia (BNS.TO) adding 0.33 percent, National Bank of Canada (NA.TO) up 1.12 percent, and Toronto-Dominion Bank (TD.TO) moving up 0.08 percent. Royal Bank of Canada (RY.TO) fell 0.15 percent, while Bank of Montreal (BMO.TO) advanced 0.71 percent.

Canadian Imperial Bank of Commerce (CM.TO) shares fell 0.25 percent. The bank is considering a bid for Frank Russell Co.'s asset-management arm, according to reports.

Laurentian Bank of Canada (LB.TO) shares gained 1.20 percent after reporting adjusted net income of $42.6 million or $1.39 per share in the fourth quarter, compared with $38.5 million or $1.26 per share in the year-ago period.

The Healthcare Index added 0.67 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 1.08 percent and Catamaran Corp. (CCT.TO) advanced 1.16 percent.

The Diversified Metals & Mining Index shed 1.57 percent, as Teck Resources Limited (TCK.B.TO) plunged 9.30 percent, First Quantum Minerals Ltd. (FM.TO) fell 0.35 percent, Lundin Mining Corp. (LUN.TO) edged down 0.38 percent, and Sherritt International Corp. (S.TO) added 45 percent.

The Capped Industrials Index moved up 0.65 percent, as Bombardier Inc. (BBD.B.TO) gained 2.53 percent, Canadian National Railway Company (CNR.TO) added 0.79 percent, and SNC-Lavalin Group Inc. (SNC.TO) moved up 0.77 percent.

Air Canada (AC.TO) gained 0.86 percent, while WestJet Airlines Ltd. (WJA) gathered 1.75 percent.

The Information Technology Index gathered 1.14 percent with BlackBerry Ltd. (BB.TO) up 0.95 percent, Descartes Systems Group Inc. (DSG.TO) up 1.28 percent and Avigilon Corp. (AVO.TO) gaining 0.41 percent.

The Capped Telecommunication Index moved up 2.27 percent, as BCE Inc. (BCE.TO) gained 1.42 percent, Rogers Communications Inc. (RCI.B.TO) added 2.41 percent, and TELUS Corp. (T.TO) jumped 3.92 percent.

Transat A.T. Inc. (TRZ.B.TO) fell 0.87 percent after reporting a fourth-quarter profit of $30.6 million, down 44 percent from a year earlier.

In economic news from the U.S., a report from the U.S. Labor Department showed jobless claims to have declined to 294,000 in the week ended December 6, down 3,000 from the previous week's unrevised figure of 297,000. Economists had expected claims to slip to 295,000.

Meanwhile, a report from the Commerce Department showed U.S. retail sales to have climbed by a more than expected 0.7 percent in November, following an upwardly revised 0.5 percent increase in October. Economists had forecast a 0.4 percent increase in retail sales.

Business inventories in the U.S. inched up by 0.2 percent in October, after rising 0.3 percent in September. This was in line with economists' expectations. Business sales edged down by 0.1 percent in October after coming in unchanged in September.

U.S. import prices in November dropped sharply with fuel prices falling significantly, a Labor Department report showed. Import prices tumbled 1.5 percent in November after slumping by a revised 1.2 percent in October. Economists expected import prices to fall by about 1.7 percent compared to the 1.3 percent drop originally reported for the previous month.

In economic news from the eurozone, the European Central Bank's second offering of its targeted longer term refinancing operation saw demand for loans by banks remaining weak. However, with EUR 129.84 billion of the EUR 317 billion offering getting allotted to 306 banks, the take-up was better than what was seen in the previous round in September.