TSX Ends Lower After Disappointing GDP Data -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Tuesday, hurt mostly by a disappointing Canadian GDP report for July and a none too encouraging reading on Chinese manufacturing activity in August. The decline was led by energy and mining stocks with declining commodity prices, as crude oil fell over 3.5 percent on the NYMEX.

Data from Statistics Canada showed economic growth was stagnant in July compared to the previous month, with annual growth falling to 2.5 percent from above 3 percent in June.

Meanwhile, Canadian industrial product price index rose 0.2 percent in August, up from a revised minus 0.4 percent a month earlier.

In some soft economic news from the U.S., consumer confidence unexpectedly fell from 7-year highs in September amid concerns over the outlook for employment, even as U.S. home prices rose at an anemic pace in July.

Further, the Chicago-area manufacturing activity continued to expand in September, albeit at a slower pace than the previous month, the Institute for Supply Management - Chicago said Tuesday.

Elsewhere, the HSBC China Manufacturing PMI showed sluggish economic growth with a final reading of 50.2 in September, which is unchanged from August.

With inflation not picking up despite recent stimulus, it is now being speculated that the European Central Bank will announce further measures later this week.

Geopolitical worries amid the ongoing unrest in Hong Kong and news about the U.S. airstrikes on Islamic State militants in Syria also weighed on market sentiments.

The S&P/TSX Composite Index closed Tuesday at 14,960.51, down 16.41 points or 0.11 percent. The index scaled a intraday high of 15,047.13 and a low of 14,899.28.

On Monday, Canadian stocks ended lower driven by heavy selling in financial and mining stocks amid uncertainties over the outlook for the global economy.

Crude oil plummeted 3.6 percent to end at a two-year low on concerns of a supply glut after news reports said the Organization of the Petroleum Exporting Countries increased crude production in September, even as Libyan production reached its highest level in over a year.

The Energy Index dropped 0.82 percent, with U.S. crude oil futures for November delivery plunging $3.41 or 3.6 percent to close at $91.16 a barrel Tuesday on the Nymex.

Among energy stocks, Encana Corp. (ECA.TO) shed 1.16 percent, Cenovus Energy Inc. (CVE.TO) dipped 0.59 percent, Talisman Energy Inc. (TLM.TO) dropped 0.62 percent, and Canadian Natural Resources Limited (CNQ.TO) surrendered 1.23 percent. Suncor Energy Inc. (SU.TO) gained 0.75 percent, while Enbridge Inc. (ENB.TO) lost 0.41 percent.

The Financial Index added 0.23 percent, with Toronto-Dominion Bank (TD.TO) gathered 0.66 percent, Canadian Imperial Bank of Commerce (CM.TO) added 0.19 percent, Royal Bank of Canada (RY.TO) gained 0.64 percent, Bank of Nova Scotia (BNS.TO) added 0.13 percent, and Bank of Montreal (BMO.TO) gained 0.15 percent. Nonetheless, National Bank of Canada (NA.TO) edged down 0.06 percent.

Gold futures ended lower as the dollar strengthened against some major currencies after a slew of economic data from the U.S., amid renewed speculation the U.S. Federal Reserve will start hiking rates soon.

The Global Gold Index shed 1.36 percent, with gold for December delivery shedding $7.20 or 0.6 percent to settle at $1,211.50 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) dropped 1.67 percent, Yamana Gold Inc. (YRI.TO) shed 1.03 percent, B2Gold Corp. (BTO.TO) fell 0.44 percent, Eldorado Gold Corp. (ELD.TO) dipped 0.92 percent, and Goldcorp Inc. (G.TO) surrendered 0.81 percent.

The Capped Materials Index declined 0.98 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.31 percent.

The Diversified Metals & Mining Index fell 0.62 percent, with First Quantum Minerals Ltd. (FM.TO) down 0.46 percent, Lundin Mining Corp. (LUN.TO) down 1.07 percent, and Teck Resources Limited (TCK.B.TO) up 0.63 percent.

The Capped Industrials Index added 0.63 percent, with Bombardier Inc. (BBD.B.TO) adding 0.80 percent and SNC-Lavalin Group Inc. (SNC.TO) down 0.29 percent.

The Information Technology Index edged down 0.02 percent, with smartphone maker BlackBerry Limited (BB.TO) dropping 2.28 percent.

The Healthcare Index added 0.22 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) up 1.44 percent, Extendicare Inc. (EXE.TO) down 0.12 percent, and Catamaran Corporation (CCT.TO) down 0.84 percent.

The Telecom Index dropped 0.30 percent with Rogers Communications Inc. (RCI.B.TO) up 0.14 percent, TELUS Corp. (T.TO) up 0.13 percent, and BCE Inc. (BCE.TO) down 1.12 percent.

The Consumer Staples Index moved up 0.94 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) up 1.27 percent and Maple Leaf Foods Inc. (MFI.TO) up 0.37 percent. However, Magna International Inc. (MG.TO) dropped 3.49 percent.

Canadian Pacific Railway Ltd. (CP.TO) gained 1.68 percent after receiving approval to more than double the amount of stock it can purchase under its 2014-15 share buyback program, having reached the maximum available under the initial plan.

In economic news from the U.S., the Conference Board's Consumer Confidence Index declined to 86.0 in September, down from an upwardly revised reading of 93.4 in August, after having risen for four consecutive months. Economists expected the index to edge up to 92.5 in September, against the initial August reading of 92.4.

A report from the Institute for Supply Management - Chicago on Tuesday showed the Chicago PMI to have decreased 3.8 points to 60.5 in September, falling slightly short of expectations for a reading of 61. A reading above 50 indicates expansion.

U.S. home prices rose at an anemic pace in July, an S&P/Case-Shiller's 20-city composite index showed Tuesday. Home prices were up only 0.6 percent in July from the previous month, slower than the 1 percent rise in June. Analysts expected the index to rise by 1.1 percent on a non-seasonally adjusted basis in July.

From Europe, the U.K. economy grew more than estimated in the second quarter, the Office for National Statistics said Tuesday. Gross domestic product grew 0.9 percent sequentially, up from the prior estimate of 0.8 percent. The annual growth was confirmed at 3.2 percent. GDP was 2.7 percent higher than the pre-economic downturn peak of 2008 instead of 0.2 percent.

U.K. current account deficit increased to GBP 23.1 billion in the second quarter from a revised shortfall of GBP 20.5 billion in the first quarter. The second quarter deficit equated 5.2 percent of GDP.

Meanwhile, unemployment rate in the eurozone remained stable as expected in August, a report from Eurostat showed Tuesday. The jobless rate came in at 11.5 percent in August, the same rate as in July. This was in line with economists' expectations. In the corresponding month of the previous year, the unemployment rate was at 12 percent.

Investors also look ahead to a slew of U.S. economic data this week, including the Labor Department's monthly jobs report, due Friday.