TSX Ends Lower As Gold Stocks Weigh -- Canadian Commentary

(RTTNews) - Canadian stocks dropped from a four-month high to end lower on Friday, tracking declining global equity markets with mining stocks under pressure after gold prices continued to fall.

The decline comes on the heels of some better-than-expected U.S. jobs report that strengthened the case for a U.S. interest rate hike by mid-year.

The continued rebound in the price of oil following Wednesday's sharp sell-off has provided a boost to energy stocks, while financial stocks continue to provide support.

Meanwhile, Canadian Labor market added 35,400 jobs in January, according to Statistics Canada, with results surpassing the economists expectations.

Markets in Europe ended in the red as concerns over the situation in Greece persisted. Greek Prime Minister Alexis Tsipras pledged to "put an end once and for all" to the EU's austerity policies, despite pressure from European leaders. German industrial production data also came in weaker than anticipated.

Markets in the United States also ended in negative territory following the larger than expected increase in job growth for January. Employment in the U.S. increased by more than anticipated in January, a report from the Labor Department showed Friday, although the report revealed an unexpected uptick in the unemployment rate.

The unemployment rate had been expected to remain unchanged from the previous month, when it was at its lowest level since a matching rate in June of 2008. The unexpected uptick by the unemployment rate reflected a substantial increase by the size of the labor force, which surged up by 1.05 million people.

The benchmark S&P/TSX Composite Index closed Friday at 15,083.92, down 41.00 points or 0.27 percent. The index scaled an intraday high of 15,204.45 and a low of 15,025.64.

On Thursday, the index closed up 129.27 points or 0.86 percent, at 15,124.92. The index scaled an intraday high of 15,172.32 and a low of 15,031.11.

Crude oil jumped after some better-than-expected U.S. jobs report strengthened the case for a U.S. interest rate hike by mid-year, despite the dollar spiking significantly.

Nevertheless, markets continue to remain oversupplied as demand continues to dwindle due to economic weakness in Europe and Asia.

Massive layoffs in the U.S. energy sector have raised speculation that OPEC is winning its price war with non-OPEC suppliers who are trimming costs and abandoning projects.

The Energy Index gained 0.72 percent with U.S. crude oil futures for March delivery, jumping $1.21 or 2.4 percent to settle at $51.69 percent a barrel on the New York Mercantile Exchange Friday.

Crude prices dropped after a report from U.S. company Baker Hughes showed rig counts for January to have declined.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) shed 0.21 percent, Canadian Oil Sands (COS.TO) added 2.75 percent, and Encana Corp. (ECA.TO) inched up 0.06 percent.

Canadian Natural Resources Limited (CNQ.TO) added 0.62 percent, while Cenovus Energy Inc. (CVE.TO) gained 0.75 percent. Crescent Point Energy (CPG.TO) gathered 1.23 percent, and Suncor Energy (SU.TO) added 0.49 percent.

The Diversified Metals & Mining Index surrendered 1.27 percent, as First Quantum Minerals Ltd. (FM.TO) gained 0.54 percent, Teck Resources Limited (TCK.B.TO) dropped 2.64 percent, and HudBay Minerals (HBM.TO) fell 2.44 percent. Finning International Inc. (FTT.TO) moved up 0.71 percent.

Gold futures ended ended sharply lower after some better-than-expected U.S. jobs report and seem to be paving the way for a U.S. interest rate hike by mid-year.

The Global Gold Index dived 4.82 percent, with gold for April delivery shedding $28.10 or 2.2 percent to settle at $1,234.60 percent on the New York Mercantile Exchange Friday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) plunged 6.63 percent, Goldcorp Inc. (G.TO) shed 6.01 percent, Kinross Gold Corp. (K.TO) surrendered 5.14 percent, and Barrick Gold Corp .(ABX.TO) dropped 4.93 percent.

The Capped Materials Index lost 2.70 percent, mostly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) ending flat at $46.05 a share and Agrium Inc. (AGU.TO) shedding 0.68 percent.

The heavyweight Financial Index gained 1.03 percent, after all the six major banks ended in positive territory. Bank of Montreal (BMO.TO) added 1.14 percent, National Bank of Canada (NA.TO) advanced 1.77 percent, Royal Bank of Canada (RY.TO) moved up 0.84 percent, and Toronto-Dominion Bank (TD.TO) climbed 1.06 percent.

Bank of Nova Scotia (BNS.TO) added 0.88 percent, while Canadian Imperial Bank of Commerce (CM.TO) gathered 0.71 percent.

The Capped Industrials Index advanced 0.34 percent, as Air Canada (AC.TO) fell 1.52 percent and Bombardier Inc. (BBD.B.TO) dropped 0.68 percent. Canadian National Railway Company (CNR.TO) added 0.03 percent, and Canadian Pacific Railway Limited (CP.TO) moved up 0.81 percent.

The Information Technology Index inched up 0.06 percent, as BlackBerry Limited (BB.TO) ended flat, Constellation Software (CSU.TO) gained 0.21 percent, and Descartes Systems Group Inc. (DSG.TO) up 0.26 percent.

Sierra Wireless, Inc. (SW.TO) plummeted 11.87 percent after reporting fourth quarter non-GAAP EPS of $0.29, compared to $0.10 per share in the prior year.

The Healthcare Index added 0.39 percent, even as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 1.24 percent and Catamaran Corp. (CCT.TO) gathered 0.23 percent. Extendicare Inc. (EXE.TO) dropped 0.58 percent.

The Capped Telecommunication Index dropped 1.72percent, with Canada's biggest telecom company BCE diving 4.82 percent and Manitoba Telecom Services Inc. (MBT.TO) down 0.51 percent.

CAE Inc. (CAE.TO) dropped 4.06 percent, after having reported third quarter net income from continuing operations of C$0.20 per share, compared to C$0.17 per share last year.

Domtar Corp. (UFS.TO) surged 7.18 percent, after reporting preliminary fourth quarter adjusted EPS of $1.41, compared to $1.05 in the previous year.

Toromont Industries Limited (TIH.TO) gained 4.40 percent after reporting fourth quarter EPS of $0.59, up from $0.45 a year ago. The company also raised its quarterly dividend by 13 percent.

On the economic front, the Canadian Labor market added 35,400 jobs in January, according to a report released Friday morning by Statistics Canada. The result surpassed the expectations of economists, who had expected a gain of only 5,000 jobs.

However, the Canadian economy lost 11,800 full-time positions in January, which was offset by a gain of 47,200 part-time jobs.

The Canadian unemployment rate also fell to 6.6 percent in January, from 6.7 percent in December.

Statistics Canada also reported that Canadian building permits rose by 7.7 percent in December to C$7.11 billion. Economists had expected an increase of 5.0 percent. The prior month result was also revised to show a decline of 13.6 percent.

In economic news from the U.S., employment in the U.S. increased more than anticipated in January, with the Labor Department indicating non-farm payroll employment to have risen by 257,000 jobs in January compared to economist estimates for an increase about 230,000 jobs. Nonetheless, the report also showed that the unemployment rate edged up to 5.7 percent in January from 5.6 percent in December.

The unemployment rate had been expected to remain unchanged from the previous month, when it was at its lowest level since a matching rate in June of 2008. Revised data also showed that employment in November and December jumped by 423,000 jobs and 329,000 jobs, respectively, reflecting a net upward revision of 147,000.

From the eurozone, Germany's industrial production expanded for the fourth consecutive month in December, but the growth rate weakened, defying expectations for a faster expansion, as mild weather dampened construction activity. German industrial output edged up 0.1 percent in December from a month ago, Destatis said Friday. Production was forecast to rise 0.4 percent after expanding by a revised 0.1 percent in November.

The French trade deficit increased more than expected in December due to an increase in imports, the customs office reported Friday. The trade gap widened to EUR 3.44 billion in December from EUR 3.09 billion in November. The deficit was forecast to rise to EUR 3.3 billion.

The U.K. trade deficit widened to the highest in four years in 2014 as exports declined sharply than imports, official data revealed Friday. The visible trade gap rose to GBP 10.2 billion in December from GBP 9.28 billion in November. Economists expected a GBP 9.1 billion deficit.

Standard & Poor's downgraded the long-term rating of Greece to B-minus from B, while placing the beleaguered country on CreditWatch negative. This means Greece could once again be downgraded in the near future.