TSX Ends Lower As Oil Plummets -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a four-day gain to end lower Wednesday, with the market under pressure due to the weakness in the energy sector as oil prices plummeted a near 9 percent on renewed concerns of oversupply.

Investors also weighed a slew of economic data including some disappointing private sector jobs report from the U.S.

Private sector employment in the U.S. rose less than expected in January, a report from payroll processor ADP showed Wednesday. The disappointing data may raise some concerns about Friday's employment report from the Labor Department, which includes both public and private sector jobs.

After reporting a notable slowdown in the pace of growth in U.S. service sector activity in the previous month, a report from the Institute for Supply Management on Wednesday showed a modest uptick to its index of activity in the sector in January.

Investors also continue to monitor the developments in Greece, with Finance Minister Yanis Varoufakis in an interview indicating that his government has started negotiations with the International Monetary Fund over a plan to lessen the burden of the country's hefty debt burden.

Markets in the United States also struggled after ending the two previous sessions sharply higher. The majority of the European markets also ended modestly lower on Wednesday, following a sharp 2-day rally.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,995.65, down 67.23 points or 0.45 percent. The index scaled an intraday high of 15,056.35 and a low of 14,939.17.

On Tuesday, the index closed up 162.30 points or 1.09 percent, at 15,062.77. The index scaled an intraday high of 15,154.92 and a low of 14,955.79.

Crude oil plummeted to settle close to a 9 percent as supply glut concerns resurfaced after an official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have surged more than expected last week.

A weekly report from the U.S. Energy Information Administration showed crude oil inventories in the U.S. to have jumped 6.3 million barrels in the week ended January 30, while analysts expected an increase of 2.8 million barrels. The report showed U.S. crude oil inventories at 413.0 million barrels end last week.

The Energy Index dropped 4.10 percent with U.S. crude oil futures for March delivery, plunging $4.60 or 8.7 percent a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) plummeted 11.45 percent, Legacy Oil + Gas Inc. (LEG.TO) plunged11.48 percent, Athabasca Oil Corp. (ATH.TO) dived 12.61 percent, Canadian Oil Sands (COS.TO) soared 20.53 percent, and Penn West Petroleum Ltd. (PWT.T)) surged 22.90 percent.

Canadian Natural Resources Limited (CNQ.TO) dived 6.94 percent, and Suncor Energy Inc. (SU.TO) lost 5.21 percent.

Encana Corp. (ECA.TO) dropped 1.25 percent, while Cenovus Energy Inc. (CVE.TO) fell 2.19 percent. Crescent Point Energy (CPG.TO) fell 4.47 percent, and Imperial Oil (IMO.TO) surrendered 2.25 percent.

The Diversified Metals & Mining Index dropped 2.67 percent, as First Quantum Minerals Ltd. (FM.TO) fell 3.20 percent and Lundin Mining Corp. (LUN.TO) shed 3.52 percent. Finning International Inc. (FTT.TO) dived 4.04 percent, while Teck Resources Limited (TCK.B.TO) lost 2.12 percent. HudBay Minerals (HBM.TO) shed 2.33 percent.

Gold futures ended higher after some disappointing economic data from the U.S. and as China's central bank cut the reserve-requirement ratio for banks in an attempt to spur economic growth.

The Global Gold Index added 2.69 percent, with gold for April delivery gaining $4.20 or 0.3 percent to settle at $1,264.50 percent on the New York Mercantile Exchange Wednesday.

Among other gold stocks, Yamana Gold Inc. (YRI.TO) jumped 7.83 percent, Kinross Gold Corp. (K.TO) gained 3.19 percent, and Barrick Gold Corp .(ABX.TO) gathered 3.31 percent.

Goldcorp Inc. (G.TO) added 2.46 percent, IAMGOLD (IMG.TO) climbed 5.66 percent, and Franco-Nevada Corp. (FNV.TO) gathered 3.78 percent. Eldorado Gold Corp. (ELD.TO) gained 2.92 percent.

The Capped Materials Index added 1.17 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) dropping 0.97 percent and Agrium Inc. (AGU.TO) down 1.04 percent.

The heavyweight Financial Index shed 0.57 percent, as Bank of Montreal (BMO.TO) fell 0.87 percent, National Bank of Canada (NA.TO) dropped 0.79 percent, Royal Bank of Canada (RY.TO) dropped 0.94 percent, and Toronto-Dominion Bank (TD.TO) fell 0.45 percent.

Bank of Nova Scotia (BNS.TO) surrendered 0.64 percent, while Canadian Imperial Bank of Commerce (CM.TO) added 2.51 percent.

The Capped Industrials Index inched up 0.01 percent, as Bombardier Inc. (BBD.B.TO) dropped 1.67 percent and Air Canada (AC.TO) jumped 4.91 percent.

The Information Technology Index added 1.39 percent, as BlackBerry Limited (BB.TO) gained 1.22 percent, Constellation Software (CSU.TO) gained 1.57 percent, and Descartes Systems Group Inc. (DSG.TO) slipped 0.68 percent. Sierra Wireless, Inc. (SW.TO) jumped 3.92 percent.

The Healthcare Index gained 0.98 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 2.09 percent, Catamaran Corp. (CCT.TO) added 1.57 percent, and Extendicare Inc. (EXE.TO) shed 0.87 percent.

ProMetric Life Sciences (PLI.TO) ended flat at $1.85 a share, after its PBI-4050 was cleared to commence clinical trials in patients with Idiopathic Pulmonary Fibrosis.

The Capped Telecommunication Index moved up 0.08 percent, as Manitoba Telecom Services Inc. (MBT.TO) dropped 3.47 percent, Rogers Communications Inc. (RCI.B.TO) added 1.03 percent, and TELUS Corp. (T.TO) up 0.86 percent.

Fairfax Financial Holdings (FFH.TO) fell 1.64 percent, after revealing an agreement with QBE Management (Ireland) Limited and its Ukrainian partner to acquire QBE's insurance operations in Ukraine.

Intact Financial (IFC.TO) dropped 0.95 percent, after reporting its fourth quarter net operating income to have surged 75 percent to $1.84 per share.

In economic news from the U.S., private sector employment in the U.S. rose less than expected in January, a report from payroll processor ADP showed Wednesday. ADP said private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December. Economists had expected employment to climb by about 223,000 jobs compared to the addition of 241,000 jobs originally reported for the previous month.

After reporting a notable slowdown in the pace of growth in U.S. service sector activity in the previous month, the Institute for Supply Management's report on Wednesday showed a modest uptick to its index of activity in the sector in January.

The ISM said its non-manufacturing index inched up to 56.7 in January from an upwardly revised 56.5 in December, with a reading above 50 indicating growth in the service sector. Economists had expected the non-manufacturing index to edge up to 56.5 from the 56.2 originally reported for the previous month.

China's service sector expansion slowed in January, figures from Markit Economics and HSBC Bank showed Wednesday. The services business activity index fell to 51.8 in January from 53.4 in December. This marked the slowest expansion rate in six months.

Eurozone retail sales grew 0.3 percent in December from the previous month, slower than November's 0.7 percent increase, Eurostat figures showed. Nonetheless, this was the third consecutive rise in sales.

The Eurozone private sector expanded at the fastest pace since July last year as output expanded in Germany, Italy and Spain. But the downturn in the French economy extended into its ninth month. The final composite output index rose to 52.6 in January from 51.4 in December. It was also above the flash reading of 52.2.

Germany's service sector activity growth accelerated at the beginning of 2015 amid rising new business, survey data from Markit Economics showed Wednesday. The final services Purchasing Managers' Index climbed to 54 in January from 52.1 in December. The flash score was 52.7.

The French service sector fell back into negative territory in January, reversing a marginal growth in the prior month, final data from Markit showed Wednesday. The services PMI fell to 49.4 from 50.6 in December. It stayed also below the flash score of 49.5.

The U.K. service sector expanded more than expected in January as new business rose at a faster pace, survey data from Markit showed Wednesday. The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index rose to 57.2 in January from 55.8 in December. The score was forecast to rise to 56.3.