TSX Ends Lower As Resources Stocks Decline -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day gain to end lower on Thursday, on some soft U.S. and Chinese manufacturing data, amid speculations of a Fed rate hike. Resource stocks fell as crude oil and gold prices continued to decline, leading a slide in the mining, energy, and material sectors.

The market got off to a positive start, but those early gains quickly eroded. Early strength in energy stocks tapered off, while losses in gold stocks overshadowed modest gains in other sectors.

Markets in Europe turned in a mixed performance Thursday. Manufacturing data from China and the positive performance of the Asian markets were a source of strength in early trade, but most of the gains were wiped off towards the close.

Markets in the U.S. ended mixed with stocks recovering from lows to end mostly higher. The Dow Industrials ended 0.1 percent lower, while the Nasdaq Composite was up 0.2 percent. The S&P 500 ended 0.2 percent higher. The markets had been up in early trade, but turned lower after the weaker than expected ISM manufacturing report, with investors now focused on September jobs report on Friday.

With tomorrow's closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits rose more than expected in the week ended September 26.

Meanwhile, a report from the Institute for Supply Management on Thursday showed activity in the U.S. manufacturing sector to have dropped to a two-year low in September, partly reflecting concerns about the global economy and customer confidence.

China's manufacturing conditions deteriorated the most in six-and-a-half years in September as orders declined sharply on weak foreign demand, results of a private sector survey revealed Thursday. However, China's official purchasing managers' index showed a moderate uptick in September to 49.8 from 49.7 in August, better than what analysts expected.

The benchmark S&P/TSX Composite Index closed Thursday at 13,241.89, down 65.07 points or 0.49 percent. The index scaled an intraday high of 13,379.85 and a low of 13,152.09.

On Wednesday, the index closed up 270.00 points or 2.07 percent, at 13,306.96. The index scaled an intraday high of 13,310.55 and a low of 13,135.19.

The Capped Health Care Index gained 3.51 percent, even as domestic pharma were under pressure amid the scrutiny over its U.S. drug pricing. Valeant Pharmaceuticals International (VRX.TO) inched up 0.04 percent, having lost about 22 percent in September.

Concordia Healthcare Corp. (CXR.TO) jumped 5.02 percent, while Extendicare Inc. (EXE.TO) shed 1.75 percent.

Gold futures ended lower amid increased speculation of the timing for a Federal Reserve rate hike ahead of the September U.S. jobs data tomorrow.

The Gold Index tumbled 3.22 percent, with gold for December delivery shedding $1.50 or 0.1 percent, to settle at $1,113.70 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) tumbled 4.44 percent, Goldcorp Inc. (G.TO) dropped 3.83 percent, and Barrick Gold (ABX.TO) fell 3.53 percent.

Kinross Gold Corp. (K.TO) dropped 3.45 percent, while Eldorado Gold (ELD.TO) plunged 5.37 percent.

The Capped Materials Index tumbled 3.11 percent, as Potash Corp. of Saskatchewan Inc. (POT.TO) plummeted 4.92 percent, Agnico Eagle Mines Limited (AEM.TO) shed 3.19 percent, Agrium Inc. (AGU.TO) fell 2.66 percent and Franco-Nevada Corp. (FNV.TO) dropped 3.40 percent.

The Diversified Metals & Mining Index dropped 1.44 percent, as Teck Resources Limited (TCK-B.TO) tumbled 4.40 percent, even as First Quantum Minerals (FM.TO) ended flat at C$4.89 a share.

Lundin Mining Corporation (LUN.TO) added 2.12 percent, while HudBay Minerals Inc. (HBM.TO) added 1.62 percent.

The heavyweight Financial Index moved up 0.5 percent, as Royal Bank of Canada (RY.TO) dropped 0.30 percent and National Bank of Canada (NA.TO) gained 1.31 percent.

Toronto-Dominion Bank (TD.TO) gained 0.27 percent. The bank announced the expansion of its operations in Waterloo, which is expected to create more than 120 jobs over the next year.

Bank of Nova Scotia (BNS.TO) moved up 0.42 percent, Canadian Imperial Bank Of Commerce added 0.40 percent, and Bank of Montreal (BMO.TO) gathered 0.54 percent.

Crude oil prices ended lower after some disappointing economic data from the U.S. amid the geopolitical tensions in the Middle East and worries about the impact of Hurricane Joaquin.

Yesterday, the U.S. Energy Information Administration said crude stockpiles in the U.S. climbed 4.0 million barrels, even as total domestic crude output dropped 48,000 barrels to about 9.1 million barrels a day.

The Energy Index dropped 0.85 percent, with U.S. crude oil futures for November delivery shedding $0.35 or 0.8 percent, to settle at $44.74 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) moved up 1.24 percent, Canadian Natural Resources Limited (CNQ.TO) shed 1.23 percent, and Canadian Oil Sands (COS.TO) fell 1.74 percent.

Cenovus Energy (CVE.TO) dropped 2.82 percent, while Baytex Energy Corp. plunged 5.39 percent. Encana Corp. (ECA.TO) gathered 2.44 percent, while Suncor Energy (SU.TO) fell 1.23 percent.

The Capped Information Technology Index added 0.91 percent, as BlackBerry (BB.TO) fell 1.71 percent, Descartes Systems Group (DSG.TO) jumped 3.93 percent, and Constellation Software (CSU.TO) climbed 3.65 percent. Avigilon (AVO.TO) inched up 0.09 percent.

The Capped Telecommunication Index dropped 0.19 percent, as TELUS Corp. (T.TO) slipped 1.14 percent, Rogers Communication (RCI-B.TO) shed 0.94 percent, and BCE Inc. (BCE.TO) edged down 0.05 percent.

The Capped Industrials Index gained 0.12 percent. Bombardier (BBD-B.TO) plunged 8.98 percent, while (CAE.TO) inched up 0.14 percent. Bombardier closed the sale of its Military Aviation Training activities to CAE for C$19.8 million.

Air Canada (AC.TO) dropped 0.47 percent, Finning International Inc. (FTT.TO) shed 1.15 percent, and AutoCanada (ACQ.TO) fell 0.62 percent.

Canadian Pacific Railway (CP.TO) gained 1.37 percent, while Canadian National Railway Company (CNR.TO) dropped 0.38 percent.

Amaya Inc. (AYA.TO) soared 17.14 percent, after receiving approval for operating its PokerStars and Full Tilt brands in New Jersey from the New Jersey Division of Gaming Enforcement, U.S. Amaya is a technology company, and owns gaming and related consumer businesses and brands.

Penn West Petroleum (PWT.TO) surged 1.67 percent, after the sale of its non-operated 9.5 percent working interest in the Weyburn Unit in Southeast Saskatchewan for a cash consideration of C$205 million.

Alimentation Couche-Tard (ATD-A.TO) fell 1.11 percent, after it completed the sale of its lubricants business in Europe.

Engineering and construction company SNC-Lavalin (SNC.TO) gathered 2.66 percent, after having soled its 5 percent ownership in the Ambatovy Nickel Joint Venture Project to Sumitomo Corp., an existing partner, for about C$600 million.

On the economic front, a Labor Department report on Thursday showed first-time claims for U.S. unemployment benefits climbed to 277,000, an increase of 10,000 from the previous week's unrevised level of 267,000. Economists expected jobless claims to edge up to 271,000.

A report from the Institute for Supply Management on Thursday showed its activity in the U.S. manufacturing sector to have dropped to a two-year low in September, partly reflecting concerns about the global economy and customer confidence.

The ISM's purchasing managers index dropped to 50.2 in September from 51.1 in August, although a reading above 50 indicates growth in the sector. Economists expected the index to dip to 50.5. With the bigger than expected decrease, the manufacturing index fell to its lowest level since hitting 50.1 in May of 2013.

Construction spending in the U.S. increased by slightly more than expected in August, a report from the Commerce Department showed Thursday. Construction spending climbed 0.7 percent to an annual rate of $1.086 trillion in August from the revised July estimate of $1.079 trillion. Economists expected spending to rise by 0.6 percent.

China's manufacturing conditions deteriorated the most in six-and-a-half years in September as orders declined sharply on weak foreign demand, results of a private sector survey revealed Thursday.

The final manufacturing Purchasing Managers' Index for China dropped to 47.2 in September from 47.3 in August, data from the Caixin Insight Group and Markit showed. That was the lowest reading since March 2009. The health of the sector has weakened in each of the past seven months. The final reading was above the flash score of 47.

Meanwhile, the official manufacturing PMI rose moderately to 49.8 in September from 49.7 in August, reflecting marginal improvement in production and new orders.

Eurozone manufacturing activity grew at a slower pace as estimated in September, final data from Markit showed Thursday. The manufacturing Purchasing Managers' Index fell to a five-month low of 52 in September from 52.3 in August. The reading came in line with flash estimate.

Germany's manufacturing sector expanded less than initially estimated in September, survey data from Markit showed Thursday. The final Markit/BME manufacturing Purchasing Managers' Index dropped to 52.3 in September from 53.3 in August. The flash score was 52.5.

The French manufacturing sector returned to growth at a faster than estimated pace in September, final data from Markit showed Thursday. The manufacturing Purchasing Managers' Index came in at 50.6, up from 48.3 in August. It was above the flash estimate of 50.4.

British factory activity expanded at the weakest pace in three months in September, suggesting minimal support to the economy from manufacturing. The seasonally adjusted Purchasing Managers' Index fell slightly to 51.5 in September from 51.6 in August, which was revised up from 51.5, survey figures from the Chartered Institute of Procurement & Supply and Markit Economics showed Thursday. Economists had forecast the index to fall to 51.3.