TSX Ends Lower On Global Economic Growth Worries -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a fourth straight session on Wednesday, driven by financial and raw materials stocks, tracking sharply declining global equity markets after the World Bank slashed its growth forecast for the global economy. The raw materials stocks were under pressure with copper prices sliding to a three-year low.

The World Bank downgraded its global economic forecast citing weak prospects for the euro area and Japan, despite an uptick in developing countries and strong momentum in the United States. In its biannual report 'Global Economic Prospects' released on Tuesday, the World Bank said global gross domestic product is expected to grow 3 percent in 2015, down from the 3.4 percent estimated in June.

For 2016, the bank has projected the world economy to expand 3.3 percent instead of 3.5 percent estimated earlier. The bank has predicted a 3.2 percent growth for 2017.

The Canadian stock market is tracking global equity markets lower with raw material stocks under pressure. The decline in the price of copper has brought the price of the metal to its lowest level since the middle of 2009.

Financial stocks also faltered after the disappointing quarterly report from U.S. bank JP Morgan Chase, while the energy sector ended higher as oil prices rebounded sharply just before close Nymex regular trade.

A much weaker than expected report on U.S. retail sales has also had a negative impact on investor sentiment, with retail sales slumping 0.9 percent in December. A separate report from the Labor Department showed that falling fuel prices contributed to another substantial decrease in U.S. import prices in December.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,084.43, down 102.73 points or 0.72 percent. The index scaled an intraday high of 14,119.75 and a low of 13,892.57

On Tuesday, the index closed down 77.85 points or 0.55 percent, at 14,187.16. The index scaled an intraday high of 14,369.84 and a low of 14,074.95.

The Diversified Metals & Mining Index plunged 8.76 percent, after having surrendered over 9 percent yesterday. First Quantum Minerals Ltd. (FM.TO) plunged 13.14 percent, after having tanked a near 15 percent yesterday. Lundin Mining Corp. (LUN.TO) plummeted 10.98 percent, after having shed over 9 percent yesterday.

Teck Resources Limited (TCK.B.TO) dived 6.48 percent, Finning International Inc. (FTT.TO) dropped 2.83 percent, Capstone Mining (CS.TO) tanked 19.38 percent, while HudBay Minerals (HBM.TO) tumbled 11.70 percent, having plunged 11.81 percent yesterday.

The heavyweight Financial Index dived 1.80 percent, as National Bank of Canada (NA.TO) dropped 1.83 percent, Toronto-Dominion Bank (TD.TO) fell 2.71 percent, and Bank of Nova Scotia (BNS.TO) shed 0.44 percent.

Royal Bank of Canada (RY.TO) fell 1.33 percent, while Bank of Montreal (BMO.TO) surrendered 1.34 percent. Canadian Imperial Bank of Commerce (CM.TO) dropped 1.82 percent.

Crude oil rallied towards the close to end over sharply higher on bargain hunting with the dollar trending lower against some major currencies. The late surge comes even as the official weekly oil report from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have jumped more than expected last week.

A weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have jumped 5.4 million barrels in the week ended January 9, while analysts expected a decline of 0.5 million barrels. Gasoline stocks rose by 3.2 million barrels last week, while analysts anticipated an increase of 3.5 million barrels.

Yesterday, the American Petroleum Institute said U.S. crude inventories rose 3.9 million barrels for the week ended January 9.

The Energy Index gained 0.37 percent, with U.S. crude oil futures for February delivery surging $2.59 or 5.6 percent to close at $48.48 a barrel on the Nymex Wednesday.

Among energy stocks, Legacy Oil + Gas Inc. (LEG.TO) jumped 9.30 percent, ARC Resources Ltd. (ARX.TO) gained 2.71 percent, Canadian Natural Resources Limited (CNQ.TO) added 2.54 percent, Suncor Energy Inc. (SU.TO) inched up 0.17 percent, and Canadian Oil Sands Limited (COS.TO) moved up 6.99 percent.

Pacific Rubiales Energy Corp. (PRE.TO) plunged 9.46 percent, having plummeted over 7 percent yesterday. Encana Corp. (ECA.TO) dropped 1.12 percent, Crescent Point Energy (CPG.TO) jumped 6.24 percent and Cenovus Energy Inc. (CVE.TO) added 2.51 percent.

Gold futures ended a tad higher after some disappointing retail sales data from the U.S. and the dollar weakening against a basket of some select currencies.

The Global Gold Index shed 1.40 percent, with gold for February delivery inched up $0.10 to settle at $1,234.50 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) shed 4.29 percent, Agnico Eagle Mines Limited (AEM.TO) slipped 1.27 percent, and Goldcorp Inc. (G.TO) added 0.78 percent.

Kinross Gold Corp. (K.TO) fell 0.26 percent, Eldorado Gold Corp. (ELD.TO) added 0.13 percent, Barrick Gold Corp .(ABX.TO) shed 2.74 percent, and Franco-Nevada Corp. (FNV.TO) surrendered 2.05 percent.

The Capped Materials Index shed 2.40 percent after having dropped over 4 percent yesterday, as gold stocks slipped, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.45 percent.

The Healthcare Index fell 1.11 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) slipped 0.85 percent, Catamaran Corp. (CCT.TO) fell 0.49 percent, and Extendicare Inc. (EXE.TO) shed 2.02 percent.

The Capped Industrials Index dropped 0.38 percent, although Bombardier Inc. (BBD.B.TO) gained 2.80 percent and Air Canada (AC.TO) down 2.85 percent.

The Information Technology Index gained 2.73 percent, with BlackBerry Limited (BB.TO) skyrocketing 29.48 percent.

Among other telecom stocks, Sierra Wireless (SW.TO) inched up 0.08 percent, and Constellation Software (CSU.TO) dropped 1.87 percent. Descartes Systems Group Inc. (DSG.TO) fell 2.72 percent.

Cogeco Cable Inc. (CCA.TO) dropped 1.75 percent, after reporting a first-quarter profit of C$1.15 per share, up from C$1.01 per share in the year-ago quarter. Analysts expected earnings of C$1.13 per share for the quarter. Revenues increased 4.6 percent to C$497.0 million, below the consensus estimate of C$497.21 million.

The Telecommunications Index dropped 0.38 percent, with Shaw Communications Inc. (SJR-B.TO) fell 3.79 percent. The company reported a first quarter profit of C$0.46 per share, down from C$0.51 per share in the prior-year. The consensus estimate was for earnings of C$0.53 per share.

On the economic front, a much weaker than expected report on U.S. retail sales has also had a negative impact on investor sentiment, with retail sales down 0.9 percent in December after climbing by a downwardly revised 0.4 percent in November. Economists expected sales to edge down by 0.1 percent.

A separate report from the Labor Department showed that falling fuel prices contributed to another substantial decrease in U.S. import prices in December, with import price index plummeting 2.5 percent after tumbling by a revised 1.8 percent in November. Economists expected import prices to slump by 2.7 percent.

Additionally, the report said export prices fell 1.2 percent in December following a 0.8 percent drop in the previous month. Export prices had been expected to fall by 0.5 percent.

Meanwhile, U.S. business inventories rose slightly less than expected in November, with an increase in wholesale inventories partly offset by a drop in retail inventories, the Commerce Department said. The report showed business inventories up by 0.2 percent in November, matching the modest increase seen in October. Economists expected inventories to rise by about 0.3 percent.

From Europe, the leading economic index for the UK, which measures the future economic activity, dropped for the third straight month in November, data from the Conference Board showed Wednesday. The Conference Board's leading economic index fell 0.3 percent in November, same as in both September and October. In the May to November period, the leading index improved 0.3 percent, down from 2.2 percent growth in the previous six-month period.