TSX Ends Sharply Lower On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply lower for a second straight session on Wednesday, tracking declining global equity markets after some soft data from the U.S. with private sector employment coming in weaker than expected, ahead of Friday's U.S. employment report.

The continued rise in crude oil prices appeared to have little impact on stocks. The energy sector turned in a weak performance, even as oil prices rose to a new high for the year. Mining and gold stocks are also among the weakest performers.

Most markets in Europe ended on a positive note, rebounding from yesterday's sell-off. Mixed economic reports, concerns over Greece and uncertainty ahead of Thursday's British general election are having an impact on investor sentiment.

Markets in the United States were also under pressure. In addition to the weak private sector employment report, unit labor costs in the U.S. surged in the first quarter. Meanwhile, labor productivity declined, but matched economist estimates.

Federal Reserve Chair Janet Yellen also stated this morning that "Equity market valuations at this point generally are quite high," and warned that "there are potential dangers there." Yellen made the comments at a joint appearance with International Monetary Fund Managing Director Christine Lagarde.

In another sign of sluggishness in the U.S. labor market, a report from payroll processor ADP on Wednesday showed private sector employment to have increased much less than expected in April.

Meanwhile, labor productivity in the U.S. showed another notable decrease in the first quarter of 2015, a report from the Labor Department showed Wednesday.

The benchmark S&P/TSX Composite Index closed Wednesday at 15,023.89, down 150.05 points or 0.99 percent. The index scaled an intraday high of 15,148.51 and a low of 14,945.01.

On Tuesday, the index closed down 193.53 points or 1.26 percent, at 15,173.94, having scaled an intraday high of 15,416.56 and a low of 15,128.22.

The Diversified Metals & Mining Index shed 0.94 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 0.76 percent, Lundin Mining (LUN.TO) dipped 0.47 percent, and Teck Resources Limited (TCK.B.TO) fell 2.19 percent. Sherritt International Corp. (S.TO) added 2.01 percent.

Gold futures ended lower after economic data from the U.S. showed employment in the private sector to have increased less than expected.

The Gold Index plummeted 2.60 percent, with gold for June delivery shedding $2.90 or 0.2 percent to settle at $1,190.30 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 2.59 percent, Barrick Gold Corp. (ABX.TO) fell 3.80 percent, and Yamana Gold Inc. (YRI.TO) dropped 2.63 percent.

Eldorado Gold Corp. (ELD.TO) shed 3.19 percent, while Agnico Eagle Mines Limited (AEM.TO) dived 3.68 percent.

Kinross Gold Corp. (K.TO) dived 4.33 percent, after reporting first quarter adjusted earnings of $0.01 per share, down from $0.03 per share a year ago.

IAMGOLD (IMG.TO) tanked 6.93 percent after reporting a first quarter adjusted loss of C$0.07 per share, while analysts expected a loss of C$0.04 per share.

The Capped Materials Index fell 1.29 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) slipping 0.05 percent, while Agrium Inc. (AGU.TO) jumped 3.17 percent.

Franco-Nevada Corp. (FNV.TO) dropped 2.81 percent, while Silver Wheaton (SLW.TO) dipped 1.46 percent.

U.S. crude oil ended at its highest for the year on Wednesday, after official data from the Energy Information Administration showed stockpiles to have declined for the first time in nearly four months, amid continued tensions in the Middle East and the ongoing Greek financial crisis.

U.S. Energy Information Administration reported that stockpiles of U.S. oil fell by 3.9 million barrels. Analysts had expected a build of 1.5 million barrels.

The Energy Index plunged 2.75 percent, with U.S. crude oil futures for June delivery, the most actively traded contract, gaining $0.53 or 0.9 percent, to settle at $60.93 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) shed 3.39 percent, while Crescent Point Energy Corp. (CPG.TO) dipped 0.29 percent.

Canadian Natural Resources Limited (CNQ.TO) fell 2.90 percent, while Cenovus Energy Inc. (CVE.TO) plummeted 6.03 percent. Encana Corp. (ECA.TO) fell 2.18 percent, while Canadian Oil Sands Limited (COS.TO) plunged 6.38 percent.

Pacific Rubiales Energy Corp. (PRE.TO) skyrocketed 27.54 percent, as the company entered into exclusive discussions after receiving an offer from ALFA, S.A.B. de C.V. and Harbour Energy Ltd. to be acquired for C$6.50 per share.

Enbridge Inc. (ENB.TO) declined 2.69 percent, after reporting first quarter earnings drop of C$0.56 per share, down from C$0.60 per share in the prior year. Analysts expected earnings of C$0.58 per share.

The heavyweight Financial Index declined 0.61 percent, as Bank of Nova Scotia (BNS.TO) fell 0.87 percent, while Toronto-Dominion Bank (TD.TO) shed 0.70 percent. Royal Bank of Canada (RY.TO) surrendered 0.72 percent, and Canadian Imperial Bank of Commerce (CM.TO) dropped 0.92 percent.

National Bank of Canada (NA.TO) dropped 0.27 percent, while Bank of Montreal (BMO.TO) dived 0.85 percent.

The Capped Health Care Index fell 1.34 percent as Concordia Healthcare Corp. (CXR.TO) dropped 1.14 percent, Catamaran Corp. (CCT.TO) shed 0.33 percent, and Extendicare Inc. (EXE.TO) slipped 1.88 percent. Valeant Pharmaceuticals International Inc. (VRX.TO) surrendered 1.66 percent.

The Capped Industrials Index fell 0.69 percent, as Air Canada gained 0.27 percent, Canadian Pacific Railway Limited (CP.TO) declined 1.22 percent, Finning International Inc. (FTT.TO) gained 4.69 percent, and Bombardier Inc. (BBD.B.TO) declined 1.24 percent.

Canadian National Railway (CNR.TO) declined 1.02 percent.

The Information Technology Index dropped 1.08 percent, as BlackBerry Limited (BB.TO) dropped 1.58 percent, Descartes Systems Group Inc. (DSG.TO) dipped 2.92 percent, and Sierra Wireless, Inc. (SW.TO) fell 1.24 percent.

The Capped Telecommunication Index gained 1.41 percent, as BCE Inc. (BCE.TO) fell 0.87 percent, Rogers Communications Inc. (RCI.B.TO) jumped 4.30 percent, TELUS Corp. (T.TO) moving up 2.84 percent, and Manitoba Telecom Services Inc. (MBT.TO) dropping 1.19 percent.

Avigilon Corp. (AVO.TO) tanked 23.58 percent, after reporting first quarter adjusted earnings of $0.17 per share, down from $0.19 per share last year.

Keyera (KEY.TO) fell 2.41 percent, after earnings dipped to $0.33 from $0.35 last year.

Martinrea International (MRE.TO) gained 5.99 percent, after its first quarter earnings advanced to $0.36 per share from $0.20 per share a year ago.

On the economic front, a report from payroll processor ADP on Wednesday showed private sector employment increased much less than expected in April, in another sign of sluggishness in the U.S. labor market.

ADP said employment in the private sector increased by 169,000 jobs in April compared to a downwardly revised increase of 175,000 jobs in March. Economists had expected private sector employment to climb by about 200,000 jobs compared to the addition of 189,000 jobs originally reported for the previous month.

Labor productivity in the U.S. showed another notable decrease in the first quarter of 2015, a report from the Labor Department showed Wednesday. Labor productivity fell by 1.9 percent in the first quarter following a 2.1 percent decrease in the fourth quarter. The continued drop in productivity matched economist estimates.

Meanwhile, the Labor Department said unit labor costs surged up by 5.0 percent in the first quarter after jumping by 4.2 percent in the fourth quarter. Economists had expected costs to increase by 4.5 percent.

Elsewhere, the services sector in China expanded at an accelerated pace in April, the latest survey from HSBC showed on Wednesday, with a PMI score of 52.9. That's up from 52.3 in March, and it moves further above the boom-or-bust score of 50 that separates expansion from contraction.

Eurozone retail sales declined in March for the first time in six months as both food and non-food product turnover decreased from February. Retail sales volume dropped 0.8 percent month-on-month in March, reversing a 0.1 percent rise in February, Eurostat reported Wednesday. This was the first decline since September and was larger than an expected drop of 0.7 percent.

Eurozone private sector growth slowed slightly less than initially estimated in April, final data from Markit Economics showed Wednesday. The composite output index fell slightly to 53.9 in April from 54 in March. The flash score was 53.5. The rate of expansion in economic output held broadly steady at March's 11-month high.

Germany's private sector growth weakened more than initially estimated in April, data from Markit revealed Wednesday. The composite output index fell to 54.1 in April from an eight-month high of 55.4. It was also below the flash score of 54.2. The latest index reading still indicates solid output growth.

The French private sector growth eased further in April but slowed less than previously estimated, final data from Markit showed Wednesday. The composite output index fell to 50.6 in April from 51.5 in March. The reading signals a marginal growth rate. The flash score was 50.2.

The British services sector grew the most in eight months in April, led by marked gains in new business, which prompted firms to continue with robust pace of job creation, survey results from Markit Economics revealed Wednesday. The seasonally adjusted Markit/CIPS UK Services Purchasing Managers' Index for the services sector rose to 59.5 from 58.9 in March. Economists had expected a score of 58.5.