TSX Slips Amid Cautious Trade - Canadian Commentary

(RTTNews) - Canadian stocks were extending losses for a fifth straight session Monday morning as traders turned cautious ahead of the outcome of FOMC meeting and the U.S. non-farm payrolls report, due out during this week.

The U.S. Federal Reserve will release its monetary policy statement on Wednesday, with many expecting the central bank to maintain interest rates and reiterate that it plans to keep monetary policy accommodative. In his two-day testimony to Congress, which concluded on July 18, Fed Chairman Ben Bernanke said that it was too early to make a judgment on tapering bond purchases.

The S&P/TSX Composite Index slipped 10.33 points or 0.08 percent to 12,637.58, after losing over 100 points or nearly 1 percent in the past four straight trading sessions.

The Diversified Materials Index was down over 2 percent, with Teck Resources (TCK_B.TO) and First Quantum Minerals (FM.TO) shedding around 2 percent each

The price of crude oil was ticking higher Monday morning amid concerns over supply disruption from the Middle-East, with worries over China's stuttering economy capping big gains. Crude for September edged up $0.16 to $104.86 a barrel.

In the oil patch, Tourmaline Oil (TOU.TO), Paramount Resources (POU.TO), Baytex Energy Corp. (BTE.TO) and Bonterra Energy (BNE.TO) were down about 2 percent each.

The price of gold was moving higher Monday morning, with the US dollar trading weak versus a basket of currencies as traders expect the Federal Reserve, in its meeting later this week, to reaffirm its commitment to keep U.S. interest rates at record low till mid-2014. Gold for August added $9.00 to $1,330.50 an ounce.

Among gold stocks, Barrick Gold (ABX.TO) and Detour Gold (DGC.TO) lost around 2 percent each, while Seabridge Gold (SEA.TO) adding close to 3 percent.

Department stores operator Hudson's Bay Company (HBC.TO) gained over 7 percent after it said said it would acquire Saks Incorporated (SKS) for US$16.00 per share in an all-cash transaction valued at approximately US$2.9 billion, including debt. Hudson's Bay further said it intends to continue paying a quarterly dividend of C$0.09375 per share through closing of the transaction; after closing, the company expects to reduce its quarterly dividend to C$0.05 per share to accelerate deleveraging in the short term.

Electric utility Capital Power Corp. (CPX.TO) gathered nearly 2 percent after it swung to profit in second-quarter, reporting net income of C$20 million or C$0.19 per share, compared with a net loss of C$32 million or C$0.57 per share last year. Excluding items, normalized earnings for the quarter were C$17 million or C$0.24 per share, compared with C$5 million or C$0.07 per share a year ago. Analysts estimated earnings of C$0.19 per share for the quarter.

In economic news from the U.S., the National Association of Realtors said its pending home sales index edged down 0.4 percent to 110.9 in June from a downwardly revised 111.3 in May. Economists had been expecting the index to drop by about 1.4 percent.

From the euro zone, U.K. mortgage approvals declined in June despite measures taken by the government and central bank to ease credit conditions, data from the Bank of England showed. The number of loans approved for house purchases fell unexpectedly to 57,667 in June from 58,071 in May. It was forecast to rise to 59,500 in June.

During this week traders focus will be on the monthly US non-farm payrolls report for July and the FOMC meeting beginning on Tuesday. Traders may also closely track the results of the Institute for Supply Management's national manufacturing survey for July and a couple of regional manufacturing surveys from the ISM-Chicago, the results of ADP's private payrolls survey, the National Association of Realtors' pending home sales index for June, the Conference Board's consumer confidence reading for July, the jobless claims report and the Commerce Department's personal income and spending report for June.