Canadian Stocks Are Up As Crude Oil Prices Rebound -- Canadian Commentary

(RTTNews) - The Canadian stock market is climbing in early trade Tuesday, as it attempts to bounce back from a 2-year low. The market is receiving a boost from rebounding crude oil prices this morning. Crude oil prices had dropped below $35 per barrel yesterday, but are approaching $37 a barrel in early trade.

Markets in Europe are rallying Tuesday, as investors hunt for bargains following the recent pull back. Investor sentiment is also receiving a boost from German economic confidence data, which improved for the second straight month in December.

Markets in the United States are also gaining ground in early trade Tuesday. Traders continue to look for bargains following the substantial weakness of the previous week. The strength in Europe and the rebound in oil prices is also contributing to the positive mood.

The Federal Reserve has begun its two day policy meeting today and is expected to announce an interest rate hike Wednesday afternoon.

Despite a notable decrease in energy prices, the Labor Department released a report on Tuesday showing that U.S. consumer prices were flat in the month of November. The Labor Department said its consumer price index was unchanged in November after rising by 0.2 percent in October. The flat reading matched economist estimates.

New York manufacturing activity contracted for the fifth consecutive month in December, according to a report released by the Federal Reserve Bank of New York on Tuesday, although the pace of decline slowed more than expected.

The New York Fed said its general business conditions index climbed to a negative 4.6 in December from a negative 10.7 in November, but a negative reading continues to indicate a drop in manufacturing activity. Economists had expected the index to rise to a negative 7.0.

Homebuilder confidence in the U.S. has unexpectedly deteriorated in the month of December, according to a report released by the National Association of Home Builders on Tuesday. The report said the NAHB/Wells Fargo Housing Market Index edged down to 61 in December from 62 in November. The drop surprised economists, who had expected the index to inch up to 63.

The benchmark S&P/TSX Composite Index is up 171.00 points or 1.35 percent at 12,866.49.

On Monday, the index closed down 94.46 points or 0.74 percent, at 12,695.49. The index scaled an intraday high of 12,805.24 and a low of 12,617.66.

The Capped Health Care Index is surging 4.66 percent. Concordia Healthcare (CXR.TO) is up 4.82 percent and Extendicare (EXE.TO) is rising 2.87 percent.

Valeant Pharmaceuticals International (VRX.TO) is soaring 15.33 percent. The company announced new fulfillment agreements with Walgreens. Valeant will reduce prices of its dermatological and ophthalmological products by 10 percent.

The Diversified Metal and Mining Index is advancing 2.21 percent. First Quantum Minerals (FM.TO) is rising 0.38 percent and HudBay Minerals (HBM.TO) is gaining 0.43 percent. Lundin Mining (LUN.TO) is increasing 1.45 percent and Sherritt International (S.TO) is higher by 1.52 percent.

The Energy Index is increasing 2.11 percent. Crude oil prices nudged higher Tuesday morning, staying away from yesterday's 6-year lows ahead of a likely US interest rate hike. Crude oil found support just before hitting its lowest since 2004.

Crescent Point Energy (CPG.TO) is higher by 4.34 percent and Cenovus Energy Inc (CVE.TO) is advancing 2.44 percent. Imperial Oil (IMO.TO) is climbing 1.44 percent and Encana (ECA.TO) is adding 0.66 percent. Enbridge (ENB.TO) is gaining 2.70 percent and Canadian Natural Resources (CNQ.TO) is rising 2.85 percent. Husky Energy (HSE.TO) is up 1.12 percent.

Suncor Energy Inc. (SU.TO), which has launched a hostile C$4.3 billion bid to acquire oil-sands producer Canadian Oil Sands Ltd. (COS.TO), said it has sent a letter to the target company's shareholders which strongly encourages Canadian Oil Sands shareholders to tender to its offer. Suncor Energy (SU.TO) is up 1.36 percent and Canadian Oil Sands (COS.TO) is adding 2.37 percent.

The heavyweight Financial Index is rising 1.23 percent. Royal Bank of Canada (RY.TO) is gaining 1.30 percent and National Bank of Canada (NA.TO) is advancing 1.45 percent. Bank of Montreal (BMO.TO) is higher by 1.42 percent and Bank of Nova Scotia (BNS.TO) is increasing 0.83 percent. Toronto-Dominion Bank (TD.TO) is up 1.31 percent and Canadian Imperial Bank of Commerce (CM.TO) is climbing 1.06 percent.

The Capped Information Technology Index is up 1.05 percent. Sierra Wireless (SW.TO) is advancing 0.62 percent and Constellation Software (CSU.TO) is rising 0.47 percent. BlackBerry (BB.TO) is gaining 2.79 percent and Descartes Systems Group (DSG.TO) is higher by 1.13 percent. Avigilon (AVO.TO) is also climbing 2.39 percent.

The Capped Industrials Index is higher by 0.78 percent. Air Canada (AC.TO) is up 0.68 percent and Bombardier (BBD-A.TO) is adding 1.54 percent. Canadian Pacific Railway (CP.TO) is gaining 0.68 percent and Canadian National Railway (CNR.TO) is rising 0.62 percent. CAE (CAE.TO) is advancing 0.77 percent and AutoCanada (ACQ.TO) is surging 6.82 percent.

The Capped Materials Index is up 0.19 percent. Agrium (AGU.TO) is rising 0.20 percent and Potash Corp. of Saskatchewan (POT.TO) is increasing 1.17 percent.

The Capped Telecommunication Services Index is rising 0.07 percent. BCE (BCE.TO) is climbing 0.29 percent.

The Gold Index is falling 0.21 percent. Gold prices steadied Tuesday morning as the Federal Reserve gathers in Washington for what is expected to be an historic meeting.

Goldcorp (G.TO) is decreasing 0.33 percent and Yamana Gold (YRI.TO) is losing 2.62 percent. Barrick Gold (ABX.TO) is declining 1.03 percent and Eldorado Gold (ELD.TO) is falling 1 percent. Kinross Gold (K.TO) is down 2.13 percent and B2Gold (BTO.TO) is lower by 1.35 percent. Royal Gold (RGL.TO) is weakening by 0.60 percent.

IAMGOLD (IMG.TO) is rising 0.53 percent. The company announced that employees at its Rosebel Gold Mine in Suriname have ended their illegal strike and the mine has resumed production.

Turquoise Hill Resources (TRQ.TO) is climbing 2.76 percent. The company announced that Oyu Tolgoi LLC has signed a $4.4 billion project finance facility.

Hudson's Bay (HBC.TO) is increasing 0.60 percent. The company is reportedly close to a deal to acquire Gilt Groupe.

On the economic front, Statistics Canada reported this morning that Canadian manufacturing sales dropped 1.1 percent in October. Economists had expected a decrease of 0.5 percent.

German economic confidence improved to a five-month high in December as investors expect the asset purchase program of the European Central Bank to boost recovery, the survey carried out by the Mannheim-based Centre for European Economic Research, or ZEW showed Tuesday.

The ZEW Indicator of Economic Sentiment rose a more-than-expected 5.7 points to 16.1 in December. This was the highest score since July, when it was 29.7 and also above the consensus estimate of 15.

U.K. inflation turned positive for the first time in four months in November largely driven by transport costs, while factory gate prices continued its downward trend on lower crude oil cost. Consumer prices edged up 0.1 percent year-on-year in November, reversing a 0.1 percent fall in October, the Office for National Statistics said Tuesday.

The annual rate came in line with expectations. Inflation continues to remain well below the central bank's 2 percent target.

U.K. house price inflation accelerated for the third straight month in October to the highest level in seven months, figures from the Office for National Statistics showed Tuesday. The house price index rose 7.0 percent year-over-year in October, faster than the 6.1 percent hike in the previous month.

In commodities, crude oil futures for January delivery are up $0.47 or 1.29 percent at $36.78 a barrel.

Natural gas for January is down 0.058 or 3.06 percent at $1.836 per million btu.

Gold futures for February are down $1.60 or 0.15 percent at $1,061.80 an ounce.

Silver for March is up $0.045 or 0.33 percent at $13.74 an ounce.