TSX Ends At A 6-Year High -- Canadian Commentary

(RTTNews) - Canadian stocks moved up for a second straight session to a six-year high on Wednesday, after data showed the economy grew in February even as the U.S. economy edged up in the first quarter. Investors also weighed the U.S. Federal Reserve's move to cut its bond-buying program for a fourth straight month, while indicating the economy to be rebounding.

The U.S. Federal Reserve went ahead with a further cut to its bond-buying program by $10 billion to $45 billion, the fourth straight month of reduction. The cut came despite some soft growth in the economy with the first quarter U.S. gross domestic product inching up just 0.1 percent. The Fed maintained that the economy is rebounding after some stalled growth in the first quarter. The Fed also held on to its benchmark federal rate at zero, which it has maintained since December 2008.

Some positive U.S private sector employment data and some upbeat results from Canadian companies also aided sentiment. Private sector employment in the U.S. continued to show significant growth in April, a report from payroll processor ADP showed Wednesday, with the pace of job growth exceeding estimates.

A Commerce Department report on Wednesday showed only a modest uptick in U.S. economic activity in the first three months of 2014, reflecting the impact of the severe winter weather. Meanwhile, a report from MNI Indicators showed the Chicago business barometer jumping to its highest level in six months, with business activity increasing at a substantially accelerated rate in April.

The S&P/TSX Composite Index closed Tuesday at 14,651.87, up 68.67 points or 0.47 percent. The index scaled an intraday high of 14,662.01 and a low of 14,569.32. The Index ended at its highest since June 2008.

Crude oil ended sharply lower after a weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have risen, albeit less than expected last week.

The U.S. Energy Information Administration data showed U.S. crude oil inventories to have risen by 1.7 million barrels in the week ended April 25, while analysts expected an increase of 2.1 million barrels. Stockpiles aggregated 399.4 million barrels, the highest commercial crude inventories since late August 1982.

Gasoline stocks rose by 1.6 million barrels last week, with analysts anticipating a decline of 1.75 million barrels. Inventories of distillate, including heating fuel, rose by 1.9 million barrels, even as analysts projected an increase of 1.0 million barrels.

The Energy Index dropped 0.55 percent, with U.S. crude oil futures for June delivery, plummeting $1.54 or 1.5 percent to close at $99.74 a barrel Wednesday on the Nymex.

Among energy stocks, Encana Corp. (ECA.TO) dropped 1.13 percent, Husky Energy Inc. (HSE.TO) slipped 0.33 percent and Canadian Natural Resources Ltd. (CNQ.TO) shed 0.65 percent. Suncor Energy Inc. (SU.TO) fell 0.75 percent.

Cenovus Energy Inc (CVE.T) dropped 1.12 percent despite a surge in earnings, reporting a net profit of C$247 million, or C$0.33 per share, in the quarter ended March 31, up 44 percent from the same period last year.

The Capped Healthcare Index dropped 0.38 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) adding 0.36 percent and Catamaran Corp. (CCT.TO) surrendering 1.82 percent.

Gold futures ended lower ahead of the two-day Federal Open Market Committee outcome on Wednesday.

The Global Gold Index dropped 0.79 percent, with gold futures for June delivery, dipping $0.40 to close at $1,295.90 an ounce Tuesday on the Nymex.

Among gold stocks, Agnico Eagle Mines Limited (AEM.TO) shed 0.49 percent, Yamana Gold Inc. (YRI.TO) fell 1.79 percent, Kinross Gold Corp. (K.TO) dropped 1.33 percent, B2Gold Corp. (BTO.TO) lost 2.17 percent, and Osisko Mining Corporation (OSK.TO) slipped 1.13 percent.

Barrick Gold Corp. (ABX.TO) dropped 1.14 percent after reporting adjusted net earnings of $238 million or $0.20 per share for the first quarter, compared to $923 million or $0.92 per share in the prior year.

The Capped Materials Index shed 0.22 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) up 1.17 percent.

The Financial Index gained 0.85 percent with the Toronto-Dominion Bank (TD.TO) adding 1.21 percent, Royal Bank of Canada (RY.TO) up 0.55 percent, and The Bank of Nova Scotia (BNS) moved up 1.03 percent. Bank of Montreal (BMO.TO) added 0.56 percent, while National Bank of Canada (NA.TO) gained 0.31 percent.

The Diversified Metals & Mining Index added 0.58 percent, with Lundin Mining Corp. (LUN.TO) down 0.36 percent, First Quantum Minerals Ltd. (FM.TO) up 0.18 percent, and Teck Resources Limited (TCK.B.TO) added 1.54 percent.

The Information Technology Index gained 1.03 percent, with BlackBerry Limited (BB.TO) down 0.01 percent.

Among other technology stocks, Constellation Software Inc. (CSU.TO) dropped 2.17 percent and Celestica Inc. (CLS.TO) shed 0.41 percent. Avigilon Corp. (AVO.TO) surrendered 0.81 percent.

The Capped Industrials Index advanced 1.90 percent, with Bombardier Inc. (BBD.B.TO) up 5.50 percent, and Air Canada (AC.B) down 2.32 percent.

In corporate news, Thomson Reuters Corp. (TRI.TO) gained 3.98 percent after reporting first-quarter earnings to shareholders of $282 million or $0.34 per share, compared to a loss of $31 million or $0.04 per share, previous year.

CGI Group Inc. (GIB-A.TO) rose 3.78 percent after its second-quarter net earnings increased to C$230.9 million or C$0.73 per share, from C$114.2 million or C$0.36 per share, a year ago.

Canfor Pulp Products Inc (CFX.TO) jumped 7.12 percent after reporting a profit of $25.7 million or $0.36 per share for the first quarter, compared to $10.9 million or $0.15 per share in the first quarter last year.

Jean Coutu Group Inc (PJC.A.TO) added 2.03 percent, after reporting a net profit of $0.30 per share for the fourth quarter, compared to $0.25 for the same period last year.

Loblaw Companies Limited (L.TO) gained 4.04 percent after its adjusted net earnings per common share rose 2.1% to $0.49 for the first quarter.

Sherritt International Corporation (S.TO) lost 0.43 percent after posting a first-quarter loss of $48.2 million or $0.16 per share, compared to earnings of $23.1 million or $0.08 per share last year.

On the economic front, Statistics Canada said, the Canadian economy grew by 0.2 per cent in February.

In economic news from the U.S., The Commerce Department said gross domestic product inched up by just 0.1 percent in the first quarter of 2014 compared to the 2.6 percent increase in GDP in the fourth quarter of 2013. The consensus estimate was for a 1.2 percent sequential increase in first quarter growth.

MNI Indicators said the Chicago business barometer surged up to 63.0 in April from 55.9 in March, with a reading above 50 indicating growth in Chicago-area business activity. Economists expected barometer at a reading of 57.0. The business barometer has thus bounced off the seven-month low set in March to reach its highest level since last October.

Meanwhile, ADP said private sector employment in the U.S. surged by 220,000 jobs in April compared to economist estimates for an increase of about 210,000 jobs. The report also showed notable upward revisions to the job growth in the two previous months, with private sector employment jumping by 209,000 jobs in March and 193,000 jobs in February.

The FOMC's monetary policy statement will be released at 2 pm ET. Economists widely expect the Fed to leave the Fed rates unchanged at 0-0.25 percent and announce a $10 billion taper to its bond purchase program.

German unemployment declined more-than-expected in April, indicating economic recovery to have pushed companies to hire more staff. The number of people out of work declined 25,000 from March to 2.872 million in April, the Federal Labor Agency reported Wednesday. This was the fifth consecutive decline in unemployment. Economists forecast unemployment to decrease by 10,000 in April.

Eurozone inflation accelerated less-than-expected in April, indicating slower pace of price increase that may not be sufficient to avert the risk of deflation. Inflation rose to 0.7 percent in April from a 52-month low of 0.5 percent in March, flash estimates from Eurostat showed Wednesday. However, the rate was slightly slower than the 0.8 percent forecast by economists.