TSX Ends Flat As U.S. Woes Continue - Canadian Commentary

(RTTNews) - Canadian stocks settled a tad lower Friday, led mostly by gold stocks with bullion prices down sharply, with pressure from Potash Corporation after the fertilizer producer slashed its earnings outlook for the third quarter. Investors also monitored the developments in the U.S., amid optimism that a deal on the debt-ceiling may soon be reached, even as the partial government shutdown continued for a 11th day.

After days of deadlock, key Republicans led by House Speaker John Boehner held discussions for 90 minutes at the White House, albeit without any consensus. Nonetheless, the two sides said they would continue talks in an effort to reopen the government and raise the nation's debt limit. Investors expect some sort of resolution to the fiscal deadlock by the end of the week.

The S&P/TSX Composite Index closed Thursday at 12,892.11, down 2.30 points or 0.02 percent. The index touched an intraday high of 12,924.89 and a low of 12,874.09. The main index added over 200 points or 1.5 percent in the past two sessions.

The Diversified Metals & Mining Index edged up 0.01 percent, with First Quantum Minerals Ltd. (FM.TO) adding 0.05 percent, Teck Resources Limited (TCK.B.TO) up 1.61 percent, and Lundin Mining Corp. (LUN.TO) up 0.22 percent. Osisko Mining Corp. (OSK.TO) slipped 3.85 percent.

The Capped Materials Index dived 1.76 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) dropping 1.55 percent.

Potash Corp. slashed its third-quarter 2013 earnings outlook to about $0.41 per share, from its previous estimate in the range of $0.45-$0.60 per share. Analysts currently expect earnings of $0.46 per share for the third quarter. The change primarily reflects lower than forecast potash sales volumes late in the quarter as buyers continued to defer significant purchases amidst near-term market uncertainty.

The Global Gold Index plummeted 3.09 percent, with gold futures for December delivery plunging $28.70 or 2.2 percent to close at $1,268.20 an ounce Friday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) dropped 3.26 percent, while Barrick Gold Corp. (ABX.TO) shed 3.94 percent. Goldcorp Inc. (G.TO) dropped 3.05 percent, while Kinross Gold Corp. (K.TO) shed 1.64 percent, Eldorado Gold Corp. (ELD.TO) plunged 4.76 percent.

Crude oil ended lower Friday, mostly on demand growth concerns with U.S. crude stockpiles surging four times than expected and the International Energy Agency raising its supply forecast while lifting its demand outlook for 2013.

The Energy Index gained 0.46 percent, although U.S. crude oil futures for November delivery dropped $0.99 or 1.0 percent to close at $102.02 a barrel Friday on the Nymex.

Among energy stocks, Suncor Energy Inc.(SU.TO) slipped 0.22 percent, while Enbridge Inc.(ENB.TO) added 0.54 percent. Imperial Oil Limited (IMO.TO) gathered 1.05 percent, while Encana Corp. (ECA) added 2.06 percent. Talisman Energy Inc. (TLM.TO) dropped 0.16 percent.

The Financial Index moved up 0.43 percent with Bank of Montreal (BMO.TO) adding 0.47 percent, while Manulife Financial Corp. (MFC.TO) gained 0.51 percent. The Bank of Nova Scotia (BNS.TO) added 0.30 percent, while Toronto-Dominion Bank (TD.TO) gathered 0.23 percent. Royal Bank of Canada (RY.TO) rose 0.50 percent, while National Bank of Canada (NA.TO) gained 0.35 percent.

The Information Technology Index added 0.40 percent, with smartphone maker BlackBerry Limited (BB.TO) dropping 1.65 percent.

The Capped Industrials Index surrendered 0.44 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) gaining 1.02 percent and Air Canada (AC.B.TO) up 1.43 percent.

Broadband wireless solutions provider Redline Communications Group Inc. (RDL.TO) plunged 14.29 percent after announcing that Eric Melka, its chief executive officer currently on medical leave, has indicated his plan to leave the company by February 2014.

American Bonanza Gold (BZA.TO) plummeted 55.56 percent after indicating on Friday that it is placing the Copperstone Mine in Arizona on care and maintenance status until further notice.

In economic news Statistics Canada said the economy created 11,900 jobs in September, while the unemployment rate declined 0.2 percentage points to 6.9 percent as fewer youths searched for work. Economists expected 10,000 job creations last month. However, employment was up 212,000 or 1.2 percent compared with 12 months earlier.

In other economic news, a Thomson Reuters and University of Michigan report showed U.S. consumer sentiment to have deteriorated in October, reflecting the impact of the ongoing government shutdown. A preliminary reading on the index for October came in at 75.2 compared to the final September reading of 77.5. The index declined for the third consecutive month, at its lowest level since January.

From the eurozone, Germany's EU harmonized inflation stayed unchanged in September as estimated earlier, final figures released by the Federal Statistical Office showed. The harmonized index of consumer prices (HICP) increased 1.6 percent year-on-year in September, which was unchanged from the growth rate seen in August. The September outcome was also in line with the preliminary estimates.

Meanwhile, Germany's wholesale prices declined for the second consecutive month in September, official data showed. Wholesale prices declined 2.2 percent year-on-year in September, which was the biggest fall since November 2009, Destatis said. The decline was faster than the 1.7 percent fall seen in August.