TSX Ends Higher After Fed Moves To Taper - Canadian Commentary

(RTTNews) - Canadian stocks ended at a two-week high Thursday, a day after recording the biggest one-day gain in over two months, which came with the U.S. Federal Reserve's move to scale back its asset purchase program beginning January. The main index reacted positively with investors viewing the Fed move as signs of recovery in the world's largest economy.

The Federal Reserve on Wednesday tapered its massive bond-buying program by $10 billion to $75 billion per month, citing recent improvement in the U.S. jobs market. Beginning in January, the Fed will buy mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month.

The S&P/TSX Composite Index closed Thursday at 13,392.20, up 57.47 points or 0.43 percent. The index scaled an intraday high of 13,396.62 and a low of 13,122.87.

The Energy Index gained 0.74 percent, with U.S. crude oil futures for February delivery, the most actively traded contract, adding $0.98 or 1.0 percent to close at $99.04 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) added 1.74 percent while Suncor Energy Inc. (SU.TO) added 0.22 percent. Talisman Energy Inc. (TLM.TO) gathered 1.72 percent, while Encana Corp. (ECA.TO) added 1.00 percent.

The Information Technology Index added 1.33 percent, although smartphone maker BlackBerry Limited (BB.TO) jumping 3.09 percent.

The Diversified Metals & Mining Index jumped 2.80 percent, with First Quantum Minerals Ltd. (FM.TO) up 1.93 percent, Lundin Mining Corp. (LUN.TO) gaining 3.57 percent, and Teck Resources Limited (TCK.B.TO) up 3.72 percent. However, Osisko Mining Corp. (OSK.TO) slipped 2.15 percent.

The Capped Materials Index slipped 0.37 percent. Fertilizer maker, Potash Corp. (POT.TO) dipped 0.06 percent, while Agrium Inc. (AGU.TO) moved up 0.51 percent.

The Global Gold Index fell 1.92 percent, with gold futures for February delivery, the most actively traded contract, plummeting $41.40 or 3.4 percent to close at $1,193.60 an ounce Thursday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) slipped 2.29 percent, while Barrick Gold Corp. (ABX.TO) dropped 2.21 percent. Yamana Gold Inc. (YRI.TO) surrendered 1.85 percent.

The Financial Index gained 0.79 percent with Bank of Montreal (BMO.TO) up 0.37 percent, Royal Bank of Canada (RY.TO) adding 1.05 percent, the Bank of Nova Scotia (BNS.TO) up 0.19 percent, and Toronto-Dominion Bank (TD.TO) gaining 0.55 percent.

The Capped Industrials Index added 0.72 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) gaining 1.09 percent.

Asset management company Carfinco Financial Group Inc. (CFN.TO) dropped 2.15 percent after announcing that it will not be acquiring, the new equity ownership interests of Western Funding Incorporated and Global Track GPS LLC headquartered in Las Vegas, Nevada. On November 1, Carfinco had announced that it had become the 'stalking horse bidder' and proposed plan sponsor for Western Funding and Global Track.

Metals mining company New Millennium Iron Corp. (NML.TO) dropped 1.56 percent after naming Robert Patzelt President and Chief Executive Officer with effect from January 13, 2014.

In economic news, initial claims for U.S. unemployment benefits unexpectedly saw some further upside in the week ended December 14. A Labor Department report on Thursday showed initial jobless claims climbed to 379,000, an increase of 10,000 from 369,000 reported the previous week. The revised figures showed an increase of 64,000 in the previous week. Economists expected jobless claims to drop to 337,000 from the 368,000 originally reported for the previous week.

Existing home sales in the U.S. fell more than expected in November, a report from the National Association of Realtors showed Thursday. Existing home sales dropped 4.3 percent to a seasonally adjusted annual rate of 4.90 million in November, after falling 3.2 percent to 5.12 million in October. Economists expected sales to dip to an annual rate of 5.02 million.

The Commerce Department said housing starts in the U.S. surged up 22.7 percent to a seasonally adjusted annual rate of 1.091 million in November from a rate of 889,000 in October. Economists had expected housing starts to come in at an annual rate of 955,000.

A Federal Reserve Bank of Philadelphia report on Thursday showed regional manufacturing activity grew at a slightly faster rate in December, although the index of activity in the sector rose much lesser than expected. The Philly Fed diffusion index of current activity edged up to 7.0 in December from 6.5 in November. A positive reading indicates an increase in regional manufacturing activity, but economists expected the index to climb to 10.0.

Meanwhile, the Conference Board report showed its index of leading U.S. economic indicators rose slightly more than expected in November. The leading economic index rose 0.8 percent in November after edging up 0.1 percent in October and jumping 1.0 percent in September. Economists expected the index to increase by 0.7 percent.

Elsewhere, policymakers of the Bank of England unanimously decided to maintain the interest rate at 0.50 percent and quantitative easing at GBP 375 billion, the minutes of the meeting held on December 4 and 5 showed.

British retail sales rebounded in November, data from the Office for National Statistics revealed. Sales volume, including auto fuel, rose 0.3 percent month-on-month in November, recovering from a revised 0.9 percent drop in October. The outcome was in line with expectations.