TSX Ends Higher Despite Disappointing Data -- Canadian Commentary

(RTTNews) - Canadian stocks moved up for a eleventh straight day to end at a three-year high on Wednesday, driven by gains in the energy and financial sectors, even as investors largely ignored some disappointing domestic and U.S. economic data. This is longest winning streak for the main index since 1995.

Gains have been modest on most days, with markets increasingly hopeful that ultra-easy monetary policy from the world's biggest central banks will continue through 2014.

On the economic front, Canada's wholesale trade for December dropped sharply to a a six-month low, after five of the seven wholesale sub-sectors declined.

From the U.S., the pace of new home building projects fell sharply in January, a new government report showed on Wednesday. Severe winter weather may have impacted the statistics. Building permits, a measure of future building activity, also dropped during the month, though the fall was far less steep.

Meanwhile, wholesale inflation in the U.S. picked up slightly in January, new government statistics showed Wednesday, in line with expectations and well within a range that indicates that inflation pressures remain under control. The report included a new computing structure, with attempts to paint a broader picture of how prices are moving in the economy.

The S&P/TSX Composite Index closed Wednesday at 14,119.73, up 42.26 points or 0.30 percent. The index scaled an intraday high of 14,174.27 and a low of 14,077.47.

The main index jumped about 5 percent in last 11 days and is trading at the highest level since 2011

Gold futures snapped a nine-day gain to end lower with the dollar trending higher against a basket of some select currencies, but recouped some of the losses after some disappointing data from the U.S.

The Global Gold Index dived 2.06 percent, with gold futures for April delivery, the most actively traded contract, shedding $4.00 or 0.3 percent to close at $1,320.40 an ounce Wednesday on the Nymex.

Among gold stocks, Barrick Gold Corp. (ABX.TO) dropped 1.75 percent, Detour Gold Corp. (DGC.TO) dived 4.94 percent, and Kinross Gold Corp. (K.TO) fell 1.94 percent. Goldcorp Inc. (G.TO) surrendered 2.80 percent.

Yamana Gold Inc. (YRI.TO) dropped 1.74 percent, after reporting a fourth-quarter net loss due mainly to a $535.8-million after-tax impairment charge.

The Capped Materials Index dropped 1.14 percent, although Potash Corp. of Saskatchewan Inc. (POT.TO) up 1.22 percent.

The Energy Index gained 1.00 percent, with U.S. crude oil futures for March delivery, the most actively traded contract, gaining $0.88 or 0.9 percent to close at $103.31 a barrel Wednesday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) added 3.70 percent, after indicating that it would acquire a part of Devon Energy Corp.'s natural gas assets in Canada for C$3.13 billion or US$2.86 billion.

Talisman Energy Inc. (TLM.TO, TLM) added 2.60 percent, while Encana Corp. (ECA.TO, ECA) gathered 1.39 percent. Cenovus Energy Inc. (CVE.TO) added 0.42 percent, while Suncor Energy Inc. (SU.TO) moved up 1.01 percent.

The heavyweight Financial Index added 0.57 percent with Royal Bank of Canada (RY.TO) up 1.32 percent and the Bank of Nova Scotia (BNS.TO) up 0.52 percent. Bank of Montreal (BMO.TO) added 0.78 percent, while Toronto-Dominion Bank (TD.TO) gained 0.55 percent.

The Diversified Metals & Mining Index shed 0.69 percent, with Lundin Mining Corp. (LUN.TO) down 1.88 percent, and First Quantum Minerals (FM.TO) down 0.98 percent. Teck Resources Limited (TCK.B.TO) dropped 0.27 percent.

The Information Technology Index surrendered 0.34 percent, with BlackBerry Limited (BB.TO) down 3.57 percent.

The Capped Industrials Index added 0.43 percent, with Bombardier Inc. (BBD.B.TO) up 0.85 percent, after the transport systems maker signed a contract to build new trains and a depot for London's Crossrail project, valued at US$2.1 billion.

Mining firm Sherritt International Corp (S.TO) plunged 11.95 percent after posting a bigger fourth-quarter loss due to an huge impairment charge.

In economic news, Canada's wholesale trade for December dropped 1.4% to $49.6 billion. This is at a a six-month low, with five of the seven wholesale sub-sectors down - the five sub-sectors account for 79 percent of wholesale sales.

In economic news from the U.S., the pace of new home building projects fell sharply in January, according to government figures released on Wednesday. Severe winter weather may have impacted the statistics. The Commerce Department said housing starts dropped 16 percent to an annual rate of 880,000. This included a 15.9 percent drop in new construction on single-family homes. Economists expected a drop, but at about 950,000 homes. The housing starts figure is 2 percent below the pace seen in January of 2013. The stats for December was revised upward to 1.048 million homes, compared to the rate of 999,000 originally reported.

Building permits, a measure of future building activity, also dropped during January, though the fall was far less steep. The figure fell 5.4 percent in January to a pace of 937,000.

Meanwhile, a Labor Department report showed wholesale inflation in the U.S. picked up slightly in January, advancing 0.2 percent in January compared to the previous month. This was a slightly faster pace than was seen in December, when the figure showed a 0.1 percent increase. Economists had expected the figure to rise by 0.2 percent.

Producer prices in the U.S. advanced 0.2 percent in January compared to the previous month. Compared with last year, producer prices were up 1.2 percent, a slight pick up from the previous month's pace of 1.1 percent.

From Europe, unemployment rate in U.K. rose unexpectedly in December, arresting the continuous decline seen since early last year that took the rate close to the Bank of England's 7 percent threshold. The ILO unemployment rate climbed to 7.2 percent in the December quarter from 7.1 percent in the three months to November. The increase was the first since February last year, when it was 7.9 percent. Economists expected the rate to remain unchanged at 7.1 percent in the fourth quarter.