TSX Ends Higher Despite Falling Commodity Prices -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a third straight session on Tuesday, after some upbeat housing start data from the U.S. and boosted by comments by European Central Bank officials on its asset purchases, even as commodity prices took a hit.

The market returned to trading following an extended week end after Monday's Victoria Day holiday.

Nevertheless, the uptick was only marginal as gains by the financial, healthcare, and information technology sectors, were largely offset by declines in mining, energy, gold and raw material stocks as commodity prices plunged.

Markets in Europe ended firmly in positive territory, as investor sentiment received a boost from some comments from European Central Bank officials.

ECB executive board member Benoit Coeure said the central bank will "frontload" its asset purchases in May and June to offset a lack of liquidity in the summer months. ECB governing council member Christian Noyer also suggested that the ECB may extend quantitative easing if necessary.

"The Eurosystem is ready to go further if necessary to deliver on its mandate of maintaining inflation close to but below 2%," Noyer stated.

Automakers are received a boost from Europe's car sales, which increased for the twentieth consecutive month in April.

Markets in the United States struggled to find direction, with the Dow ending at another new record closing high, while the S&P 500 and the Nasdaq settled lower.

Investors also weighed some upbeat U.S. data with new residential construction in the U.S. increasing substantially in April, with housing starts jumping to their highest level in over seven years.

The benchmark S&P/TSX Composite Index closed Tuesday at 15,121.02, up 12.90 points or 0.09 percent. The index scaled an intraday high of 15,159.08 and a low of 15,063.32.

On Friday, the index closed up 73.41 points or 0.49 percent, at 15,101.53. The index scaled an intraday high of 15,104.69 and a low of 14,990.72.

The Diversified Metals & Mining Index plunged 2.67 percent, as First Quantum Minerals Ltd. (FM.TO) plummeted 6.38 percent, Teck Resources Limited (TCK.B.TO) fell 4.15 percent, Lundin Mining Corp. (LUN.TO) dropped 2.27 percent, and Sherritt International Corp. (S.TO) dived 5.13 percent.

Turquoise Hill Resources (TRQ.TO) jumped 4.96 percent, after Oyu Tolgoi shareholders signed an agreement to progress the development of an underground mine.

Gold futures moved ended sharply lower after the after the dollar trended higher against a basket of select currencies after some upbeat economic news from the U.S. and on some comments by European Central Bank officials on its asset purchase.

The Gold Index dived 2.08 percent, after gold for June delivery plunged $20.90 or 1.7 percent to settle at $1,206.70 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Goldcorp Inc. (G.TO) shed 2.40 percent, Barrick Gold Corp. (ABX.TO) dipped 3.42 percent, Kinross Gold Corp. (K.TO) fell 1.96 percent, and Yamana Gold Inc. (YRI.TO) surrendered 1.67 percent.

Eldorado Gold Corp. (ELD.TO) shed 3.90 percent, while IAMGOLD Corp. (IMG.TO) lost 4.30 percent.

The Capped Materials Index dropped 1.14 percent, mainly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 1.31 percent and Agrium Inc. (AGU.TO) up 0.49 percent.

Agnico Eagle Mines Limited (AEM.TO) fell 1.29 percent, Franco-Nevada Corp. (FNV.TO) shed 0.50 percent, and Silver Wheaton Corp. (SLW.TO) declined 2.08 percent.

U.S. crude oil plunged to settle at its lowest for the month as the dollar soared against a basket of some major currencies, on comments from European Central Bank officials on its asset purchases.

The Energy Index shed 1.39 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, plummeting $2.17 or 3.7 percent, to settle at $57.26 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) dropped 1.23 percent, while Crescent Point Energy Corp. (CPG.TO) fell 1.98 percent. Cenovus Energy Inc. (CVE.TO) fell 1.44 percent, Canadian Natural Resources Limited (CNQ.TO) dipped 0.66 percent, and Canadian Oil Sands Limited (COS.TO) surrendered 3.33 percent.

Pacific Rubiales Energy Corp. (PRE.TO) shed 3.80 percent, while Legacy Oil + Gas (LEG.TO) dived 4.33 percent.

The heavyweight Financial Index jumped 1.08 percent, as Bank of Nova Scotia (BNS.TO) inched up 0.18 percent, Toronto-Dominion Bank (TD.TO) added 1.32 percent, and Royal Bank of Canada (RY.TO) gathered 1.66 percent. Canadian Imperial Bank of Commerce (CM.TO) added 0.67 percent.

National Bank of Canada (NA.TO) gained 0.51 percent, while Bank of Montreal (BMO.TO) moved up 0.37 percent.

The Capped Health Care Index soared 2.69 percent as Valeant Pharmaceuticals International Inc. (VRX.TO) jumped 3.26 percent, Concordia Healthcare Corp. (CXR.TO) gained 3.72 percent, and Catamaran Corp. (CCT.TO) moved up 1.74 percent.

ProMetic Life Sciences (PLI.TO) jumped 4.20 percent, after entering into a strategic manufacturing agreement with Emergent BioSolutions.

The Capped Industrials Index dipped 0.44 percent, as Finning International Inc. (FTT.TO) dropped 2.18 percent, Air Canada (AC.TO) added 1.74 percent, Canadian Pacific Railway Limited (CP.TO) fell 1.38 percent, and Canadian National Railway (CNR.TO) shed 0.51 percent.

Bombardier Inc. (BBD-A.TO) surrendered 2.24 percent.

The Information Technology Index moved up 1.28 percent, as Descartes Systems Group Inc. (DSG.TO) gained 2.37 percent, and Sierra Wireless, Inc. (SW.TO) added 2.78 percent.

BlackBerry Inc. (BB.TO) dipped 0.16 percent.

The Capped Telecommunication Index fell 0.18 percent, as Rogers Communications Inc. (RCI.B.TO) dropped 0.82 percent, TELUS Corp. (T.TO) inched up 0.10 percent, and BCE Inc. (BCE.TO) shed 0.30 percent.

Enerplus (ERF.TO) shed 5.98 percent, with the company announcing a cash dividend of C$0.05 per share.

On the economic front, new residential construction in the U.S. increased significantly in April, a report from the Commerce Department showed Tuesday, with housing starts jumping to their highest level in over seven years.

The report said housing starts surged up 20.2 percent to an annual rate of 1.135 million in April from the revised March estimate of 944,000. Economists expected housing starts to climb to a rate of 1.029 million from the 926,000 originally reported for the previous month.

The Commerce Department also said building permits increased 10.1 percent to an annual rate of 1.143 million in April from the revised March rate of 1.038 million. Building permits, an indicator of future housing demand, had been expected to climb to 1.070 million from the 1.039 million originally reported for the previous month.

German economic sentiment declined more-than-expected to a 5-month low in May, as the lackluster first quarter growth figure weighed on economic outlook, survey results from the Mannheim-based Centre for European Economic Research, or ZEW, showed Tuesday.

The ZEW Indicator of Economic Sentiment fell sharply to 41.9 from 53.3 in April. This was the lowest reading since December 2014. Economists had forecast a much smaller drop in the index to 49.

The number of persons in employment in Germany continued to increase in the first quarter, albeit at a slower pace, preliminary figures from Destatis showed Tuesday. Total number of employed persons in the country rose 0.7 percent, or by 275,000 persons, to 42.4 million in the first quarter from the corresponding period last year. In the fourth quarter, the increase was 0.9 percent.

Eurozone merchandise trade surplus increased notably in March from a year ago, as exports grew faster than imports, preliminary figures from Eurostat showed Tuesday. The unadjusted trade surplus advanced to EUR 23.4 billion in March from EUR 16.1 billion in the same month of the previous year.

Eurozone annual inflation remained flat in April as initially estimated after falling for four straight months, final data published by Eurostat showed Tuesday. Harmonized consumer prices fell 0.1 percent in March and 0.3 percent in February. The European Central Bank targets inflation below, but close to, 2 percent over the medium term.

U.K. inflation unexpectedly turned negative for the first time since 1960 on falling food and transport costs, official data showed Tuesday. Factory gate prices continued its downward trend reflecting lower crude prices.

Data from the Office for National Statistics showed that consumer prices fell 0.1 percent in April from last year, while it was forecast to remain flat as seen in March. This was the first annual fall since the official series started in 1996. Based on the comparable estimates, it was the first drop since 1960.

House price inflation in the U.K accelerated notably in March, after easing in the previous five months, the Office for the National Statistics said Tuesday. Average house prices climbed 9.6 percent year-over-year in March, faster than February's 7.4 percent growth, which was revised from a 7.2 percent rise estimated earlier.

Europe's car sales increased for the twentieth consecutive month in April, albeit at a slower pace, to log the strongest outcome for the month since 2009, data from the European Automobile Manufacturers Association showed Tuesday. All major markets contributed to growth during the month.

Demand for new passenger cars grew 6.9 percent year-over-year in April, which was slower than the 10.6 percent rise in the preceding month.