TSX Ends Higher On Energy Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply higher for a third straight session on Thursday, led by energy stocks despite oil prices ending slightly lower. However, the gains were capped as mining stocks plummeted with gold prices continuing to slide.

The majority of the European markets ended in the green, although concerns over the volatility in the Chinese market lingered. China's benchmark Shanghai Composite index ended lower by 2.20 percent today after rallying more than 3 percent in early trade.

Investors also contended a large number of corporate earnings reports and yesterday's statement from the Federal Reserve. Some weak German labor data also raised some concerns.

Markets in the United States were under pressure in the morning, but the Nasdaq and S&P 500 recovered to end on positive ground, with the Dow ending a tad lower.

Renewed uncertainty over the outlook for interest rates weighed on markets after the Federal Reserve was noncommittal in yesterday's monetary policy statement. The statement included some subtle changes that point toward a near-term interest rate hike, but the Fed did not provide a specific timetable.

Economic activity in the U.S. increased in the second quarter but less than expected, a Commerce Department report revealed Thursday. The report also showed a notable upward revision to the data for the first quarter.

U.S. real gross domestic product increased at an annual rate of 2.3 percent in the second quarter compared to expectations for an increase of about 2.6 percent. First quarter GDP rose by an upwardly revised 0.6 percent compared to the 0.2 percent contraction previously reported.

Meanwhile, first-time claims for U.S. unemployment benefits rebounded in the week ended July 25, a Labor Department report showed Thursday, with claims bouncing off the more than forty-year low set in the previous week.

The benchmark S&P/TSX Composite Index closed Thursday at 14,382.76, up 80.96 points or 0.57 percent. The index scaled an intraday high of 14,386.75 and a low of 14,226.57.

On Wednesday, the index closed up 224.44 points or 1.59 percent, at 14,301.80. The index scaled an intraday high of 14,303.81 and a low of 14,059.28.

Gold futures ended lower as the dollar strengthened after a slightly dovish Federal Reserve statement failed to give the precious metal any momentum.

The Gold Index fell 2.71 percent, with gold for August delivery dropping $4.60 or 0.4 percent, to settle at $1,088.70 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) fell 2.35 percent, IAMGOLD Corp. gained 0.59 percent, Yamana Gold Inc. (YRI.TO) plummeted 7.75 percent, B2Gold Corp. (BTO.TO) dived 6.90 percent, and Lake Shore Gold Corp. (LSG.TO) shed 2.61 percent..

Kinross Gold Corp. (K.TO) plunged 4.70 percent, after reporting a net loss of $83.2-million, or $0.07 a share, compared with net earnings of $46-million, or $0.04 a share, for the comparable 2014 period. The company also indicated it may also be cutting more jobs.

Goldcorp Inc. (G.TO) fell 1.38 percent, despite reporting a second quarter profit that topped expectations by a penny per share.

The Capped Materials Index dived 1.70 percent, as Agrium Inc. (AGU.TO) moved up 2.11 percent, and Agnico Eagle Mines Limited (AEM.TO) plunged 7.13 percent.

Potash Corp. of Saskatchewan Inc. (POT.TO) added 1.12 percent, after the company's second quarter earnings came in at $0.50 per share, missing the consensus estimate of $0.51 per share. Potash Corp. also revised its full year forecast.

Crude oil futures ended lower on a strong dollar after some encouraging economic activity data from the U.S. and renewed concerns of a supply glut in the near future.

The Energy Index soared 2.89 percent, although U.S. crude oil futures for September delivery, the most actively traded contract, shedding $0.27 or 0.6 percent, to settle at $48.52 a barrel on the New York Mercantile Exchange Thursday.

Cenovus Energy Inc. (CVE.TO) added 2.10 percent, after reporting its second quarter earnings dropped to $0.15 per share from $0.81 per share last year. Cenovus also revealed plans for additional staff reductions at its field operations early 2016.

Suncor Energy Inc. (SU.TO) surged 6.33 percent, after reporting its second quarter earnings rose to C$0.50 per share from C$0.14 per share in the previous year.

Among other energy stocks, Canadian Natural Resources Limited (CNQ.TO) moved up 2.99 percent, Crescent Point Energy Corp. (CPG.TO) added 4.02 percent, and Enbridge Inc. (ENB.TO) added 1.46 percent.

Encana Corp. (ECA.TO) dipped 0.99 percent, Canadian Oil Sands Limited (COS.TO) added 3.25 percent, Husky Energy Inc. (HSE.TO) moved up 1.06 percent, and Pacific Rubiales Energy Corp. (PRE.TO) gained 1.39 percent.

The Diversified Metals & Mining Index plummeted 5.02 percent, as Teck Resources Limited (TCK-B.TO) fell 3.52 percent, Lundin Mining Corp. (LUN.TO) slid 4.24 percent, and Capstone Mining Corp. (CS.TO) dived 5.26 percent.

First Quantum Minerals Ltd. (FM.TO) plummeted 10.44 percent, after reporting reported second quarter comparative earnings of $0.03 per share, sharply down from $0.26 per share last year.

HudBay Minerals (HBM.TO) plunged 8.18 percent after reporting a loss of $55.2 million or $0.24 per share, compared to net income of $0.3 million or nil per share.

Sherritt International Corp. (S.TO) plunged 10.19 percent, after having surged 16.30 percent yesterday following the announcement of its results.

The heavyweight Financial Index moved up 0.32 percent, as National Bank of Canada (NA.TO) gathered 0.26 percent, Bank of Montreal (BMO.TO) added 0.27 percent, and Royal Bank of Canada (RY.TO) inched up 0.13 percent.

Canadian Imperial Bank of Commerce (CM.TO) gained 0.69 percent, Bank of Nova Scotia (BNS.TO) advanced 0.76 percent, and Toronto-Dominion Bank (TD.TO) inched up 0.06 percent.

The Capped Health Care Index inched up 0.13 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) moved up 0.32 percent, and Concordia Healthcare Corp. (CXR.TO) shed 0.67 percent.

The Capped Information Technology Index jumped 2.16 percent, as BlackBerry Limited (BB.TO) fell 0.48 percent, Descartes Systems Group (DSG.TO) added 0.98 percent, and Constellation Software Inc. (CSU.TO) dropped 3.26 percent. CAE Inc. (CAE.TO) added 0.81 percent.

Avigilon Corp. (AVO.TO) dived 5.42 percent, after reporting second quarter earnings of $0.05 per share, down from $0.06 per share in the prior year.

The Capped Telecommunication Index gained 1.27 percent, as Rogers Communication (RCI-B.TO) added 0.62 percent, TELUS Corp. (T.TO) gained 0.75 percent, Manitoba Telecom Services Inc. (MBT.TO) jumped 3.09 percent, and BCE Inc. (BCE.TO) gathered 0.66 percent.

The Capped Industrials Index added 0.55 percent, as Bombardier (BBD.B.TO) plummeted 9.74 percent, after its second quarter adjusted earnings dropped to $0.06 per share from $0.10 per share last year. Yesterday, the Wall Street Journal had reported that the company is involved in early talks with Germany's Siemens to merge their rail businesses.

Among other industrial stocks, Canadian Pacific Railway Limited (CP.TO) added 0.43 percent, Canadian National Railway Company (CNR.TO) climbed 0.69 percent, and Air Canada (AC.TO) gathered 0.59 percent.

On the economic front, Statistics Canada reported Thursday morning that Canadian average weekly employee earnings were down 0.6 percent month over month in May. On a year over year basis, earnings were up 1.4 percent. That was the weakest growth rate since October of 2013.

First-time claims for U.S. unemployment benefits rebounded in the week ended July 25, with claims climbing to 267,000, an increase of 12,000 from the previous week's unrevised level of 255,000. Economists expected claims to rise to about 272,000.

Eurozone economic confidence rose unexpectedly to a four-year high in July and businesses became more upbeat after the threat of Grexit diminished, survey results from European Commission showed Thursday.

The economic sentiment index climbed to 104 in July. A similar reading was last seen in the same month of 2011 and a higher score of 106 was recorded in June that year. Economists had forecast the indicator to fall marginally to 103.2 from 103.5 in June.

German unemployment increased unexpectedly in July, reports said citing data from the Federal Labor Agency on Thursday. The number of unemployed rose 9,000 in July from June, confounding expectations for a decline of 5,000.

The jobless rate remained unchanged at a seasonally adjusted 6.4 percent in July. The rate came in line with expectations.

Germany's unemployment rate held steady in June, figures from Destatis showed Thursday. The jobless rate came at an adjusted 4.7 percent in June, the same rate as in the previous month. In the corresponding month last year, the rate was 5.0 percent.

German inflation slowed to a 5-month low in July as energy prices declined further, preliminary data from Destatis showed Thursday. Consumer price inflation eased marginally to 0.2 percent in July from 0.3 percent in June. This was the lowest rate since February, when it was 0.1 percent. Inflation was expected to remain at 0.3 percent.