TSX Ends Higher On U.S. Fed Policy Decision - Canadian Commentary

(RTTNews) - Canadian stocks rallied to end higher Wednesday, after the U.S. Federal Reserve decided to continue its quantitative easing program unchanged. Nonetheless, the main index was impacted by some soft macroeconomic data out of the U.S. with private jobs rising less than expected in October.

As expected, the U.S. Federal Reserve on Wednesday voted to maintain its $85 billion per month asset purchase program with policy makers nervous about the health of the economy, fearing the recent government shutdown has hurt an already tepid recovery.

"Information received since the Federal Open Market Committee met in September generally suggests that economic activity has continued to expand at a moderate pace," a Fed statement said. In light of a string of disappointing economic data, most Fed watchers now anticipate the central bank will not begin tapering until some time in 2014.

In some soft economic news from the U.S., private sector jobs rose less than expected in October, largely reflecting the impact of the 16-day government shutdown. Meanwhile, consumer prices in the U.S. improved in line with estimates partly due to a rebound in energy prices, indicating inflation pressure remains subdued.

The S&P/TSX Composite Index closed Wednesday at 13,455.33, up 14.72 points or 0.11 percent. The index touched an intraday high of 13,471.06 and a low of 13,364.95.

The Diversified Metals & Mining Index gained 0.54 percent, with First Quantum Minerals Ltd. (FM.TO) gained 2.98 percent, Osisko Mining Corp. (OSK.TO) added 2.66 percent, and Lundin Mining Corp. (LUN.TO) ended flat at $4.71 a share. Teck Resources (TCK_B.TO) shed 1.01 percent.

The Capped Materials Index added 1.28 percent mostly on gold stocks, with Potash Corporation of Saskatchewan Inc.(POT.TO) shedding 0.15 percent.

The Global Gold Index gained 1.98 percent, with gold futures for December delivery, the most actively traded contract, moving up $3.80 or 0.3 percent to close at $1,349.30 an ounce Wednesday on the Nymex.

Among gold stocks, Goldcorp Inc. (G.TO) moved up 0.55 percent, while Barrick Gold Corp. (ABX.TO) added 4.06 percent. Kinross Gold Corp. (K.TO) gained 3.70 percent, while Eldorado Gold Corp. (ELD.TO) added 2.63 percent.

Yamana Gold Inc. (YRI.TO) gained 4.79 percent after reporting a third-quarter profit of $43.5 million or $0.06 per share, down from $60.0 million $0.08 per share last year. Adjusted earnings declined to $69.5 million or $0.09 per share from $177.6 million or $0.24 per share a year ago. Analysts expected earnings of $0.08 per share for the quarter.

B2Gold Corp. (BTO.TO) shed 1.10 percent after reporting that its gold revenues for the third-quarter totaled $128.7 million on sales of 93,429 ounces at an average realized price of $1,378 per ounce. Total gold production for the third quarter was 98,992 ounces at a consolidated operating cash cost of $653 per ounce, compared to budgeted total production of 95,427 ounces at a budgeted consolidated operating cash cost of $725 per ounce.

The Energy Information Administration's weekly oil report showed U.S. crude oil inventories to have surged 4.10 million barrels for the week ended October 25. This compares with analysts expectation of 3.5 million barrels gain in crude oil inventories.

The Energy Index dropped 0.45 percent, with U.S. crude oil futures for December delivery, the most actively traded contract, plunging $1.43 or 1.5 percent to close at $96.77 a barrel Wednesday on the Nymex.

Among energy stocks, Suncor Energy Inc.(SU.TO) inched down 0.03 percent, while Imperial Oil Limited (IMO.TO) shed 0.04 percent. Canadian Natural Resources Limited (CNQ.TO) dropped 0.95 percent, while Encana Corp. (ECA.TO) slipped 0.58 percent.

The Financial Index moved up 0.25 percent with Bank of Montreal (BMO.TO) down 1.46 percent, while Manulife Financial Corp. (MFC.TO) gained 1.86 percent. The Bank of Nova Scotia (BNS.TO) slipped 0.03 percent, while Toronto-Dominion Bank (TD.TO) improved 0.41 percent. National Bank of Canada (NA.TO) rose 0.46 percent, while Royal Bank of Canada (RY.TO) gathered 0.23 percent.

The Information Technology Index edged up 0.06 percent, with smartphone maker BlackBerry Limited (BB.TO) down 2.17 percent.

The Capped Industrials Index declined 0.08 percent, with Air Canada (AC.B.TO) gaining 4.0 percent, while Bombardier Inc. (BBD.A.TO, BBD.B.TO) slipped 0.75 percent.

Uranium producer Cameco Corp. (CCO.TO) reported third-quarter net earnings of C$211 million or C$0.53 per share, up from C$79 million, or C$0.20 per share last year. Adjusted earnings surged to C$208 million or C$0.53 per share from last year's C$49 million or C$0.12 per share a year ago. Cameco stock gained 4.58 percent.

In economic news, a report from payroll processor Automatic Data Processing, Inc. (ADP) on Wednesday showed U.S. private sector employment to have risen less than expected in October, partly reflecting the economic impact of the government shutdown. ADP said the private sector added 130,000 jobs in October following a downwardly revised increase of 145,000 jobs in September. Economists expected an increase of about 150,000 jobs compared to the addition of 166,000 jobs originally reported for the previous month.

Consumer prices in the U.S. rose in line with estimates in September, a report Labor Department report showed Wednesday. The consumer price index rose by 0.2 percent in September after inching up by 0.1 percent in August. The modest price growth matched economist estimates. The monthly increase in consumer prices was partly due to a rebound in energy prices, which rose 0.8 percent in September after dipping 0.3 percent in August.

Eurozone economic confidence improved for the sixth consecutive month in October, at its strongest level since mid-2011, driven by industrial and consumer sentiment, survey results from the European Commission showed Wednesday. The economic sentiment index rose more-than-expected to 97.8 from 96.9 in September, exceeding consensus score of 97.2.