TSX Ends Lower As Commodity Prices Drop -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Tuesday, dragged down by resource stocks as commodity prices continued to dip, and on some weak earnings report from Bank of Montreal and the U.S. Federal Reserve Chief's testimony before the Congress.

All major European markets ended higher after the European Commission said the economic reform proposals submitted by the Greek government were satisfactory to start work on concluding the review of the bailout funding program. Earlier in the day, Eurogroup President Jeroen Dijsselbloem confirmed that Greece presented its reform proposal 'yesterday in time' and that they were being assessed to grant 4-month extension.

Markets in the United States, though choppy earlier in the day, ended in positive territory on some mixed data and on Yellen's testimony before the Congress.

In economic data from the U.S., the S&P Case-Shiller report came in stronger than anticipated, but the consumer confidence report fell short of expectations.

Federal Reserve Chair Janet Yellen stated the Federal Reserve may change language in its forward guidance indicating that policy makers will be "patient" before raising rates, but that does not mean that tightening is imminent. However, indications were such assurances may be dropped before the rate hikes come.

"The FOMC's assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings," Yellen said in a prepared statement.

The benchmark S&P/TSX Composite Index closed Tuesday at 15,164.97, down 35.29 points or 0.23 percent. The index scaled an intraday high of 15,274.99 and a low of 15,150.70.

On Monday, the index closed up 28.02 points or 0.18 percent, at 15,200.26. The index scaled an intraday high of 15,220.59 and a low of 15,120.75.

The Health Care Index added 0.35 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) inching up 0.60 percent, having surged 15.05 percent yesterday, after the Canadian drug maker agreed to acquire Salix Pharmaceuticals for $158.00 per share in cash. Salix Pharma is valued at about $14.5 billion including net debt.

Among other healthcare stocks, Extendicare Inc. (EXE.TO) moving up 0.44 percent, and Catamaran Corp. (CCT.TO) down 0.20 percent.

Gold futures ended lower, but came off off their lows for the day after Federal Reserve Chief Janet Yellen's testimony before the Congress, which analysts see as less damaging to the precious metal.

The Gold Index dropped 1.22 percent, with gold for April delivery shedding $3.50 or 0.3 percent to settle at $1,197.30 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Yamana Gold (YRI.TO) gained 2.02 percent and Goldcorp (G.TO) dropped 1.48 percent. IAMGOLD (IMG.TO) plunged 5.35 percent and Barrick Gold (ABX.TO) dived 6.00 percent. Eldorado Gold (ELD.TO) surrendered 1.20 percent.

The Capped Materials Index moved up 0.32 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.52 percent.

Agrium Inc. (AGU.TO) gained 2.96 percent after reporting fourth quarter adjusted net earnings from continuing operations of $0.77 per share late Monday, topping the consensus estimate of $0.60 per share.

Crude oil ended slightly lower for a fifth straight day, ahead of the official weekly oil inventories report from the U.S. Energy Information Administration.

The Energy Index dropped 0.34 percent with U.S. crude oil futures for April delivery, shedding $0.17 or 0.3 percent to settle at $49.28 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) slipped 3.02 percent, Canadian Oil Sands (COS.TO) gained 3.60 percent, Penn West Petroleum Ltd. (PWT.TO) fell 4.94 percent and Encana Corp. (ECA.TO) dropped 1.51 percent.

Canadian Natural Resources Limited (CNQ.TO) inched up 0.40 percent, while Crescent Point Energy (CPG.TO) added 2.05 percent. Cenovus Energy Inc. (CVE.TO) shed 0.45 percent, while Talisman Energy (TLM.TO) dropped 1.22 percent. Bankers Petroleum (BNK.TO) added 1.99 percent.

The Diversified Metals & Mining Index jumped 3.43 percent, as Sherritt International Corp. (S.TO) gained 4.60 percent, First Quantum Minerals Ltd. (FM.TO) surged 7.72 percent, Teck Resources (TCK-B.TO) added 2.84 percent, and HudBay Minerals (HBM.TO) gathered 3.46 percent. Finning International Inc. (FTT.TO) gained 1.97 percent, while Lundin Mining Corp. (LUN.TO) added 2.98 percent.

The heavyweight Financial Index dropped 0.22 percent, as Bank of Montreal (BMO.TO) shed 1.95 percent. The banking giant dropped 1.95 percent, after reporting first quarter adjusted earnings of C$1.53 per share, compared to C$1.61 per share in the year-ago quarter. Analysts expected earnings of C$1.63 per share for the quarter.

Among other major banks, National Bank of Canada (NA.TO) fell 0.32 percent, Royal Bank of Canada (RY.TO) shed 0.11 percent, and Toronto-Dominion Bank (TD.TO) surrendered 0.50 percent. Bank of Nova Scotia (BNS.TO) fell 1.12 percent, while Canadian Imperial Bank of Commerce (CM.TO) gained 0.74 percent.

The Capped Industrials Index inched up 0.03 percent, with Bombardier Inc. (BBD.B.TO) soaring 6.38 percent and Air Canada (AC.TO) adding 0.79 percent.

Canadian Pacific Railway (CP.TO) dropped 0.97 percent, even as it announced it intends to renew its share repurchase program.

Canadian National Railway (CNR.TO) slipped 0.15 percent, even as it announced a negotiated a tentative labor agreement with the Unifor union. As a result, CN has withdrawn its lockout notice to Unifor, which would have come effective at 23.00 hours local time in the absence of a settlement.

The Information Technology Index dropped 1.12 percent, as BlackBerry Limited (BB.TO) gained 0.87 percent, Constellation Software (CSU.TO) moved up 0.80 percent, and Descartes Systems Group Inc. (DSG.TO) shed 0.41 percent.

The Capped Telecommunication Index surrendered 0.94 percent, with BCE down 1.16 percent, TELUS Corp. (T.TO) slipping 1.19 percent, and Rogers Communications Inc. (RCI.B.TO) shedding 0.96 percent.

Domtar (UFS.TO) gained 0.24 percent, after its Board of Directors approved a 7 percent increase to its quarterly dividend and also authorized an increase of $300 million in share buyback program.

On the economic front, home prices in major metropolitan areas unexpectedly grew at a faster annual rate in December, a report from Standard & Poor's showed Tuesday. The S&P/Case-Shiller 20-City Composite Home Price Index rose 4.5 percent year-over-year in December compared to a 4.3 percent increase in November. Economists expected the pace of growth to slow to 4.2 percent.

After reporting a sharp increase in U.S. consumer confidence in the previous month, the Conference Board's report on Tuesday showed consumer confidence index to have pulled back more than expected in February. The index tumbled to 96.4 in February from an upwardly revised 103.8 in January. Economists expected the index to drop to a reading of 99.1 from the 102.9 originally reported for the previous month.

Eurozone harmonized consumer prices declined the most since July 2009 as initially estimated at the start of 2015, final data from Eurostat showed Tuesday. The harmonized index of consumer prices in the 19-nation currency bloc fell 0.6 percent year-on-year in January, following a 0.2 percent drop in December. This was in line with the flash estimate published on January 30. This was the second consecutive fall in prices and the lowest since July 2009.

The German economy gained momentum towards the end of 2014 as initially estimated driven by foreign demand and household spending, detailed results published by Destatis showed Tuesday. Gross domestic product grew 0.7 percent in the fourth quarter from last quarter, when it was up 0.1 percent. The sequential growth came in line with the preliminary estimate published on February 13.

Germany's leading index increased for the second straight month in December, a survey by the Conference Board showed. The leading index climbed 0.7 percent in December, the same rate as in the previous month. In October, the index had dropped 0.1 percent.

French business confidence fell marginally in February, matching the score expected by economists, survey data from the statistical office Insee showed Tuesday. The business confidence index for manufacturers decreased to 99 in February from a revised score of 100 in January. This was in line with the consensus estimate.

The leading index for France, which measures the future economic activity, remained unchanged in December, after falling in the previous month, a survey by the Conference Board showed. The leading economic index showed no variation in December, following a revised 0.1 percent fall in November.