TSX Ends Lower As Commodity Prices Drop -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day gain to end lower on Thursday, as metal, mining and energy stocks stumbled after commodity prices dropped, even as most global equity markets ended higher.

Markets in Europe ended in positive territory on optimism for a Greek debt deal. Germany has indicated that it will endorse the Greek cause if the nation accedes to at least one of the economic reform proposals sought by its international creditors.

However, there appear to be much more obstacles after news reports said the International Monetary Fund and Greece have abruptly ended their talks on the beleaguered country's financial debt problems, citing lack of progress.

Meanwhile, markets in the United States ended firmly in positive territory with investors cheering the strong retail sales numbers for May.

Retail sales in the U.S. showed a notable increase in the month of May, a report from the Commerce Department showed Thursday. U.S. retail sales jumped by 1.2 percent in May, in line with economists' consensus estimate.

However, first-time claims for U.S. unemployment benefits increased more than expected last week after reporting a modest decrease in in the previous week, a Labor Department report said Thursday.

The benchmark S&P/TSX Composite Index closed Thursday at 14,830.88, down 58.16 points or 0.39 percent. The index scaled an intraday high of 14,921.47 and a low of 14,810.66.

On Wednesday, the index closed up 71.33 points or 0.48 percent, at 14,889.04. The index scaled an intraday high of 14,953.03 and a low of 14,843.48.

Crude oil futures lower as the dollar strengthened on some upbeat U.S. retail sales data for May, even as the International Energy Agency's provided its monthly oil report on demand growth and supply.

The IEA lifted its growth estimate for oil, indicating demand to rise by 1.4 million barrels a day, for an average of 94 million barrels for the year. This is up from its previous projection as economic growth, extreme cold and lower prices have helped lift consumption in the first half of 2015. The agency also indicated that supply growth will remain strong with increasing competition for market share.

The U.S. Energy Information Administration on Wednesday said U.S. crude oil inventories dropped 6.8 million barrels in the week ended June 5, while analysts expected a decline of 1.6 million barrels.

The Energy Index fell 1.08 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, dropping $0.66 or 1.1 percent, to settle at $60.77 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Suncor Energy Inc. (SU.TO) fell 1.96 percent, while Crescent Point Energy Corp. (CPG.TO) shed 0.58 percent. Encana Corp. (ECA.TO) slipped 0.98 percent, and Canadian Natural Resources Limited (CNQ.TO) fell 1.00 percent.

Canadian Oil Sands Limited (COS.TO) shed 1.54 percent, while Pacific Rubiales Energy Corp. (PRE.TO) fell 1.57 percent. Cenovus Energy (CVE.TO) dropped 1.65 percent, while Enbridge Inc. (ENB.TO) shed 0.65 percent.

Gold futures settled lower with the dollar trending higher after an upbeat U.S. retail sales data in May sparking speculations of an interest rate hike by the Federal Reserve later this year.

The Gold Index declined 1.62 percent, with gold for August delivery shedding $6.20 or 0.5 percent to settle at $1,180.40 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 1.70 percent, Barrick Gold Corp. (ABX.TO) fell 2.67 percent, Kinross Gold Corp. (K.TO) dived 5.03 percent, IAMGOLD Corp. (IMG.TO) shed 0.35 percent, while Eldorado Gold Corp. (ELD.TO) surrendered 3.96 percent. Detour Gold Corp. (DGC.TO) dropped 0.68 percent.

The Capped Materials Index dived 1.46 percent, with Agrium Inc. (AGU.TO) up 0.27 percent. Agnico Eagle Mines Limited (AEM.TO) fell 1.08 percent, while Franco-Nevada Corp. (FNV.TO) slipped 0.10 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) slipped 0.61 percent.

The Diversified Metals & Mining Index plummeted 2.66 percent, as First Quantum Minerals Ltd. (FM.TO) shed 3.50 percent, Lundin Mining Corp. (LUN.TO) dived 3.64 percent, and Sherritt International Corp. (S.TO) surrendered 3.72 percent. Teck Resources (TCK.B.TO) dropped 1.86 percent, while Capstone Mining Corp. (CS.TO) shed 3.10 percent.

The heavyweight Financial Index shed 0.21 percent, as Royal Bank of Canada (RY.TO) fell 0.14 percent, National Bank of Canada (NA.TO) dipped 0.04 percent, and Bank of Montreal (BMO.TO) dropped 0.51 percent.

Bank of Nova Scotia (BNS.TO) fell 0.26 percent, while Toronto-Dominion Bank (TD.TO) inched up 0.06 percent. Canadian Imperial Bank of Commerce (CM.TO) added 0.16 percent.

The Capped Health Care Index gained 0.48 percent as Extendicare Inc. (EXE.TO) gathered 1.27 percent, Concordia Healthcare Corp. (CXR.TO) shed 0.89 percent, and Catamaran Corp. (CCT.TO) edged up 0.18 percent.

Valeant Pharmaceuticals International (VRX.TO) climbed 2.15 percent. The company has appointed Robert L. Rosiello as Executive Vice President, and will also take over the role of Chief Financial Officer from Howard Schiller on July 1, 2015.

The Capped Industrials Index fell 0.24 percent, as Bombardier Inc. (BBD-A.TO) added 0.79 percent and Finning International Inc. (FTT.TO) dropped 1.41 percent. Canadian Pacific Railway Limited (CP.TO) moved up 0.67percent, while Canadian National Railway (CNR.TO) added 0.63 percent. CAE Inc. (CAE.TO) shed 0.99 percent, while Air Canada (AC.TO) dropped 0.72 percent.

The Information Technology Index inched up 0.04 percent, after Sierra Wireless, Inc. (SW.TO) surrendered 1.44 percent and Descartes Systems Group Inc. (DSG.TO) inched up 0.11 percent. BlackBerry Inc. (BB.TO) slipped 1.05 percent, while Constellation Software Inc. (CSU.TO) gained 1.23 percent.

The Capped Telecommunication Index shed 1.02 percent, as Rogers Communications Inc. (RCI.B.TO) edged up 0.10 percent, TELUS Corp. (T.TO) dropped 0.51 percent, and BCE Inc. (BCE.TO) fell 1.82 percent.

Manitoba Telecom Services Inc. (MBT.TO) shed 1.64 percent and Sandvine (SVC.TO) fell 2.54 percent.

Evertz Technologies Limited (ET.TO) gained 6.57 percent after reporting fourth-quarter net earnings of $0.15 per share compared with $0.20 per share last year.

BRP Inc. (DOO.TO) gained 1.89 percent after having reported a first quarter profit of C$0.70 per share, up from C$0.24 per share a year ago.

Enghouse Systems Limited (ESL.TO) dropped 3.64 percent after reporting a second-quarter profit of C$0.28 per share, short of the consensus estimate of C$0.33 per share.

On the economic front, Statistics Canada reported this morning that the Canadian new housing price index rose by 0.1 percent in April. The increase matched the expectations of economists.

Statistics Canada also reported that Canadian industrial capacity utilization fell to 82.7 percent in the first quarter, from 83.5 percent in the previous quarter. Economists had expected a rate of 83.0 percent.

After reporting a modest decrease in first-time claims for U.S. unemployment benefits in the previous week, a Labor Department report on Thursday showed a slight uptick in claims in the week ended June 6. Initial jobless claims inched up to 279,000, an increase of 2,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 275,000 from the 276,000 originally reported for the previous week.

With prices for fuel imports showing a substantial increase, the Labor Department released a report on Thursday showing that U.S. import prices rose by more than expected in May.

The report said import prices surged up by 1.3 percent in May following a revised 0.2 percent decrease in April. Economists had expected import prices to climb by about 0.8 percent. The Labor Department also said export prices rose by 0.6 percent in May after falling by 0.7 percent in April. Export prices had been expected to inch up by 0.2 percent.

Partly reflecting a notable increase in retail inventories, a Commerce Department report on Thursday showed U.S. business inventories to have risen more than expected in April. Business inventories increased by 0.4 percent in April following a 0.1 percent uptick in March. Economists expected inventories to edge up by 0.2 percent.

China's industrial production and retail sales growth improved in May as recent measures taken to boost bank lending penetrate into economic activity. Industrial production grew 6.1 percent year-over-year in May, following a 5.9 percent gain in April, figures from the National Bureau of Statistics showed Thursday. Economists had expected a 6.0 percent increase for the month.

In another report, the NBS said retail sales in China surged 10.1 percent in May. This is in line with expectations, but slightly faster than previous month's 10.0 percent expansion. In March, sales had risen 10.2 percent.

French consumer prices increased for the second straight month in May, in line with expectations, figures from the statistical office Insee showed Thursday. The consumer price index rose 0.3 percent year-over-year in May, faster than previous month's 0.1 percent increase. The figure was also matched with consensus estimate.

France's non-farm payroll employment remained virtually stable in the first quarter after rising in the previous quarter, preliminary data released by statistical office INSEE showed Thursday. Payroll employment in the principally market sectors, which include the manufacturing, construction and services sectors, remained stable quarter-on-quarter, following the 0.1 percent rise in the previous quarter.