TSX Ends Lower As Mining, Gold Stocks Weigh -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a second straight session Wednesday, tracking declining equity markets south of the border, with the Bank of Canada holding its interest rates unchanged. The decline was led mostly by mining and gold stocks.

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 0.75 percent. Economists expected the bank to retain benchmark rate unchanged at 0.75 percent, after a rate cut in January.

Markets in Europe ended in positive territory, although investors remained cautious ahead of the European Central Bank meeting in Cyprus on Thursday and the U.S. jobs report on Friday.

The U.S. markets ended in the red after the ADP private sector employment report came in weaker than anticipated.

Some analysts linked the decline to a sell off prior to the crucial jobs report, as a better-than-expected data would convince the Fed Reserve to move in sooner to raise interest rates. It is widely speculated the Fed would make an increase in June this year.

A report from the payroll processor showed solid private sector job growth above 200,000 jobs in February, although the pace of growth saw a notable slowdown compared to the previous month.

Meanwhile, activity in the U.S. service sector unexpectedly grew at a slightly faster rate in February, a report from the Institute for Supply Management said.

The benchmark S&P/TSX Composite Index closed Wednesday at 15,082.84, down 51.01 points or 0.34 percent. The index scaled an intraday high of 15,135.92 and a low of 14,995.07.

On Tuesday, the index closed down 130.20 points or 0.85 percent, at 15,133.85. The index scaled an intraday high of 15,258.04 and a low of 15,109.88.

The heavyweight Financial Index dropped 0.17 percent, with Bank of Nova Scotia (BNS.TO) shedding 0.97 percent, Bank of Montreal (BMO.TO) inching up 0.04 percent, and Royal Bank of Canada (RY.TO) slipping 0.31 percent.

National Bank of Canada (NA.TO) lost 0.46 percent, while Canadian Imperial Bank of Commerce (CM.TO) dropped 0.31 percent. Toronto-Dominion Bank (TD.TO) inched down 0.02 percent.

Crude oil ended sharply higher after Saudi Arabia's move to raise selling prices for its oil to consumers in the U.S., Europe and Asia for April, which may indicate an uptick in demand from a Saudi viewpoint.

Oil prices surged even as the official weekly oil report from the Energy Information Administration showed crude stockpiles to have jumped much more than expected last week, with inventories at its highest in about 80 years.

A weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have surged 10.3 million barrels in the week ended February 27, while analysts expected an increase of 3.7 million barrels. The report showed U.S. crude oil inventories at 444.7 million barrels end last week, the most in over 80 years. This is also the largest weekly increase since 2001.

Gasoline stocks increased by 46,000 barrels last week, with analysts anticipating a decline of 1.9 million barrels. Inventories of distillate, including heating fuel, declined 1.7 million barrels, even as analysts estimated a drop of 2.2 million.

The Energy Index fell 0.27 percent, although the U.S. crude oil futures for April delivery, jumped $1.01 or 2.0 percent to settle at $51.53 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Canadian Oil Sands Limited (COS.TO) fell 1.42 percent, Suncor Energy Inc. (SU.TO) shed 0.45 percent, Canadian Natural Resources Limited (CNQ.TO) slipped 0.35 percent, and Encana Corp. (ECA.TO) dived 3.00 percent.

Crescent Point Energy Corp. (CPG.TO) gained 0.20 percent, while Cenovus Energy Inc. (CVE.TO) advanced 1.92 percent.

Gold futures ended lower as the dollar trended higher against a basket of some major currencies after some disappointing private jobs data from the U.S., even as investors await the employment report on Friday and the upcoming European Central Bank meet.

The Gold Index dropped 2.16 percent, with gold for April delivery dropping $3.50 or 0.3 percent to settle at $1,200.90 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Goldcorp (G.TO) fell 2.42 percent, Yamana Gold Inc. (YRI.TO) dropped 1.16 percent, Barrick Gold Corp. (ABX.TO) shed 3.27 percent, and Kinross Gold Corp (K.TO) fell 2.03 percent.

IAMGOLD (IMG.TO) surrendered 4.14 percent, while Eldorado Gold (ELD.TO) dropped 0.31 percent.

The Capped Materials Index fell 1.69 percent on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.86 percent and Agrium Inc. (AGU.TO) dropping 2.51 percent.

The Diversified Metals & Mining Index dropped 1.98 percent, as First Quantum Minerals Ltd. (FM.TO) shed 0.78 percent, Lundin Mining Corp. (LUN.TO) dropped 0.19 percent, and Teck Resources (TCK-B.TO) plunged 4.71 percent.

Sherritt International Corp. (S.TO) dived 4.18 percent, HudBay Minerals (HBM.TO) surrendered 1.60 percent, and Finning International Inc. (FTT.TO) surrendered 2.21 percent.

The Health Care Index gained 0.64 percent, as Extendicare Inc. (EXE.TO) gathered 2.76 percent. Valeant Pharmaceuticals International, Inc. (VRX.TO) fell 0.12 percent, while Catamaran Corp. (CCT.TO) dropped 0.53 percent.

The Capped Industrials Index dropped 0.34 percent, with Bombardier Inc. (BBD.B.TO) sharply down 4.56 percent and Air Canada (AC.TO) dropping 0.32 percent.

The Information Technology Index inched up 0.02 percent, with BlackBerry Limited (BB.TO) shedding 1.61 percent.

Among other tech stocks, Sierra Wireless, Inc. (SW.TO) dropped 0.88 percent, Constellation Software Inc. (CSU.TO) shed 2.14 percent, and Descartes Systems Group Inc. (DSG.TO) fell 0.37 percent.

The Capped Telecommunication Index moved up 0.08 percent, with BCE up 1.01 percent and TELUS Corp. (T.TO) down 0.77 percent.

Aviglion Corp. (AVO.TO) plummeted 15.74 percent after the company reported fourth quarter adjusted earnings of $0.25 per share, compared to $0.19 per share in the prior year.

Torstar Corp. (TS.B.TO) shed 0.53 percent after reporting fourth quarter adjusted earnings of C$0.30 per share, down from C$0.34 per share a year ago.

On the economic front, a report from payroll processor ADP on Wednesday showed solid private sector jobs growth of above 200,000 in February, although the pace of growth was notably slower when compared to the previous month. ADP said private sector employment increased by 212,000 jobs in February compared to an upwardly revised jump of 250,000 jobs in January. Economists had expected an increase of about 220,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.

Activity in the U.S. service sector unexpectedly grew at a slightly faster rate in February, a report from the Institute for Supply Management showed Wednesday. The ISM said its non-manufacturing index inched up to 56.9 in February from 56.7 in January, with a reading above 50 indicating an expansion in service sector activity. Economists expected the index to edge down to 56.5.

China's service sector expansion accelerated slightly in February, led by solid rise in new work, results of a survey by Markit Economics and HSBC showed Wednesday. The services business activity index rose slightly to 52.0 in February from January's six- month low of 51.8.

The eurozone private sector expanded in February albeit at a slower than initially estimated pace, survey data from Markit Economics showed Wednesday. The composite output index rose to 53.3 in February from 52.6 in January. The reading was slightly below the flash score of 53.5.

Eurozone retail sales growth accelerated unexpectedly in January on both food and non-food turnover, Eurostat reported Wednesday. Retail sales were up 1.1 percent on a monthly basis, faster than a revised 0.4 percent growth in December. The monthly growth rate was forecast to ease to 0.2 percent from December's originally estimated growth of 0.3 percent.

The U.K. service sector expansion slowed unexpectedly in February, survey data from Markit showed Wednesday. The Markit/Chartered Institute of Purchasing and Supply Purchasing Managers' Index for the service sector decreased to 56.7 in February from 57.2 in January. The score was forecast to rise to 57.5. This marked the twenty-sixth month of expansion.

Shop prices in the United Kingdom declined at a faster rate in February, defying expectations for a slower drop, the British Retail Consortium said on Wednesday. Shop prices fell 1.7 percent year-over-year after the 1.3 percent drop in January. Economists expected a 1.2 percent drop.