TSX Ends Lower On Energy Stocks, Fed -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Wednesday, driven by energy and gold stocks, after the U.S. Federal Reserve maintained its interest rates while slashing its monthly asset purchase program as expected. Investors largely ignored reports of some fresh stimulus announced by the Chinese central bank and positive European markets.

The Federal Reserve on Wednesday maintained its pledge to keep near-zero rates in place for a "considerable time" after its bond-buying stimulus program ends. The central bank reduced its monthly asset purchases to $15 billion, while indicating the program will likely end in October.

Nonetheless, policy makers refrained from offering a more specific time-line for raising interest rates. The Fed struck a cautious tone in its current assessment of the jobs situation, noting there remains significant slack in the labor market. Job growth slowed last month even as unemployment rate dipped back down to 6.1 percent.

The S&P/TSX Composite Index closed Wednesday at 15,458.88, down 51.66 points or 0.33 percent. The index scaled a intraday high of 15,520.40 and a low of 15,428.34.

On Tuesday, the index closed up 27.98 points or 0.18 percent at 15,510.54, after scaling a intraday high of 15,556.18 and a low of 15,442.71.

U.S. crude oil rallied late in the session but still ended lower after a weekly official oil report from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have increased more than expected.

The Energy Index dived 1.17 percent, with U.S. crude oil futures for October delivery dropping $0.46 or 0.5 percent to close at $94.42 a barrel Wednesday on the Nymex.

Among energy stocks, Husky Energy (HSE.TO) shed 0.18 percent, Cenovus Energy Inc. (CVE.TO) dropped 1.70 percent, Enbridge Inc. (ENB.TO) fell 1.0 percent, Suncor Energy Inc. (SU.TO) surrendered 1.01 percent, Encana Corp. (ECA.TO) dropped 0.88 percent, and Canadian Natural Resources Limited (CNQ.TO) dipped 0.79 percent.

The Financial Index dipped 0.11 percent, with Toronto-Dominion Bank (TD.TO) down 0.17 percent, Canadian Imperial Bank of Commerce (CM.TO) down 0.13 percent, Royal Bank of Canada (RY.TO) added 0.21 percent, Bank of Nova Scotia (BNS.TO) fell 0.22 percent, and Bank of Montreal (BMO.TO) inched up 0.02 percent.

Gold futures ended slightly lower with investors awaiting the outcome of the two-day U.S. Federal Reserve policy later in the day.

Global Gold Index slipped 2.09 percent, with gold for December delivery shedding $0.80 percent to settle at $1,235.90 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 1.58 percent, Yamana Gold Inc. (YRI.TO) shed 2.15 percent, and B2Gold Corp. (BTO.TO) gained 0.43 percent. Eldorado Gold Corp. (ELD.TO) dropped 2.25 percent, while Barrick Gold Corp. (ABX.TO) slipped 1.60 percent.

The Capped Materials Index dropped 0.87 percent mostly on gold stocks, although Potash Corp. of Saskatchewan Inc. (POT.TO) gained 0.93 percent.

The Diversified Metals & Mining Index fell 0.74 percent, with First Quantum Minerals Ltd. (FM.TO) down 0.87 percent, Lundin Mining Corp. (LUN.TO) fell 1.53 percent, and Teck Resources Limited (TCK.B.TO) dipped 0.04 percent.

The Capped Industrial Index gained 0.50 percent, with Bombardier Inc. (BBD.B.TO) up 0.54 percent and Air Canada (AC.B.TO) down 3.79 percent.

The Information Technology Index fell 0.28 percent, with BlackBerry Limited (BB.TO) down 0.25 percent and Avigilon Corp. (AVO.TO) down 0.76 percent.

The Consumer Staples Index added 0.02 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) down 1.15 percent.

The Healthcare Index moved up 0.20 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) edging up 0.04 percent, Extendicare Inc. (EXE.TO) gaining 0.95 percent and Catamaran Corp. (CCT.TO) down 1.63 percent.

Valeant Pharmaceuticals and Pershing Square Capital Management, L.P. yesterday revealed an agreement with Allergan, Inc. (AGN) to settle pending litigation before the Delaware Court of Chancery. Allergan has agreed to unconditionally call and hold a special meeting of its shareholders on December 18.

The Telecom Index shed 0.55 percent with Rogers Communications Inc. (RCI.B.TO) gaining 1.27 percent and TELUS Corp. (T.TO) shed 1.49 percent.

TransCanada Corp. (TRP.TO) edged up 0.07 percent. The company said it will likely haul Canadian oil sands crude by rail, irrespective of whether its Keystone XL pipeline project gets approval or not.

Redknee Solutions Inc. (RKN.TO) shares dropped 0.27 percent. The company, a leading provider of real-time monetization and subscriber management software, said a top communications service provider in the Americas region, has signed orders worth more than $8 million dollars.

In economic news from the U.S., consumer prices unexpectedly declined in August, for the first time since May 2013, data released by the Labor Department showed.

The consumer price index dropped by a seasonally adjusted 0.2 percent in August after inching up by 0.1 percent in July. Excluding food and energy prices, the core consumer price index was unchanged in August after ticking up by 0.1 percent in each of the two previous months. Economists had expected core prices to edge up by 0.2 percent.

A National Association of Home Builders report on Wednesday showed U.S. homebuilder confidence in September jumped to its highest level in almost nine years, with a firming job market helping to unleash pent-up demand for new homes.

The report said the NAHB/Wells Fargo Housing Market Index jumped to a reading of 59 in September from 55 in August, while economists had expected the index to inch up to 56. The jump lifted the index to its highest level since hitting 61 in November of 2005.

Meanwhile, a report from the Commerce Department showed U.S. current account deficit to have shrunk 3.8 percent to $98.5 billion in the second quarter, from a revised $102.2 billion in the previous quarter. Economists expected a current account deficit of $114 billion for the quarter.

Elsewhere, China is pumping in about $81 billion or CNY 500 billion as stimulus into five of its largest lenders to boost liquidity amid slowing growth for a period of three months, media reports said Wednesday.

The People's Bank of China will provide CNY 100 billion each to the five state-owned banks through its standard lending facility. Analysts reportedly equated the latest move to a half-percentage point cut in the reserve ratio. The five largest banks include Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China and Bank of Communications Co.