TSX Ends Lower On U.S. Shutdown - Canadian Commentary

(RTTNews) - Canadian stocks settled sharply lower on Thursday, tracking declining global equity markets as the partial shutdown of the U.S. government entered a third day amid fears it could drag on and lawmakers may fail to raise the country's debt ceiling. All sub-indices of the main index ended in the red.

The partial shutdown of the government continued in the U.S. with lawmakers failing to break the budget impasse. Disappointing U.S. private-sector jobs data, prolonged U.S. budget talks, and fears of a bigger showdown over raising the nation's debt ceiling, stoked expectations the Federal Reserve will go slow on tapering the quantitative easing program.

Most Asian markets settled higher overnight following upbeat report on China's official non-manufacturing purchasing managers' index. Meanwhile, most European markets reacted little to the eurozone retail sales increasing more than expected in August and private sector business activity across the region improved slightly more than previously estimated in September.

Data from the China Federation of Logistics and Purchasing and the National Bureau of Statistics showed the index measuring performance of the non-manufacturing sector, which includes services and construction industries, rose to a six-month high of 55.4 in September from 53.9 in August.

The S&P/TSX Composite Index closed Thursday at 12,735.12, down 103.88 points or 0.81 percent. The index touched an intraday high of 12,844.90 and a low of 12,700.42.

The Diversified Metals & Mining Index dived 2.62 percent, with Teck Resources Limited (TCK.B.TO) down 2.01 percent and Lundin Mining Corp. (LUN.TO) down 0.88 percent. Osisko Mining Corp. (OSK.TO) gained 0.40 percent.

The Capped Materials Index lost 1.41 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) dropping 0.68 percent.

Gold futures ended modestly lower on Thursday, after making sharp gains yesterday, after some data out of the U.S. showed initial jobless claims for unemployment benefits rose less than expected last week, even as activity in the service sector dropped more than anticipated.

The Global Gold Index dropped 1.44 percent, with gold futures for December delivery shedding $3.10 or 0.2 percent to close at $1,317.60 an ounce Thursday on the Nymex.

Yamana Gold Inc. (YRI.TO) slipped 2.03 percent, while IAMGOLD Corp. (IMG) dropped 1.88 percent. Barrick Gold Corp. (ABX.TO) dropped 1.84 percent, while Goldcorp Inc. (G.TO) lost 1.22 percent. Kinross Gold Corp. (K.TO) slipped 0.60 percent, while Eldorado Gold Corp. (ELD.TO) dropped 1.92 percent.

The Energy Index shed 1.12 percent, with U.S. crude oil futures for November delivery dropping $0.79 or 0.8 percent to close at $103.31 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) dropped 1.40 percent, Talisman Energy Inc. (TLM.TO) dropped 2.34 percent, and Suncor Energy Inc.(SU.TO) was down 1.52 percent. Enbridge Inc. (ENB.TO) dropped 0.87 percent, while Imperial Oil Limited (IMO.TO) shed 0.72 percent.

The Financial Index slipped 0.51 percent with Bank of Montreal (BMO.TO) down 0.49 percent and Manulife Financial Corp. (MFC.TO) shedding 0.58 percent. The Bank of Nova Scotia (BNS.TO) slipped 0.29 percent, while Toronto-Dominion Bank (TD.TO) was down 0.93 percent. Royal Bank of Canada (RY.TO) slipped 0.56 percent, while National Bank of Canada (NA.TO) dipped 0.32 percent.

The Information Technology Index surrendered 1.37 percent, with smartphone maker BlackBerry Limited (BB.TO) diving 3.63 percent amid reports that private equity group Cerberus Capital Management LP was considering an offer for BlackBerry..

The Capped Industrials Index slipped 0.81 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) dropping 0.84 percent and Air Canada (AC.B.TO) gaining 1.79 percent.

Westjet Airlines Ltd. (WJA.TO) shed 2.46 percent even after reporting its traffic in September increased 5.7 percent from last year, on a capacity increase of 9.2 percent. The airline said its September 2013 traffic rose 5.7 percent to 1.42 billion revenue passenger miles or RPMs from 1.34 billion RPMs in the same period last year.

In economic news from the U.S., the Labor Department said initial jobless claims inched up to 308,000, an increase of 1,000 from the previous week's revised figure of 307,000. Economists had been expecting initial jobless claims to climb to 315,000 from the 305,000 originally reported for the previous week.

Separately, the Institute for Supply Management said its non-manufacturing index dropped to 54.4 in September from 58.6 in August. While a reading above 50 indicates continued growth in the service sector, economists had expected the index to show a much more modest decrease to a reading of 57.0.

From the eurozone, Germany's service sector activity increased at the fastest pace in seven months in September, but to a lesser extent than estimated earlier, final data from a survey by Markit Economics and BME showed. The seasonally adjusted purchasing managers' index for the service sector advanced to 53.7 in September from 52.8 in August, hitting the highest level since February. Initially, the index for September was estimated to have risen to 54.4.

Meanwhile, private sector business activity across the eurozone improved slightly more than previously estimated in September, final results of a survey by Markit Economics revealed. The composite output index, that measures performance of both manufacturing and service sectors, rose to a 27-month high of 52.2 in September from 51.5 in August. The flash estimate was 52.1.

Eurozone retail sales increased more than expected in August, latest figures from Eurostat revealed. Retail sales increased 0.7 percent month-on-month in August compared with forecast for a 0.2 percent growth. This followed a 0.5 percent rise in July and a 0.8 percent decline in June.