TSX Ends Sharply Higher On Strong Earnings, Data -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded strongly to end higher on Thursday, with some upbeat Canadian earnings reports and a slightly better than expected U.S. jobless claims data lifting sentiment. A strong reading of U.S. economic indicators and some fairly encouraging economic data from China and the eurozone also aided sentiment.

In some upbeat economic news from the U.S., the Conference Board's index of leading U.S. economic indicators rose more than anticipated in September, suggesting moderate growth in the short-term. Meanwhile, first-time claims for U.S. unemployment benefits increased for the week ended October 18, but was better than expectations.

Elsewhere, data showed Chinese manufacturing activity in October to have increased at a faster pace.

Investors are also betting on expectations of further stimulus from the European Central Bank and an extended low interest regime in the U.S.

The benchmark S&P/TSX Composite Index closed Thursday at 14,486.83, up 174.76 points or 1.22 percent. The index scaled a intraday high of 14,529.13 and a low of 14,384.53.

On Wednesday, the index closed down 235.64 points or 1.62 percent at 14,312.07, on the back of a report showing an unexpected drop in Canadian retail sales and amid worries over the health of the global economy.

Crude oil ended sharply higher boosted by reports that Saudi Arabia has cut its crude output to prop up prices, even as some strong earnings and upbeat data raised hopes the global economy would recover sooner than initially anticipated.

Yesterday, Data from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 7.1 million barrels to 377.7 million barrels in the week ended October 17, three times more than the expected increase of 2.7 million barrels.

The Energy Index jumped 2.29 percent, with U.S. crude oil futures for December delivery surging $1.57 or 1.9 percent to close at $82.09 a barrel on the Nymex Thursday.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) added 2.78 percent, Talisman Energy Inc. (TLM.TO) gained 2.30 percent, Athabasca Oil Corp. (ATH.TO) fell 1.60 percent, and Niko Resources Ltd. (NKO.TO) lost 5.41 percent.

Cenovus Energy Inc. (CVE.TO) is up 6.2 percent on strong results. The company reported operating earnings of $372 million and a revenue of $4.97 billion for the third quarter this fiscal.

Penn West Petroleum Ltd. (PWT.TO) is up 3 percent after saying it has signed an agreement to sell non-core assets located in south central Alberta for expected proceeds of around $355 million to a private company.

Meanwhile, Husky Energy (HSE.TO) is declining 2.2 percent. after reporting third quarter net earnings of $571 million, up 11.5 percent from $512 million in the third quarter of 2013.

Suncor Energy Inc. (SU.TO) added 2.85 percent, while Enbridge Inc. (ENB.TO) gained 2.54 percent,

The Healthcare Index gained 0.24 percent, with Valeant Pharmaceuticals Inc (VRX.TO) shedding 0.59 percent, Catamaran Corp. (CCT.TO) up 1.16 percent, and Extendicare Inc. (EXE.TO) edged up 0.25 percent.

Gold futures ended lower with investors opting for the riskier equity assets on the back of some healthy corporate earnings, following some upbeat economic data from China and the eurozone, amid a strengthening dollar.

The Global Gold Index added 0.29 percent, with gold for December delivery plunging 16.40 or 1.3 percent to settle at $1,229.10 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Kinross Gold Corp. (K.TO) shed 1.60 percent, Yamana Gold Inc. (YRI.TO) gained 0.86 percent, and Eldorado Gold Corp. (ELD.TO) gathered 1.30 percent.

Barrick Gold Corp. (ABX.TO) gained 0.40 percent, while Goldcorp Inc. (G.TO) edged up 0.20 percent.

The Capped Materials Index gained 0.60 percent, mostly on declining gold stocks.

Potash Corp. of Saskatchewan Inc. (POT.TO) is down marginally, after the company said its third-quarter net income slid to $317 million or $0.38 per share, from $356 million or $0.41 per share, last year. The company expects annual earnings to be in the range of $1.75 - $1.85 per share, versus its previous range of $1.70 - $1.90 per share.

The heavyweight Financial Index added 0.96 percent, with Toronto-Dominion Bank (TD.TO) added 1.21 percent, Canadian Imperial Bank of Commerce (CM.TO) gained 1.95 percent, Bank of Nova Scotia (BNS.TO) declined 1.68 percent, Bank of Montreal (BMO.TO) moved up 1.36 percent, Royal Bank of Canada (RY.TO) shed 0.19 percent, and National Bank of Canada (NA.TO) dropped 1.39 percent.

The Diversified Metals & Mining Index added 0.95 percent, as First Quantum Minerals Ltd. (FM.TO) gained 1.69 percent, Lundin Mining Corp. (LUN.TO) gathered 2.19 percent, and Teck Resources Limited (TCK.B.TO) moved up 1.19 percent.

The Capped Industrials Index jumped 2.27 percent, with Bombardier Inc. (BBD.B.TO) adding 4.13 percent and Air Canada (AC.B.TO) up 3.76 percent.

Canadian National Railway Co. (CNR.TO) gained 2.09 percent, while Canadian Pacific Railway Limited (CP.TO) added 3.54 percent.

The Information Technology Index moved up 0.39 percent, with smartphone maker BlackBerry Limited (BB.TO) jumping 4.32 percent.

Among other tech stocks, CGI Group Inc. (GIB.A.TO) added 1.12 percent and Descartes Systems Group Inc. (DSG.TO) added 0.67 percent.

Celestica Inc. (CLS.TO) jumped 4.05 percent, after reporting adjusted net income of US$47.2 million or US$0.26 per share for the third quarter, compared to US$41.5 million or US$0.22 per share in the prior year quarter.

Open Text Corp (OTC.TO) dived 5.74 percent after reporting first-quarter net earnings of $64.7 million or $0.53 per share, compared with $30.6 million or $0.26 per share last year.

The Telecom Index inched up 0.02 percent with BCE Inc. (BCE.TO) up 0.48 percent, and TELUS Corp. (T.TO) up 0.64 percent.

Rogers Communications Inc. (RCI.B.TO) slipped 1.45 percent, after reporting third quarter net income of C$332 million or C$0.64 per share, compared to C$464 million or C$0.90 per share in the year ago quarter.

Shaw Communications, Inc. (SJR.B.TO) gained 0.18 percent after reporting a 64 percent increase in fourth quarter net profit.

The Consumer Staples Index gained 1.22 percent, with Metro Inc. (MRU.TO) up 1.07 percent and Maple Leaf Foods Inc. (MFI.TO) down 0.22 percent.

Brookfield Asset Management Inc. (BAM.A.TO) gathered 1.89 percent after making a proposal to Brookfield Residential Properties Inc. (BRP.TO) to acquire approximately 30 percent of common shares of Brookfield Residential that it does not own, for $23.00 cash a share.

Meanwhile, Brookfield Residential Properties Inc. shares soared 22.21 percent.

In economic news, data from the U.S. Labor Department showed initial jobless claims to have risen by 17,000 to a seasonally adjusted 283,000 in the week ended October 18, from the previous week's revised total of 266,000. Economists expected claims to rise to 285,000 from 264,000 originally reported in the previous week.

A report from the Conference Board showed its index of leading U.S. economic indicators rose 0.8 percent in September. Economists expected the index to rise by 0.6 percent compared to the 0.2 percent uptick originally reported for the previous month.

A preliminary reading of China's HSBC manufacturing index inched up to a three-month high of 50.3 in October from 50.2 in September, above the forecasts for 50.3. However, the level of output in factories fell to a five-month low of 50.7 in October.

A report from Markit Economics showed eurozone private sector to have logged a marginal upturn in October helped by an improvement in Germany, even as France moved deeper into contraction. The headline flash Eurozone Markit composite output index rose to 52.2 in October from a 10-month low of 52 in September.

The services Purchasing Managers' Index remained unchanged at 52.4 in October when it was expected to drop to 52. The manufacturing PMI advanced to 50.7 from 50.3 in September, confounding expectations for a fall to 49.9.

Meanwhile, in Asia, a preliminary reading of China's HSBC manufacturing index inched up to a three-month high of 50.3 in October from 50.2 in September and above forecasts for 50.3. However, the level of output in factories fell to a five-month low of 50.7 in October.

Eurozone consumer confidence improved unexpectedly in October after weakening in the previous four months, preliminary data from the European Commission showed Thursday. The flash consumer confidence indicator rose to -11.1 from a seven-month low of -11.4 in September. Economists had forecast a weaker score of -12. For the EU, the consumer confidence index increased by 0.6 points to -7.4.

Elsewhere in Europe, U.K. retail sales declined more-than-expected in September, driven by a sharp contraction in clothing sales. Retail sales fell 0.3 percent in September from a month ago, when it rose 0.4 percent, the Office for National Statistics said Thursday. This was the first drop in four months. Economists had forecast a 0.1 percent drop for September.