TSX Ends Sharply Lower On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks plunged to a near 5-month low on Thursday, tracking sharply declining U.S. and European markets, dragged down by energy stocks with oil prices plummeting on demand growth worries, amid lingering concerns over a global economic slowdown.

Some disappointing data from the eurozone and the recent downgrade in global growth forecast by the International Monetary Fund has raised investors concern yet again.

Fears about U.S. interest rates have subsided following the release of the minutes of the latest Federal Reserve monetary policy meeting that suggested the policymakers are in no hurry to hike rates.

However, the Federal Reserve has cut its growth forecast for the U.S. economy with members having reservations over the strength of the dollar amid the prevailing global economic weakness.

Investors are digesting a report showing an unexpected drop in U.S. jobless claims and data showing a substantial drop in German exports.

In an upbeat sign for the job market, a Labor Department report on Thursday showed an unexpected drop in first-time claims for U.S. unemployment benefits in the week ended October 4.

German exports logged its biggest fall since early 2009, making it harder for the largest eurozone economy to recover from the contraction seen in the second quarter.

The benchmark S&P/TSX Composite Index closed Thursday at 14,460.60, down 205.87 points or 1.40 percent. The index scaled a intraday high of 14,661.66 and a low of 14,399.98.

On Wednesday, the index rebounded to end higher, on some upbeat Canadian housing starts in September with gold stocks trending sharply higher. .

Crude oil plunged to end at a 22-month low on as investors continued to worry over demand growth concerns and a supply glut, even as the U.S. Federal Reserve cut its growth outlook for the economy.

The Energy Index plummeted 2.76 percent, with U.S. crude oil futures for November delivery plunging $1.54 or 1.8 percent to close at $85.77 a barrel on the Nymex Thursday.

Among energy stocks, Talisman Energy Inc. (TLM.TO) plunged 5.13 percent, Husky Energy Inc. (HSE.TO) dropped 1.41 percent, Cenovus Energy Inc. (CVE.TO) shed 2.53 percent, and Canadian Natural Resources Limited (CNQ.TO) surrendered 1.76 percent. Suncor Energy Inc. (SU.TO) dropped 1.91 percent, while Enbridge Inc. (ENB.TO) fell 1.16 percent. Encana Corporation (ECA.TO) declined 3.50 percent.

The Financial Index shed 0.35 percent, with Toronto-Dominion Bank (TD.TO) inching up 0.04 percent, while Canadian Imperial Bank of Commerce (CM.TO) edged down 0.06 percent. Royal Bank of Canada (RY.TO) fell 0.30 percent, Bank of Nova Scotia (BNS.TO) shed 0.19 percent, Bank of Montreal (BMO.TO) added 0.07 percent, and National Bank of Canada (NA.TO) added 0.46 percent.

Gold futures rebounded to end sharply higher after the U.S. Federal Reserve's minutes from its September monetary policy meeting eased fears about a rate hike anytime soon.

The Global Gold Index dived 2.76 percent, although gold for December delivery jumped $19.30 or 1.6 percent to settle at $1,225.30 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) shed 2.20 percent, Yamana Gold Inc. (YRI.TO) fell 2.85 percent, Eldorado Gold Corp. (ELD.TO) dropped 1.18 percent, and B2Gold Corp. (BTO.TO) slipped 1.21 percent.

Goldcorp Inc. (G.TO) shed 2.98 percent after reports emerged the company is looking to cut costs on its planned $3.9 billion El Morro copper and gold project in Chile.

The Capped Materials Index dived 2.86 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) down 2.57 percent.

The Diversified Metals & Mining Index plunged 4.34 percent, with First Quantum Minerals Ltd. (FM.TO) dropping 4.45 percent, Lundin Mining Corp. (LUN.TO) down 2.86 percent, and Teck Resources Limited (TCK.B.TO) diving 6.41 percent.

The Capped Industrials Index fell 2.20 percent, with Bombardier Inc. (BBD.B.TO) dropping 1.11 percent and SNC-Lavalin Group Inc. (SNC.TO) down 2.37 percent.

The Information Technology Index shed 0.61 percent, with smartphone maker BlackBerry Limited (BB.TO) down 0.68 percent.

The Healthcare Index dived 2.33 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 2.19 percent. Catamaran Corporation (CCT.TO) dropped 2.03 percent, while Extendicare Inc. (EXE.TO) slipped 2.76 percent.

The Telecom Index moved up 0.16 percent with Rogers Communications Inc. (RCI.B.TO) edging up 0.16 percent and TELUS Corp. (T.TO) adding 0.13 percent.

The Consumer Staples Index slipped 0.65 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) down 0.78 percent and Saputo Inc. (SAP.TO) down 0.88 percent.

Sandvine Corp. (SVC.TO) is down 3.65 percent after reporting a third-quarter profit of $3.1 million or $0.02 per share, compared to $4.7 million or $0.03 per share in the comparable quarter last year.

CAE Inc. (CAE.TO) shed 0.21 percent after signing a series of civil aviation training solutions contracts worth more than C$200 million on Thursday with airlines and aircraft operators in the Americas, Asia, Africa and the Middle-East.

QLT Inc. (QLT.TO) gained 0.22 percent after stating that Auxilium Pharmaceuticals, Inc's board has reviewed an offer from Endo International plc (ENL.TO) to purchase all issued and outstanding shares of Auxilium.

Keyera Corp. (KEY.TO) shed 1.04 percent after announcing a cash dividend for 21.5 cents per common share for October.

Canadian Tire Corp. (CTC.A) gained 3.07 percent after indicating an investment of around $575 million each year on business improvements between 2015 and 2017, towards new digital technology as well as expansions and upgrades to its store network.

Intertain Group Limited (IT.TO) shares jumped 6.71 percent after the company entered into a non-binding letter of intent to acquire the entire assets of Dumarca Holdings Limited, for an initial payment of 44.5 million euros in cash and 36.5 million euros in common shares at $10.29 per share.

On the economic front, a report from Statistics Canada showed Canada's New House Price Index to have risen to 0.3 percent last week.

In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have unexpectedly edged down to 287,000 in the week ended October 4th, from the previous week's revised level of 288,000. Economists had expected claims to have climbed to 294,000 from 287,000 originally reported for the previous week.

A Commerce Department report showed wholesale inventories to have increased 0.7 percent in August after edging up by an upwardly revised 0.3 percent in July. Economists expected inventories to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the report also showed wholesale sales to have dropped 0.7 percent in August following a 0.4 percent increase in July.

From the eurozone, data from Destatis revealed German exports fell a more-than-expected 5.8 percent month-over-month in August following the 4.8 percent rise in July. Shipments were forecast to drop by 4 percent. The decline was the largest since January 2009.

Elsewhere, eurozone house prices increased in the second quarter after falling for two consecutive quarters, data from Eurostat showed Thursday. House prices climbed 0.9 percent sequentially in the second quarter following a 0.2 percent drop in the prior quarter. On a yearly basis, house prices remained flat after easing 0.4 percent a quarter ago. House prices in the EU climbed 1.4 percent in the second quarter from the prior quarter and increased 1.7 percent from the same period of last year.

The Bank of England maintained its key policy rate at a historic low once again as policymakers await more concrete signs of the economic recovery becoming sustainable amid slowing inflation. The nine-member Monetary Policy Committee decided on Thursday to retain its key rate at a record low 0.50 percent and the asset purchase program at GBP 375 billion.