TSX Ends Sharply Lower On Growth Worries -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a four-day gain to end sharply lower Wednesday, on some disappointing data showing an unexpected drop in Canadian retail sales and worries over the health of the global economy prompted investors to trim positions.

All major sub-indices ended in the red, led by resource and financial stocks.

A report from Statistics Canada showed retail sales to have unexpectedly declined 0.3 percent in August to $42.4 billion, registering a second successive monthly fall, on falling gasoline prices.

Investors also weighed news reports that at least 11 banks from six European countries are unlikely to pass the ECB's stress tests.

Meanwhile, the Bank of Canada today kept the interest rates on hold at 1.00 percent, as widely expected, while indicating the economy may not reach full output until the second half of 2016.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,312.07, down 235.64 points or 1.62 percent. The index scaled a intraday high of 14,584.33 and a low of 14,295.07.

On Tuesday, the index closed up 209.94 points or 1.46 percent at 14,547.71, extending gains to a fourth successive session. After plunging to an eight-month low early last week, the index gained over 4.5 percent since last Wednesday.

Crude oil plummeted to end sharply lower after a weekly oil report from the U.S. Energy Information Administration showed crude oil inventories to have surged almost three times more than expected last week, with renewed concerns over excess supply globally.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 7.1 million barrels in the week ended October 17, while analysts anticipated an increase of 2.7 million barrels.

Meanwhile, data from the American Petroleum Institute late Tuesday showed U.S. crude inventories to have risen by 1.2 million barrels last week.

The Energy Index plummeted 3.29 percent, with U.S. crude oil futures for December delivery plunging $1.97 or 2.4 percent to close at $80.52 a barrel on the Nymex Wednesday.

Among energy stocks, Niko Resources Ltd. (NKO.TO) shed 7.50 percent, Canadian Natural Resources Limited (CNQ.TO) dropped 1.56 percent, Cenovus Energy Inc. (CVE.TO) dropped 1.76 percent, Talisman Energy Inc. (TLM.TO) shed 4.40 percent, and Athabasca Oil Corp. (ATH.TO) fell 4.99 percent.

Suncor Energy Inc. (SU.TO) fell 2.47 percent, Enbridge Inc. (ENB.TO) shed 2.28 percent, Pacific Rubiales Energy Corp. (PRE.TO) dropped 4.44 percent, and Encana Corp. (ECA.TO) plunged 5.14 percent.

The Healthcare index dropped 0.64 percent, with Valeant Pharmaceuticals Inc (VRX.TO) down 1.11 percent, Catamaran Corp. (CCT.TO) down 0.90 percent, and Extendicare Inc. (EXE.TO) up 0.12 percent.

Gold futures ended lower as the dollar strengthened on some encouraging data from the U.S. indicating inflation to have risen marginally in September, even as investors anticipate a fresh round of stimulus from the European Central Bank.

The Global Gold Index tumbled 3.13 percent, with gold for December delivery shedding 6.20 or 0.5 percent to settle at $1,245.50 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Kinross Gold Corp. (K.TO) dived 4.29 percent, Yamana Gold Inc. (YRI.TO) dipped 3.27 percent, and Eldorado Gold Corp. (ELD.TO) dropped 3.39 percent.

Barrick Gold Corp. (ABX.TO) shed 1.44 percent, while Goldcorp Inc. (G.TO) fell 3.80 percent.

The Capped Materials Index dived 2.50 percent, mostly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) edging up 0.03 percent.

The heavyweight Financial Index slumped 1.09 percent, with Toronto-Dominion Bank (TD.TO) dropping 0.88 percent, Canadian Imperial Bank of Commerce (CM.TO) shed 0.59 percent, Bank of Nova Scotia (BNS.TO) declined 1.68 percent, Bank of Montreal (BMO.TO) fell 0.84 percent, Royal Bank of Canada (RY.TO) surrendered 0.79 percent, and National Bank of Canada (NA.TO) dropped 0.58 percent.

The Diversified Metals & Mining Index plunged 3.06 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 4.24 percent, Lundin Mining Corp. (LUN.TO) shed 1.95 percent, and Teck Resources Limited (TCK.B.TO) fell 2.32 percent.

The Capped Industrials Index dived 1.24 percent, with Bombardier Inc. (BBD.B.TO) adding 0.55 percent and Air Canada (AC.B.TO) down 2.57 percent.

Canadian National Railway Co. (CNR.TO) fell 0.66 percent after reporting a net profit of C$853 million or C$1.04 per share for the third quarter, up from C$705 million or C$0.84 per share recorded a year ago.

Meanwhile, Canadian Pacific Railway Limited (CP.TO) shed 1.52 percent with the company likely to look at other targets after having terminated merger talks with CSX Corp. (CSX). News reports indicate the company is unlikely to pursue a hostile bid for CSX.

The Information Technology Index surrendered 1.79 percent, with smartphone maker BlackBerry Limited (BB.TO) dropping 2.28 percent. CGI Group Inc. (GIB.A.TO) fell 2.13 percent and Descartes Systems Group Inc. (DSG.TO) dropped 2.94 percent.

Celestica Inc. (CLS.TO) fell 0.98 percent, despite 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.

The Telecom Index shed 0.71 percent with Rogers Communications Inc. (RCI.B.TO) down 1.32 percent, BCE Inc. (BCE.TO) down 0.33 percent, and TELUS Corp. (T.TO) down 0.82 percent.

The Consumer Staples Index dropped 1.06 percent, with Metro Inc. (MRU.TO) down 1.49 percent and Maple Leaf Foods Inc. (MFI.TO) also down 1.12 percent.

In economic news, consumer prices in the U.S. unexpectedly increased modestly in September, with higher prices for food and shelter offsetting a continued decline in energy prices, a Labor Department report said Wednesday. The Labor Department said its consumer price index edged up 0.1 percent in September following a 0.2 percent drop in August. Economists expected prices to come in unchanged.

In Europe, Bank of England policymakers decided to leave its key rate at a historic low of 0.50 percent in a split vote for the third straight time at the meeting held early this month as a majority of members noticed increased risks from slowing global economy, especially in euro area.

Meanwhile, incoming President of the EU executive Jean-Claude Juncker said he plans to present a EUR 300 billion investment package to bolster growth and create employment.

"If you give us your support today, we will present the jobs, growth and investment package before Christmas," Juncker told the European Parliament in Strasbourg.