TSX Ends Sharply Lower On Growth Worries, Oil Prices -- Canadian Commentary

(RTTNews) - Canadian stocks tumbled to end lower on Tuesday, amid a sharp drop in crude oil prices and renewed worries over the global economy with some weak trade data from the U.S. and a cut in euro area growth forecast hurting sentiment.

The drop was led mostly by resource stocks, with tech, healthcare, and telecommunications stocks the major gainers.

Crude oil plunged to a near three-year low on Tuesday, after Saudi Arabia announced a cut in prices to buyers in the U.S. Last month, Saudi Arabia had announced a reduction in oil prices for its customers in Asia and Africa.

In some disappointing economic news, U.S. trade deficit widened much more than anticipated in September, reflecting a notable pullback in the value of exports, a Commerce Department report showed Tuesday.

Meanwhile, the European Commission lowered its euro area growth forecasts, citing weak economy and slow improvement in the employment situation. The European Commission also reduced its inflation projection for 2015 and the current year.

New orders for U.S. manufactured goods dropped in line with economist estimates in September, largely due to a sharp drop in orders for transportation equipment. The benchmark S&P/TSX Composite Index closed Tuesday at 14,390.43, down 147.19 points or 1.01 percent. The index scaled a intraday high of 14,14,522.84 and a low of 14,327.02.

On Monday, the index closed down 75.70 points or 0.52 percent at 14,537.62, after scaling a intraday high of 14,637.56 and a low of 14,519.33.

Crude prices continued to be under pressure on demand growth concerns with fears of a supply glut on higher OPEC output in October and Saudi Arabia discounting prices to customers around the world. Last month, Saudi Arabia had announced a reduction in oil prices for its customers in Asia and Africa.

The Energy Index plummeted 4.16 percent, with U.S. crude oil futures for December delivery plunging $1.59 or 2.0 percent to close at $77.19 a barrel on the Nymex Tuesday.

Among other energy stocks, Suncor Energy Inc. (SU.TO) shed 3.45 percent, Canadian Natural Resources Limited (CNQ.TO) down 3.87 percent, Encana Corp. (ECA.TO) fell 0.3.17 percent, Talisman Energy Inc. (TLM.TO) plunged 11.85 percent, and Cenovus Energy Inc. (CVE.TO) fell 1.83 percent.

Talisman Energy Inc. (TLM.TO) declined about 9 percent after reporting third-quarter net income of $425 million, or $0.38 per share, compared to a net loss of $54 million, or $0.08 per share, in the prior-year period.

Gold futures ended lower amid growing speculation about U.S. interest rate hikes and subdued physical demand for the precious metal, notwithstanding a weak dollar. The precious metal pegged back some of the losses with declining global equity markets and some soft economic data out of Europe and the U.S.

The Global Gold Index plunged 3.34 percent, with gold for December delivery shedding $$2.1 or 0.2 percent to settle at $1,167.70 an ounce on the New York Mercantile Exchange Tuesday.

Goldcorp Inc. (G.TO) shed 1.82 percent, while Kinross Gold Corp. (K.TO) plummeted 6.35 percent.

Among other gold stocks, Barrick Gold Corp. (ABX.TO) shed 3.55 percent, Agnico Eagle Mines Limited (AEM.TO) surrendered 3.56 percent, Yamana Gold Inc. (YRI.TO) plunged 5.29 percent, Eldorado Gold Corp. (ELD.TO) tumbled 5.20 percent, and IAMGOLD Corp. (IMG.TO) dived 4.15 percent.

The Capped Materials Index dived 2.44 percent due mainly to rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) shedding 1.70 percent.

The Healthcare Index gained 0.75 percent, with Catamaran Corp. (CCT.TO) adding 0.26 percent, Valeant Pharmaceuticals Inc. (VRX.TO) up 1.0 percent, and Extendicare Inc. (EXE.TO) advanced 0.98 percent.

The heavyweight Financial Index dropped 0.16 percent, as Toronto-Dominion Bank (TD.TO) gained 0.31 percent, Canadian Imperial Bank of Commerce (CM.TO) fell 0.17 percent, Bank of Montreal (BMO.TO) edged down 0.05 percent, National Bank of Canada (NA.TO) gained 0.23 percent, and Royal Bank of Canada (RY.TO) gained 0.39 percent.

Bank of Nova Scotia (BNS.TO) shed 2.31 percent after saying it expects to record charges of nearly $451 million pre-tax, or $341 million after tax. Earnings per share are expected to be impacted by about $0.28.

The Diversified Metals & Mining Index dropped 2.75 percent, as First Quantum Minerals Ltd. (FM.TO) shed 1.83 percent, while Lundin Mining Corp. (LUN.TO) edged up 0.20 percent. Teck Resources Limited (TCK.B.TO) dived 4.15 percent.

The Capped Industrials Index shed 1.06 percent, with Air Canada (AC.B.TO) down 4.75 percent, and Bombardier Inc. (BBD.B.TO) up 0.69 percent.

The Information Technology Index climbed 1.72 percent, with smartphone maker BlackBerry Limited (BB.TO) up 0.69 percent, Constellation Software Inc. (CSU.TO) up 3.38 percent, and Avigilon Corporation (AVO.TO) dropped 2.60 percent.

The Telecom Index moved up 1.14 percent with Rogers Communications Inc. (RCI.B.TO) gaining 0.82 percent, BCE Inc. (BCE.TO) adding 1.75 percent, and TELUS Corp. (T.TO) climbed 1.29 percent.

The Consumer Staples Index moved up 0.94 percent, as Metro Inc. (MRU.TO) gained 0.46 percent, and Alimentation Couche-Tard Inc. (ATD.B.TO) surrendered 1.68 percent.

The Consumer Discretionary Index added 0.18 percent with Magna International Inc. (MG.TO) down 0.23 percent.

Bellatrix Exploration Ltd. (BXE.TO) plunged 8.53 declining 8.53 percent, after reporting a third quarter net profit of $0.23 per basic share, compared to $0.27 per basic share in the year ago quarter.

Meanwhile, Agrium, Inc. (AGU.TO) shares gained 1.22 percent after reporting a 34 percent decline in third quarter profit, despite improved gross margins. However, net earnings from continuing operations for the quarter grew to $91 million or $0.63 per share from $80 million or $0.54 per share in the year-ago quarter.

Ritchie Bros. Auctioneers Inc. (RBA.TO) dropped 2.64 percent after announcing a 43 percent fall in third-quarter 2014 net earnings to $9.3 million, or $0.09 a share, from $16.3 million, or $0.15 a share, last year.

TransCanada Corporation (TRP.TO) gained 0.29 percent after reporting third quarter earnings of $450 million or $0.63 per share compared to $447 million or $0.63 per share for the same period last year.

ZCL Composites Inc. (ZCL.TO) dropped 2.47 percent after reporting record net income of $5.6 million or $0.19 per share for third quarter, up $0.6 million or 11% from $5.0 million or $0.17 per share last year.

On the economic front, data from Statistics Canada showed Canada's trade surplus at CS$710 million in October, against a deficit of CS$460 million (revised) in the preceding month.

In economic news from the U.S., a report from the Commerce Department showed trade deficit to have widened much more than anticipated to $43.0 billion in September, from a revised $40.0 billion in August. While value of imports was nearly unchanged, the value of exports fell 1.5 percent.

According to another report from the Commerce Department, new orders for U.S. manufactured goods dropped 0.6 percent in September, after tumbling 10.0 percent in August. The continued decrease in orders matched the consensus estimate.

Meanwhile, citing weak economy and slow improvement in the employment situation, the European Commission on Tuesday lowered the euro area growth forecast for 2015 to 1.1 percent from 1.7 percent predicted in May. The outlook for this year has been cut to 0.8 percent from 1.2 percent.

European Commission reduced inflation projection for 2015 to 0.8 percent from 1.2 percent, and for the current year it has been trimmed to 0.5 percent from 0.8 percent earlier.

Eurozone producer prices rose for the first time in three months in September, Eurostat reported Tuesday. Producer prices gained 0.2 percent in September from August, when prices fell by 0.2 percent. Economists had forecast prices to remain flat in September.

Elsewhere in Europe, U.K. construction sector growth slowed more than expected in October, a survey from Markit Economics and CIPS showed Tuesday. The seasonally adjusted Markit/CIPS construction purchasing managers' index fell to 61.4 in October from 64.2 in September. This was less than the 63.5 expected by economists.