TSX Ends Slightly Lower On Healthcare Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day gain to end slightly lower on Wednesday, with gold stocks making impressive gains on higher bullion prices although was somewhat offset by declining healthcare stocks. Investors also reacted to a slew of corporate earnings news and a large jump in U.S. wholesale inflation.

Concerns over Ukraine continued to weigh on overall sentiment. International monitors in Kiev has initiated talks to end the crisis in Ukraine, although no representatives of pro-Russian groups were present. The talks included Ukraine's interim leaders and are in line with the OSCE roadmap plan.

Yesterday, seven Ukrainian soldiers were killed in an ambush by the pro-Russian militia near the town of Kramatorsk in Donetsk region, according to Ukraine's Defense Ministry. At least one rebel soldier was killed in the ambush.

The S&P/TSX Composite Index closed Wednesday at 14,673.73, down 6.08 points or 0.04 percent. The index scaled an intraday high of 14,706.13 and a low of 14,660.43.

Yesterday, the index closed higher on rising global cues and amid hopes of some Chinese economic reforms.

The Capped Healthcare Index dropped 0.90 percent as Catamaran Corp. (CCT.TO) declined 1.05 percent and Valeant Pharmaceuticals International, Inc. (VRX.TO) slipped 2.25 percent.

Crude oil moved up as the situation in Ukraine continued to escalate after an ambush by pro-Russian separatists resulted in the death of at least seven Ukrainian soldiers. Concerns over likely supply disruptions from Russia and uncertainty about Libyan oil shipments also contributed to the rise.

Data from the U.S. Energy Information Administration earlier Wednesday showed U.S. crude oil inventories to have risen 0.95 million barrels in the week ended May 9, while analysts expected a decline of 1.50 million barrels. Stockpiles aggregated 398.5 million barrels, up from the earlier week's total of 397.6 million barrels.

Gasoline stocks dropped by 0.77 million barrels last week, while analysts anticipated a decline of 1.0 million barrels. Inventories of distillate, including heating fuel, declined 1.1 million barrels, even as analysts anticipated an increase of 1.0 million barrels. The EIA report also showed a decline of about 0.60 million barrels at Cushing storage hub for the week.

The Energy Index dipped 0.16 percent, with U.S. crude oil futures for June delivery gaining $0.67 or 0.7 percent to close at $102.37 a barrel Wednesday on the Nymex.

Encana Corp. (ECA.TO) dropped 1.00 percent, while Aurora Oil & Gas Limited (AEF:TO) slipped 0.23 percent. Baytex Energy Corp. (BTE.TO) slipped 0.22 percent, while Crew Energy Inc. (CR.TO) plummeted 3.59 percent.

Among other energy stocks, Husky Energy Inc. (HSE.TO) gained 0.63 percent, Canadian Natural Resources Ltd. (CNQ.TO) added 0.54 percent, and Suncor Energy Inc. (SU.TO) slipped 0.23 percent. Canadian Oil Sands Limited (COS.TO) gained 0.56 percent, while Talisman Energy Inc. (TLM.TO) dropped 0.26 percent.

The Global Gold Index added 0.94 percent, with gold futures for June delivery gaining $11.10 percent or 0.9 percent to close at $1,305.90 an ounce Tuesday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) jumped 5.12 percent, Osisko Mining Corp. (OSK.TO) added 2.24 percent, Barrick Gold Corp. (ABX.TO) inched up 0.58 percent, and Agnico Eagle Mines Limited (AEM.TO) up 0.98 percent. Kinross Gold Corp. (K.TO) dropped 0.68 percent.

The Capped Materials Index gained 0.91 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 1.08 percent.

The Financial Index slipped 0.06 percent with the Toronto-Dominion Bank (TD.TO) down 0.08 percent, Royal Bank of Canada (RY.TO) up 0.42 percent, The Bank of Nova Scotia (BNS) down 0.01 percent, and Bank of Montreal (BMO.TO) down 0.08 percent.

The Diversified Metals & Mining Index added 0.69 percent, with Lundin Mining Corp. (LUN.TO) up 0.17 percent, First Quantum Minerals Ltd. (FM.TO) up 3.04 percent, and Teck Resources Limited (TCK.B.TO) down 1.06 percent.

The Information Technology Index dropped 1.72 percent, with BlackBerry Limited (BB.TO) down 1.48 percent, Constellation Software Inc (CSU.TO) down 0.49 percent, and Celestica Inc. (CLS.TO) down 2.22 percent. Avigilon Corp. (AVO.TO) dropped 1.23 percent.

The Capped Industrials Index inched up 0.05 percent, with Bombardier Inc. (BBD.B.TO) up 0.72 percent and Air Canada (AC.B) down 0.84 percent.

In corporate news, Imperial Metals Corp (III.TO), a Canada-based miner of base and precious metals, added 0.28 percent after reporting first-quarter net income of $5.9 million or $0.08 per share, down from $10.6 million or $0.14 per share last year.

Ag Growth International Inc. (AFN.TO) gained 2.11 percent after reporting an adjusted profit of $0.52 per share for the first quarter, up from $0.08 per share in the previous corresponding quarter.

B2Gold Corp. (BTO.TO) added 2.32 percent after having reported adjusted net income of $17.5 million or $0.03 per share.

DHX Media Ltd. (DHX.TO) added 4.40 percent after having reported net income of $1.8 million or $0.02 per share for the third quarter, up from $0.9 million or $0.01 per share in the same quarter last year.

TORC Oil & Gas (TOG.TO) jumped 4.45 percent after reporting a first quarter profit of $0.09 per share, compared to $0.03 in the previous quarter.

Sears Holdings Corp. (SHLD) said it is exploring strategic alternatives for its 51 percent interest in multichannel retailer Sears Canada, Inc. (SCC.TO), including a potential sale of Sears Holdings' interest or Sears Canada as a whole. Sears Canada Inc. (SCC:TO) gained 3.43 percent.

In economic news from the U.S., a report from the Labor Department showed producer prices to have risen by much more than anticipated 0.6 percent in April, following a 0.5 percent increase in March. Economists had been expecting producer prices to edge up by about 0.2 percent.

Core producer prices, which exclude food and energy, also showed continued growth, climbing by 0.5 percent in April after rising by 0.6 percent in March. Core prices had been expected to rise by 0.2 percent.

Meanwhile, the Bank of England on Wednesday settled market speculations over an early interest rate hike, indicating it was necessary to absorb the slack in the economy before tightening policy rates. The central bank in its May Inflation Report said policymakers see more scope to make greater inroads into slack before raising the interest rate.

The U.K. unemployment rate dropped to a five-year low in the first quarter, as economic recovery added more jobs and pay growth exceeded consumer price inflation. The ILO jobless rate declined to 6.8 percent during January to March, the lowest since February 2009, from 7.2 percent in October to December, data from the Office for National Statistics showed Wednesday. The rate came in line with expectations.

Eurozone industrial production dropped in March, driven by declines in the output of the big four countries, raising concerns over the strength of the economic recovery in the 18-nation economy. Production shrunk 0.3 percent in March following a 0.2 percent increase in the previous month. This was in line with economists' expectations.

All the big four economies registered declines in output during March, with production falling 0.2 percent in Germany and 0.7 percent in France. Output fell 0.6 percent in Spain and 0.5 percent in Italy.