TSX Rebounds To End Sharply Higher -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a four-day loss to end sharply higher on Thursday, on some mixed economic data from the U.S. and investors opting for some bargain hunting after recent steep losses that had sent the market crashing down to an eight-month low.

In some upbeat economic news from the U.S., initial claims for unemployment benefits declined to its lowest level in fourteen years, while industrial production rebounded more than expected, helping allay fears about the state of the U.S. economy.

Nonetheless, data showing a slower pace of growth in Philadelphia area manufacturing activity in October and an unexpected drop in U.S. homebuilder confidence, limited the market's upside.

Investors also largely ignored some disappointing Canadian factory sales data for August that registered the first decline this year -- the biggest drop in five years.

The gains made by the main index was led by energy, industrials, healthcare, and financial sectors. The main index was severely hit this week with mounting concerns over the global economy and added worries the U.S. Federal Reserve could raise interest rates sooner than later.

The benchmark S&P/TSX Composite Index closed Thursday at 14,052.97, up 183.09 points or 1.32 percent. The index scaled a intraday high of 14,166.33 and a low of 13,646.79 -- the lowest level since February 7, 2014.

On Wednesday, the index closed at 13,869.88, down 166.80 points or 1.19 percent, after plummeting to 13,677.34 intraday.

Crude oil rebounded to end sharply higher after a weekly oil report from the U.S. Energy Information Administration showed gasoline inventories to have dropped more than expected last week, notwithstanding a surge in crude oil inventories.

A weekly report from the U.S. Energy Information Administration showed crude oil inventories to have risen by 8.9 million barrels in the week ended October 10, while analysts anticipated an increase of 2.8 million barrels. Gasoline stocks dropped by 4.0 million barrels last week, with analysts anticipating a decrease of 1.4 million barrels.

The Energy Index surged 3.24 percent, with U.S. crude oil futures for November delivery gaining $0.92 or 1.1 percent to close at $82.70 a barrel on the Nymex Thursday.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) jumped 4.27 percent, Talisman Energy Inc. (TLM.TO) added 2.07 percent, and Bankers Petroleum Ltd. (BNK.TO) jumped 6.80 percent.

Suncor Energy Inc. (SU.TO) gained 2.29 percent, Enbridge Inc. (ENB.TO) added 2.96 percent, and Encana Corp. (ECA.TO) moved up 1.05 percent.

The Financial Index added 0.58 percent, with Toronto-Dominion Bank (TD.TO) gaining 1.62 percent, Canadian Imperial Bank of Commerce (CM.TO) up 0.58 percent, Bank of Nova Scotia (BNS.TO) up 0.09 percent, Bank of Montreal (BMO.TO) up 0.14 percent, and National Bank of Canada (NA.TO) slipped 0.34 percent.

Royal Bank of Canada (RY.TO) dropped 0.01 percent, while Manulife Financial Corp. (MFC.TO) gained 0.10 percent.

Gold futures ended lower on some mixed economic data from the U.S. with equity markets rallying to move into positive territory.

The Global Gold Index slipped 0.24 percent, with gold for December delivery shedding $3.60 or 0.3 percent to settle at $1,241.20 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) gained 1.37 percent, Yamana Gold Inc. (YRI.TO) down 1.22 percent, Eldorado Gold Corp. (ELD.TO) dived 4.09 percent, and Goldcorp Inc. (G.TO) gathered 1.09 percent.

The Capped Materials Index dropped 0.43 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) surrendering 1.68 percent.

The Diversified Metals & Mining Index shed 0.95 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 1.66 percent and Teck Resources Limited (TCK.B.TO) shed 2.46 percent.

The Capped Industrials Index jumped 2.45 percent, with Bombardier Inc. (BBD.B.TO) gaining 0.85 percent, Canadian Pacific Railway Limited (CP.TO) up 4.54 percent and Canadian National Railway (CNR.TO) gathered 2.00 percent.

The Information Technology Index gained 0.58 percent, with smartphone maker BlackBerry Limited (BB.TO) gathering 1.76 percent.

The Healthcare Index gathered 1.55 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) up 3.75 percent, Catamaran Corp. (CCT.TO) down 0.35 percent, and Extendicare Inc. (EXE.TO) up 1.17 percent.

The Telecom Index added 0.42 percent with Rogers Communications Inc. (RCI.B.TO) down 0.05 percent, BCE Inc. (BCE.TO) up 0.13 percent, and TELUS Corp. (T.TO) up 0.72 percent.

Semafo Inc. (SMF.TO) gained 0.95 percent after indicating it will make a takeover bid for 100 percent of Orbis Gold Ltd. (OBS.AX) at A$0.65 per share, payable in cash, subject to certain conditions.

Oryx Petroleum Corporation Limited (OXE.TO) shed 0.42 percent after indicated that it has acquired an 85 percent interest in the AGC Central license located in the joint development offshore area between Senegal and Guinea Bissau.

On the economic front, a Federal Reserve report on Thursday showed industrial production in the U.S. rebounded much more than expected in September, after an unexpected drop in production in the previous month.

The Federal Reserve said industrial production in the U.S. surged by 1.0 percent in September after edging down by a revised 0.2 percent in August. Economists expected production to increase by about 0.4 percent compared to the 0.1 percent drop originally reported for the previous month.

First-time claims for U.S. unemployment benefits unexpectedly declined in the week ended October 10, a report from the Labor Department showed Thursday, with initial jobless claims falling to their lowest level in over fourteen years. Initial jobless claims fell to 264,000, a decrease of 23,000 from the previous week's unrevised level of 287,000. Economists expected jobless claims to edge up to 290,000 last week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 259,000 in the week ended April 15, 2000.

A report from the National Association of Home Builders showed homebuilder confidence in the U.S. to have deteriorated notably in October, with the NAHB/Wells Fargo Housing Market Index dropping to 54 in October after jumping to a nearly nine-year high of 59 in September. Economists expected the index to come in unchanged compared to the previous month.

A report from the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area grew at a slower rate in the month of October. The Philly Fed's diffusion index for current activity edged down to 20.7 in October from 22.5 in September. Economists expected the index to dip to a reading of 20.0.

Elsewhere, data from Eurostat showed eurozone inflation to have declined to 0.3 percent in September, the lowest since late 2009, raising fears of deflation.