TSX Settles Lower As Gold Mining Stocks Slip -- Canadian Commentary

(RTTNews) - Canadian stocks slipped to end lower for a second straight session on Friday, after gold mining stocks declined as the dollar trended higher, even as the market received an early boost from the strong Canadian employment data, as well as the solid U.S. employment report. However, weakness in commodity prices has limited the upside move.

Canada added 58,900 jobs in May, driven by gains in the number of private sector employees, a report from Statistics Canada said Friday. Economists had been looking for an increase of only 10,000 jobs.

The Canadian unemployment rate came in unchanged at 6.8 percent in May, in line with economists' expectations.

Markets in the United States were also under pressure under pressure with some lackluster performance throughout much of the trading session on Friday, eventually ending the session mixed. The choppy trade comes on the heels of the sell-off seen in the previous session.

The country's much stronger than expected job growth in May has raised concerns about the outlook for interest rates. The strength of the report has investors wondering if a rate increase could be announced as early as this month. Others seem more confident that an increase will occur in September.

Employment in the U.S. increased much more than anticipated in May, a report from the Labor Department said on Friday. Non-farm payroll employment jumped by 280,000 jobs in May compared to economists' estimates for an increase of about 225,000 jobs.

Markets in Europe were also under pressure at the end of the trading week. Greece has decided to bundle its loan repayments due this month into one payment of around $1.6 billion to be paid at the end of the month. This was the first time during the five-year long crisis that the country delayed a payment to the IMF.

The benchmark S&P/TSX Composite Index closed Friday at 14,957.16, down 62.23 points or 0.41 percent. The index scaled an intraday high of 15,060.90 and a low of 14,946.00.

On Thursday, the index closed down 135.39 points or 0.89 percent, at 15,019.39. The index scaled an intraday high of 15,114.51 and a low of 14,957.57.

Gold futures slipped for a third consecutive day to end lower after some strong U.S. jobs data with a stronger than expected growth in May, fueling fears of an interest rate hike by the Fed Reserve sooner than later.

The Gold Index dived 2.28 percent, with gold for August delivery dropping $7.10 or 0.6 percent to settle at $1,168.10 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 2.68 percent, Barrick Gold Corp. (ABX.TO) fell 2.67 percent, and Eldorado Gold Corp. (ELD.TO) slipped 0.53 percent.

The Capped Materials Index dropped 1.18 percent, with Agrium Inc. (AGU.TO) down 0.74 percent. Agnico Eagle Mines Limited (AEM.TO) fell 3.18 percent, while Franco-Nevada Corp. (FNV.TO) slipped 1.46 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) dropped 0.60 percent.

Crude oil futures ended higher after the Organization of the Petroleum Exporting Countries decided to maintain its current production levels even as concerns of a supply glut scenario persisted.

The Energy Index inched up 0.05 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, jumped $1.13 or 2.0 percent, to settle at $58.94 a barrel on the New York Mercantile Exchange Friday.

Among energy stocks, Suncor Energy Inc. (SU.TO) fell 0.33 percent, while Crescent Point Energy Corp. (CPG.TO) shed 0.26 percent. Encana Corp. (ECA.TO) dropped 0.26percent, and Canadian Natural Resources Limited (CNQ.TO) surrendered 0.48 percent.

Canadian Oil Sands Limited (COS.TO) added 2.0 percent, while Pacific Rubiales Energy Corp. (PRE.TO) dropped 0.87 percent.

Cenovus Energy (CVE.TO) climbed 0.79 percent, after agreeing to buy Canexus Corp's North American Terminal Operations, a crude-by-rail trans-loading facility, for $75 million.

Major Drilling Group (MDI.TO) jumped 6.39 percent, after reporting a fourth quarter loss of $0.16 per share, compared to the loss of $0.31 per share last year.

Delphi Energy (DEE.TO) surged 6.25 percent, after it agreed to sell its working interests in Greater Wapiti for $50 million.

The Diversified Metals & Mining Index added 0.05 percent, as First Quantum Minerals Ltd. (FM.TO) dipped 0.23 percent, Lundin Mining Corp. (LUN.TO) gained 0.52 percent, and Sherritt International Corp. (S.TO) fell 0.41 percent. Teck Resources (TCK.B.TO) dived 0.82 percent.

The heavyweight Financial Index dipped 0.07 percent, as National Bank of Canada (NA.TO) dipped 1.29 percent, and Bank of Montreal (BMO.TO) fell 0.20 percent.

Royal Bank of Canada (RY.TO) fell 0.53 percent, after announcing the closure of its domestic public offering of Non-Cumulative, Preferred Shares Series BH.

Bank of Nova Scotia (BNS.TO) surrendered 0.09 percent, while Toronto-Dominion Bank (TD.TO) fell 0.15 percent. Canadian Imperial Bank of Commerce (CM.TO) dropped 0.39 percent.

The Capped Health Care Index gained 1.11 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) moved up 0.42 percent, Concordia Healthcare Corp. (CXR.TO) jumped 4.71 percent, and Catamaran Corp. (CCT.TO) dropped 0.65 percent.

The Capped Industrials Index inched up 0.01 percent, as Bombardier Inc. (BBD-A.TO) added 0.40 percent, Finning International Inc. (FTT.TO) dipped 0.04 percent. Canadian Pacific Railway Limited (CP.TO) added 0.39 percent, while Canadian National Railway (CNR.TO) fell 0.53 percent. CAE Inc. (CAE.TO) gained 1.82 percent, while Air Canada (AC.TO) fell 0.42 percent.

The Information Technology Index dipped 0.50 percent, after Sierra Wireless, Inc. (SW.TO) fell 1.95 percent and Descartes Systems Group Inc. (DSG.TO) shed 0.43 percent. However, BlackBerry Inc. (BB.TO) slipped 0.49 percent and Constellation Software Inc. (CSU.TO) surrendered 1.12 percent.

The Capped Telecommunication Index fell 0.75 percent, as Rogers Communications Inc. (RCI.B.TO) dropped 1.85 percent, TELUS Corp. (T.TO) dropped 0.77 percent, and BCE Inc. (BCE.TO) surrendered 0.67 percent.

Calfrac Well Services (CFW.TO) lost 3.14 percent, after Moody's downgraded its corporate rating to B2 from Ba3.

On the economic front, Canadian labor productivity dipped by 0.1 percent in the first quarter, a report from statistics Canada showed Friday. Economists expected a decrease of 0.2 percent. Unit labor costs for the quarter rose by 1.2 percent, but hours worked fell by 0.2 percent.

Employment in Canada rose by 58,900 in May, compared to the drop of 19,700 in April, a Statistics Canada report said Friday. Economists expected an increase of 10,000 jobs for the month. Meanwhile, employment in manufacturing rose by 21,500 in May.

From south of the border, employment in the U.S. increased much more than anticipated in May, a report from the Labor Department showed Friday. Non-farm payroll employment jumped by 280,000 jobs in May compared to economist estimates for an increase of about 225,000 jobs.

While the increase in employment in April was downwardly revised to 221,000 jobs from 223,000 jobs, the employment growth in March was upwardly revised to 119,000 jobs from 85,000 jobs.

However, the report also showed that the unemployment rate inched up to 5.5 percent in May from a near seven-year low of 5.4 percent in April. The increase came as a surprise to economists, who had expected the unemployment rate to remain unchanged, but the uptick primarily reflected an increase in the size of the labor force.

In Europe, Germany's factory order growth exceeded expectations in April helped by foreign demand, data from Destatis revealed Friday. Factory orders increased 1.4 percent month-on-month, faster than the 1.1 percent growth in March and a 0.5 percent rise forecast by economists. It was also the fastest growth since December, when it rose 3.3 percent.

France' foreign trade deficit decreased more-than-expected in April, as exports rose and imports fell, figures from the Customs Office showed Friday. The trade deficit declined to EUR 3.0 billion in April from EUR 4.4 billion in the previous month. Economists had expected a shortfall of EUR 3.95 billion.

The leading index for Japan, which measures the future economic activity, increased as expected in April, preliminary figures from the Cabinet Office showed Friday. The index rose to 107.2 in April from 106.0 in the previous month. This is the second consecutive rise for the index and in line with economists' expectations.

Meanwhile, Japan's foreign reserves decreased in May on lower currency reserves and special drawing rights. The country's foreign reserve assets declined to $1.246 trillion as of May 31, 2015 from $1.250 trillion at April end. At the end of May 2014, the reserves were at $1.284 trillion.