Canadian Stocks Are Declining As Oil Prices Fall -- Canadian Commentary

(RTTNews) - The Canadian stock market is pulling back Wednesday morning, following 4 consecutive days of gains. The market is under pressure due to the weakness in the energy sector. Oil prices are falling this morning on concerns of oversupply, following a 4-day rally in the price of crude. However, gold prices are rising this morning, attempting to bounce back from recent weakness.

The majority of the European markets are also modestly lower on Wednesday, following a sharp 2-day rally. Investors continue to monitor the developments in Greece. Greece's new Finance Minister, Yanis Varoufakis, said in an interview published today that Greece has started negotiations with the International Monetary Fund over a plan to lessen the burden of the country's hefty debt burden.

Markets in the United States are also struggling this morning, after ending the two previous sessions sharply higher. The markets endured early selling pressure after the ADP private sector employment report came in weaker than expected. The disappointing data may raise some concerns about Friday's employment report from the Labor Department, which includes both public and private sector jobs.

Private sector employment in the U.S. rose by less than expected in the month of January, according to a report released by payroll processor ADP on Wednesday. ADP said private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December.

Economists had expected employment to climb by about 223,000 jobs compared to the addition of 241,000 jobs originally reported for the previous month.

After reporting a notable slowdown in the pace of growth in U.S. service sector activity in the previous month, the Institute for Supply Management released a report on Wednesday showing a modest uptick by its index of activity in the sector in January.

The ISM said its non-manufacturing index inched up to 56.7 in January from an upwardly revised 56.5 in December, with a reading above 50 indicating growth in the service sector. Economists had expected the non-manufacturing index to edge up to 56.5 from the 56.2 originally reported for the previous month.

The benchmark S&P/TSX Composite Index is down 75.53 points or 0.50 percent at 14,987.35. The index hit a low of 14,939.17 this morning and a high of 15,043.46.

On Tuesday, the index closed up 162.30 points or 1.09 percent, at 15,062.77. The index scaled an intraday high of 15,154.92 and a low of 14,955.79.

The Energy Index is the biggest drag on the market this morning, decreasing by 3.27 percent. Canadian Natural Resources (CNQ.TO) is lower by 2.83 percent and Cenovus Energy (CVE.TO) is decreasing by 3.59 percent. Suncor Energy (SU.TO) is losing 3.29 percent. Encana (ECA.TO) is falling by 3.24 percent and Imperial Oil (IMO.TO) declining by 2.17 percent.

Legacy Oil + Gas (LEG.TO) is sinking by 5.74 percent and Canadian Oil Sands (COS.TO) is down 5.44 percent. Pacific Rubiales Energy (PRE.TO) is lower by 6.83 percent and Vermilion Energy (VET.TO) is losing 6.26 percent. Bonterra Energy (BNE.TO) is weakening by 3.33 percent and CrescentPoint Energy (CPG.TO) is down 3.35 percent.

Lundin Petroleum (LUP.TO) is rising by 5.72 percent. The company reported fourth quarter revenues of $135.2 million, compared to $274.1 million last year.

The Diversified Metal and Mining Index is also dropping by 2.29 percent. Lundin Mining (LUN.TO) is losing 3.71 percent and First Quantum Minerals (FM.TO) is down 2.10 percent. Teck Resources (TCK-B.TO) is falling by 2.45 percent and Finning International (FTT.TO) is decreasing by 3.22 percent. HudBay Minerals (HBM.TO) is falling by 2.14 percent and Turquoise Hill Resources (TRQ.TO) is lower by 2.24 percent.

The heavyweight Financial Index is also slipping by 0.46 percent. National Bank of Canada (NA.TO) is lower by 1.26 percent and Bank of Nova Scotia (BNS.TO) is losing 0.50 percent. Toronto-Dominion Bank (TD.TO) is down 0.63 percent and Royal Bank of Canada (RY.TO) is declining by 0.74 percent. Bank of Montreal (BMO.TO) is dipping by 0.42 percent and Canadian Imperial Bank of Commerce (CM.TO) is slipping by 0.34 percent.

The Gold Index is rising by 1.96 percent, as the price of gold stabilizes. Royal Gold (RGL.TO) is increasing by 2.78 percent and Kinross Gold (K.TO) is up 2.70 percent. Goldcorp (G.TO) is gaining 1.76 percent and Yamana Gold (YRI.TO) is higher by 2.35 percent. B2Gold (BTO.TO) is climbing by 1.32 percent and Eldorado Gold (ELD.TO) is higher by 3.24 percent.

The Capped Materials Index is also up 0.92 percent, mostly on the increase in gold prices. Barrick Gold (ABX.TO) is up 2.68 percent and Silver Wheaton (SLW.TO) higher by 1.68 percent. Franco-Nevada (FNV.TO) is gaining by 1.80 percent and Agnico Eagle Mines (AEM.TO) is rising 1.82 percent. Potash Corp. of Saskatchewan (POT.TO) is also increasing by 0.69 percent.

The Capped Health Care Index is rising by 0.59 percent. Valeant Pharmaceuticals International (VRX.TO) is increasing by 1.67 percent.

The Capped Information Technology Index is advancing by 0.92 percent. Constellation Software (CSU.TO) is increasing by 1.69 percent and BlackBerry (BB.TO) is up 0.73 percent. Sierra Wireless (SW.TO) is higher by 0.76 percent and Descartes Systems Group (DSG.TO) is gaining 0.57 percent.

Fairfax Financial Holdings (FFH.TO) is climbing by 0.41 percent. The company has entered into an agreement with QBE Management (Ireland) Limited and its Ukrainian partner to acquire QBE's insurance operations in Ukraine.

Intact Financial (IFC.TO) is also gaining 0.29 percent. The company's fourth quarter net operating income increased by 75 percent to $1.84 per share.

ProMetric Life Sciences (PLI.TO) is higher by 0.54 percent, after its PBI-4050 was cleared to commence clinical trials in patients with Idiopathic Pulmonary Fibrosis.

On the economic front, China's service sector expansion slowed in January, figures from Markit Economics and HSBC Bank showed Wednesday. The services business activity index fell to 51.8 in January from 53.4 in December. This marked the slowest expansion rate in six months.

Eurozone retail sales grew at a slower pace in December, Eurostat showed Wednesday. Retail sales grew 0.3 percent month-on-month in December, slower than November's 0.7 percent increase.

Nonetheless, this was the third consecutive rise in sales and better than economists' forecast for a flat growth.

The Eurozone private sector expanded at the fastest pace since July last year as output expanded in Germany, Italy and Spain. But the downturn in the French economy extended into its ninth month. The final composite output index rose to 52.6 in January from 51.4 in December. It was also above the flash reading of 52.2.

Germany's service sector activity growth accelerated at the beginning of 2015 amid rising new business, survey data from Markit Economics showed Wednesday. The final services Purchasing Managers' Index climbed to 54 in January from 52.1 in December. The flash score was 52.7.

The French service sector fell back into negative territory in January, reversing a marginal growth in the prior month, final data from Markit showed Wednesday. The services PMI fell to 49.4 from 50.6 in December. It stayed also below the flash score of 49.5.

The U.K. service sector expanded more than expected in January as new business rose at a faster pace, survey data from Markit showed Wednesday. The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index rose to 57.2 in January from 55.8 in December. The score was forecast to rise to 56.3.

In commodities, crude oil futures for March delivery are down $2.04 or 3.85 percent at $51.01 a barrel.

Natural gas for March is down $0.063 or 2.29 percent at $2.691 per million btu.

Gold futures for April are up $8.30 or 0.66 percent at $1,268.50 an ounce.

Silver for March is up $0.224 or 1.29 percent at $17.545 an ounce.