TSX Ends Higher After Rate Cut -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a fourth straight session on Wednesday, after Bank of Canada decided to lower its interest rate, even as the U.S. Fed Chief Janet Yellen indicated a likely rate hike this year.

The Bank of Canada trimmed its interest rate to 0.50 percent from 0.75 percent this morning. The rate cut was in line with expectations and was the second time this year that interest rates have been cut.

Federal Reserve Chairman Janet Yellen gave a relatively upbeat assessment of the U.S economy Wednesday morning in semiannual testimony before Congress. With the economy expected to pick up in the coming months, Yellen thinks the Fed will raise interest rates by the end of the year.

The majority of the European markets ended on the upside Wednesday. The Greek parliament is set to vote on the deal agreed by eurozone leaders early this week, in exchange for a new bailout. The deal needs to be approved by the other 18 national parliaments of the euro area before starting fresh negotiations.

The International Monetary Fund said Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far. Eurozone finance ministers will hold a conference call on Wednesday to discuss the Greece situation.

Markets in the United States ended in the red after Federal Reserve Chair Janet Yellen's comments on rate hike and the violent protests in Greece ahead of the parliamentary vote on the bailout plan.

In some upbeat economic news, U.S. producer prices rose slightly more than expected in June, with energy prices showing another significant increase.

Meanwhile, industrial production in the U.S. rose slightly more than expected in June, a Federal Reserve report showed Wednesday, with the increase reflecting jumps in mining and utilities output. As well, business conditions for New York manufacturers improved slightly in July, a report from the Federal Reserve Bank of New York on Wednesday.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,662.28, up 62.88 points or 0.43 percent. The index scaled an intraday high of 14,706.34 and a low of 14,541.74.

On Tuesday, the index closed up 66.18 points or 0.46 percent, at 14,599.40. The index scaled an intraday high of 14,613.45 and a low of 14,453.68.

Crude oil futures slipped to a near three-month low on Wednesday, on renewed concerns of a supply glut with Iranian crude oil expected to flood markets after lifting of sanctions.

The drop comes after official data from the Energy Information Administration showed crude stockpiles in the U.S. to have declined more than expected last week.

The U.S. Energy Information Administration report showed U.S. crude oil inventories to have dropped 4.3 million barrels in the week ended July 10, while analysts expected stocks to decline 1.8 million barrels. The report showed total U.S. crude oil inventories at 461.4 million barrels end last week.

The Energy Index fell 1.25 percent, with U.S. crude oil futures for August delivery plummeting $1.63 or 3.1 percent, to settle at $51.41 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) added 0.31 percent, while Canadian Natural Resources Limited (CNQ.TO) shed 1.17 percent. Crescent Point Energy Corp. (CPG.TO) dropped 1.03 percent, while Encana Corp. (ECA.TO) surrendered 2.04 percent.

Pacific Rubiales Energy Corp. (PRE.TO) gained 6.91 percent, after announcing second quarter total net production is expected to be between 151 and 153 Mboe/d, which is approximately 2 percent higher than a year ago.

Cenovus Energy Inc. (CVE.TO) fell 1.13 percent, Canadian Oil Sands (COS.TO) dived 3.35 percent, and Enbridge (ENB.TO) added 0.53 percent.

Gold futures slipped to end at an eight-month low after some upbeat economic data from the U.S. and indications from Federal Reserve Chief Janet Yellen of a likely interest-rate hike this year.

The Gold Index shed 0.99 percent, with gold for August delivery dropping $6.10 or 0.5 percent, to settle at $1,147.40 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 0.97 percent, Barrick Gold Corp. (ABX.TO) slipped 0.95 percent, and Yamana Gold Inc. (YRI.TO) fell 2.70 percent. IAMGOLD Corp. (IMG.TO) fell 1.75 percent.

Cogeco Inc. (CGO.TO) declined 1.90 percent, after reporting third quarter EPS of $1.34, compared to $0.68 in the prior year.

The Capped Materials Index surrendered 0.65 percent, as Agrium Inc. (AGU.TO) gained 0.92 percent and Agnico Eagle Mines Limited (AEM.TO) slipped 0.37 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) moved up 0.99 percent.

The Diversified Metals & Mining Index dropped 1.42 percent, as First Quantum Minerals Ltd. (FM.TO) fell 2.50 percent, and HudBay Minerals (HBM.TO) fell 3.17 percent. Sherritt International (S.TO) dropped 0.84 percent, while Teck Resources Limited (TCK-B.TO) fell 0.66 percent. Lundin Mining Corp. (LUN.TO) dived 2.69 percent.

The heavyweight Financial Index gained 0.70 percent, as National Bank of Canada (NA.TO) added 0.20 percent, and Bank of Montreal (BMO.TO) moved up 0.93 percent.

Toronto-Dominion Bank (TD.TO) moved up 1.05 percent, while Canadian Imperial Bank of Commerce (CM.TO) added 0.47 percent. Royal Bank of Canada (RY.TO) gathered 0.43 percent.

Bank of Nova Scotia (BNS.TO) declined 0.19 percent, after agreeing to acquire Citigroup's retail and commercial banking businesses in Panama and Costa Rica.

The Capped Health Care Index added 1.39 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) added 0.61 percent, Concordia Healthcare Corp. (CXR.TO) fell 6.73 percent, and.

Extendicare (EXE.TO) climbed 5.32 percent, after the company declared a July cash dividend of C$0.04 per common share.

Catamaran Corp. (CCT.TO) advanced 1.50 percent after shareholders approved the previously announced acquisition by UnitedHealth Group.

The Capped Industrials Index gained 0.75 percent, as Bombardier Inc. (BBD-A.TO) dropped 4.04 percent and Finning International Inc. (FTT.TO) moved up 0.21 percent. Canadian National Railway (CNR.TO) gathered 2.56 percent, while Air Canada (AC.TO) fell 0.75 percent.

Canadian Pacific Railway (CP.TO) added 1.41 percent.

The Capped Information Technology Index moved up 0.24 percent, as BlackBerry Limited (BB.TO) dipped 0.10 percent and Constellation Software (CSU.TO) moved up 0.20 percent. Descartes Systems Group (DSG.TO) fell 0.20 percent, while Avigilon (AVO.TO) surrendered 2.07 percent.

The Capped Telecommunication Index gained 1.06 percent, as Rogers Communication (RCI-B.TO) added 0.77 percent, TELUS Corp. (T.TO) added 0.95 percent, BCE Inc. (BCE.TO) moved up 0.92 percent, and Manitoba Telecom Services (MBT.TO) gained 0.69 percent.

On the economic front, Statistics Canada reported Wednesday morning that Canadian manufacturing sales rose by 0.1 percent in May. Economists had been expecting an increase of 0.4 percent.

A Labor Department report on Wednesday showed U.S. producer prices to have risen slightly more than expected in June, with the index rising 0.4 percent following a 0.5 percent increase in May. Economists expected prices to climb by 0.3 percent in June.

Industrial production in the U.S. rose slightly more than expected in June, the Federal Reserve revealed in a report on Wednesday, with the increase reflecting jumps in mining and utilities output. Industrial production increased 0.3 percent in June after edging down 0.2 percent in May. Economists expected production to rise by 0.2 percent.

Business conditions for New York manufacturers have improved slightly in July, a report from the Federal Reserve Bank of New York said Wednesday. The general business conditions index climbed to a positive 3.9 in July from a negative 2.0 in June, with a positive reading indicating growth in regional manufacturing activity. The index was expected to rise to a positive 3.0.

China's second quarter economic growth exceeded expectations, helped by stimulus, suggesting that the government remains on track to achieve its target this year. Gross domestic product grew 7 percent year-over-year in the second quarter, the same rate of growth as seen in the first quarter, the National Bureau of Statistics reported Wednesday. The rate was faster than the 6.8 percent rise forecast by economists.

French consumer price inflation held steady in June, in line with consensus estimate, figures from the statistical office Insee showed Wednesday. The consumer price index rose 0.3 percent year-over-year in June, the same rate of increase as in May. The figures was also matched with economists' expectations. It was the third successive monthly rise.

U.K. jobless claims increased unexpectedly in June, data from the Office for National Statistics revealed Wednesday. The number of people claiming job-seeker's allowance increased by 7,000 in June from May, confounding expectations for a decline of 9,000. This was the first increase since October 2012. At the same time, the claimant count rate held steady at 2.3 percent in June as expected by economists.

U.K. unemployment increased and employment declined in the three months to May, data from the Office for National Statistics revealed Wednesday. At the same time, wages grew at the fastest pace in more than five years.

During the March to May period, the jobless rate in the U.K. calculated based on the ILO standards came in at 5.6 percent. The rate was forecast to be at 5.5 percent, the same as logged in the three months to April, which was also the lowest since April-June 2008. However, the jobless rate was well below the 6.5 percent seen a year earlier, the statistical office said.