TSX Ends Higher On Data, Growth Optimism - Canadian Commentary

(RTTNews) - Canadian stocks ended higher Thursday, on some upbeat macroeconomic data led mostly by resource stocks and surging oil prices. Investors sentiments improved with the U.S. Federal Reserve providing no cue as to when the central bank would begin tapering down its monetary stimulus program.

In some encouraging economic news, the U.S. Labor Department said initial jobless claims unexpectedly fell to a five-year low in the week ended July 27-- the lowest level since hitting the week ended January 19, 2008. The data has generated some optimism ahead of Friday's monthly jobs report, which could have a significant impact on the economic outlook.

The S&P/TSX Composite Index closed Thursday at 12,593.96, up 107.32 points or 0.86 percent. The index touched an intraday high of 12,623.43 and a low of 12,486.64.

The Capped Materials Index shed 1.97 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) up 2.42 percent.

The Global Gold Index slipped 1.97 percent, with gold futures for December delivery shedding $1.80 or 0.1 percent to close at $1,311.20 an ounce Thursday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) dropped 1.12 percent. IAMGOLD Corp. (IMG.TO) shed 1.89 percent, while Goldcorp Inc. (G.TO) lost 1.97 percent.

Barrick Gold Corp. (ABX.TO) gained 2.71 percent after reporting a second-quarter net loss of $8.56 billion or $8.55 per share, compared to profit of $787 million or $0.79 per share in the year ago quarter. Adjusted net earnings for the quarter were $663 million or $0.66 per share compared to $821 million or $0.82 per share a year ago. Analysts expected earnings of $0.56 per share for the quarter.

Yamana Gold Inc. (YRI.TO) plunged 6.80 percent after it swung to loss in second-quarter, reporting net loss of $7.9 million or $0.01 per share compared to net income of $42.9 million or $0.06 per share last year. Adjusted earnings were $50.2 million or $0.07 per share compared to $134.9 million or $0.18 per share last year. Analysts expected earnings of C$0.10 per share for the quarter.

The Diversified Metals & Mining Index gained 1.48 percent, with First Quantum Minerals Ltd. (FM.TO) up 0.79 percent. Osisko Mining Corp. (OSK.TO) fell 3.97 percent, while Teck Resources Limited (TCK.B.TO) gained2.04 percent. Lundin Mining Corp. (LUN.TO) added 0.74 percent.

The Energy Index jumped 2.25 percent, with U.S. crude oil futures for September delivery surging $2.86 or 2.7 percent to close at $107.89 a barrel Thursday on the Nymex.

Among energy stocks, Cenovus Energy Inc. (CVE.TO) gathered 0.92 percent, while Talisman Energy (TLM.TO) moved down 0.34 percent. Encana Corp. (ECA.TO) gained 0.50 percent, while Tourmaline Oil Corp. (TOU.TO) jumped 4.45 percent.

Integrated oil company Suncor Energy (SU.TO) jumped 3.94 percent after reporting second quarter operating earnings of C$934 million or C$0.62 per common share down from C$1.249 billion or C$0.80 per common share in the prior year. Analysts expected earnings of C$0.63 per share for the quarter.

Oil and gas pipelines operator Enbridge, Inc.(ENB.TO) gathered 1.34 percent after reporting a much improved second-quarter earnings of C$42 million or C$0.05 per share compared to C$8 million or C$0.01 per share recorded last year. Adjusted earnings for recent quarter totaled C$306 million or C$0.38 per share. Analysts expected earnings per share of C$0.39 for the quarter.

The Financial Index gained 0.45 percent with Bank of Montreal (BMO.TO) up 0.03 percent, Royal Bank of Canada (RY.TO) shed 0.34 percent, and Toronto-Dominion Bank gained 0.28 percent. Bank of Nova Scotia (BNS.TO) edged down 0.02 percent, while National Bank of Canada (NA.TO) dipped 0.25 percent.

The Information Technology Index moved up 0.35 percent, with BlackBerry Limited (BB.TO) up 0.55 percent.

The Capped Industrials Index added 1.34 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 0.20 percent. Bombardier slipped after an improved second-quarter net income at $180 million or $0.10 per share compared to $147 million or $0.08 per share in the same quarter last year. On an adjusted basis, net income amounted to $158 million, or $0.09 per share, compared to $167 million, or $0.09 per share for the same period the previous year.

Stock market operator TMX Group (X.TO) rose 3.74 percent after reporting that its second-quarter income from operations declined to C$67.3 million from C$85.2 million in the year ago quarter. Net income attributable to shareholders was C$25.5 million or C$0.47 per share, compared to a loss of C$28.4 million or C$33.99 per share last year.

In economic news from the U.S, the Labor Department said initial jobless claims fell to 326,000, a decrease of 19,000 from the previous week's revised figure of 345,000. The decrease surprised economists, who had expected jobless claims to edge up to 345,000 from the 343,000 originally reported for the previous week.

Separately, the Institute for Supply Management said its purchasing managers index surged up 55.4 in July from 50.9 in June, with a reading above 50 indicating growth in U.S. manufacturing activity. Economists had expected the index to climb to a reading of 53.1.

The U.S. Commerce Department report on Thursday showed an unexpected drop in total construction spending for June. Construction spending fell 0.6 percent to a seasonally adjusted annual rate of $883.9 billion in June. Economists expected spending to increase by about 0.4 percent.

European Central Bank President Mario Draghi on Thursday said recent survey data showed improvement in the euro area economy, suggesting interest rates to likely remain low in the near term.

European Central Bank President Mario Draghi in his routine post-decision press conference in Frankfurt said, "Recent confidence indicators based on survey data have shown some further improvement from low levels and tentatively confirm the expectation of a stabilization in economic activity."

The central bank left the main refinancing rate steady at a record low 0.50 percent today. The rate was slashed by quarter-basis point in May, the first rate cut in nine months. The bank also held the marginal lending facility rate at 1 percent, following a 50 basis points cut in May. The zero deposit rate was also left unchanged

Elsewhere, the eurozone manufacturing sector expanded for the first time since July 2011, survey data from Markit Economics showed. The Purchasing Managers' Index rose to 50.3 in July from 48.8 in June and above the flash estimate of 50.1.

An indicator of the performance of the German manufacturing sector increased in July to the highest level in on-and half years, indicating an improvement in operating conditions across the sector, survey data released by Markit Economics and BME showed. The seasonally adjusted manufacturing purchasing managers' index rose to 50.7 in July from 48.6 in June. The flash estimates were for a reading of 50.3. Readings above 50 indicates expansion of the sector, while those below suggest contraction.

The Bank of England retained the asset purchase facility at GBP 375 billion and interest rate at a record low 0.50 percent, as widely expected. Meanwhile, the European Central Bank retained its refi rate at a record low 0.50 percent.