TSX Ends Higher On Growth Optimism -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher Thursday, shedding early weakness on growth optimism, led by financial stocks after some positive economic data from the U.S. Investors, though, mulled over the Federal Reserve Chief Janet Yellen's statement that the central bank may raise its benchmark interest rate in about a year.

The main index bounced back from early weakness as traders shrugged off yesterday's hawkish remarks from new Federal Reserve chief Janet Yellen.

In some positive economic news from the U.S., manufacturing activity in the Philadelphia-area rebounded in March, a Federal Reserve Bank of Philadelphia's survey showed Thursday. Meanwhile, a Conference Board report showed its index of leading U.S. economic indicators rose more than expected in February, suggesting any weather-related volatility would likely be short lived.

The Federal Reserve on Wednesday trimmed another $10 billion from its monthly asset-purchase program, lowering the monthly bond buys to $55 billion. The central bank altered its forward guidance on interest rates, dropping its 6.5 percent unemployment target in favor of a broader range of indicators.

Bond buying could be wound down in six months, with a possible rate hike six months later if the economy grows according to the latest Fed projections, Yellen said.

The S&P/TSX Composite Index closed Thursday at 14,361.83, up 27.29 points or 0.19 percent. The index scaled an intraday high of 14,377.61 and a low of 14,264.81.

Crude oil ended lower on Thursday, with the dollar strengthening after the U.S. Federal Reserve Chief Janet Yellen hinted of an interest rate hike as early as next spring. The supply scenario with a more-than-expected jump in U.S. crude oil inventories last week, also weighed on oil prices.

The Energy Index gained 0.54 percent, with U.S. crude oil futures for May delivery, shed $0.27 or 0.3 percent to close at $98.90 a barrel a barrel Wednesday on the Nymex.

Among energy stocks, Suncor Energy Inc. (SU.TO) slipped 0.19 percent, while Enbridge Inc. (ENB.TO) edged up 0.06 percent. Canadian Natural Resources Ltd. (CNQ.TO) added 1.56 percent, while Encana Corp. (ECA.TO) gathered 0.53 percent.

Gold stocks ended mostly lower, dragged down by weak gold prices. The Global Gold Index added 0.47 percent, with gold futures for April delivery, dropping $10.80 or 0.8 percent to close at $1,330.50 an ounce Thursday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) ended flat at $5.40 a share, while Barrick Gold Corp. (ABX.TO) inched up 0.18 percent. Detour Gold Corp. (DGC.TO) gained 0.75 percent, while Goldcorp Inc. (G.TO) surrendered 0.13 percent.

Osisko Mining Corp. (OSK.TO) ended flat after announcing its Canadian Malartic mine is expected to produce between 525,000 to 575,000 ounces of gold this year, up from 475,277 ounces in 2013.

The Capped Materials Index inched up 0.16 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 0.08 percent.

The big six banks ended in positive territory with moderate gains, contributing to the market's recovery. The heavyweight Financial Index gained 0.63 percent with the Toronto-Dominion Bank (TD.TO) up 0.41 percent, Bank of Nova Scotia (BNS.TO) up 0.12 percent, and Royal Bank of Canada (RY.TO) added 0.49 percent.

The Diversified Metals & Mining Index added 0.72 percent, with Teck Resources Limited (TCK.B.TO) down 0.48 percent, Lundin Mining Corp. (LUN.TO) down 0.60 percent, although First Quantum Minerals (FM.TO) added 1.68 percent.

The Information Technology Index shed 0.08 percent, with BlackBerry Limited (BB.TO) down 1.30 percent.

The Capped Industrials Index slipped 0.81 percent, although Bombardier Inc. (BBD.B.TO) added 1.47 percent after Deutsche Bahn today ordered 29 TALENT 2 multiple units from Bombardier Transportation for the S-Bahn Mitteldeutschland commuter rail service in central Germany.

CAE Inc. (CAE.TO) slipped 0.40 0.8 percent, after announcing the award of a series of contracts valued at more than C$140 million to provide a range of training systems and services for global defense customers.

On the economic front, Statistics Canada said 502,500 people were getting regular employment insurance benefits in January, down 1.9 percent from the previous month. That follows a period of relative stability in the number of EI beneficiaries that began in May 2013.

In economic news from the U.S., manufacturing activity in the Philadelphia-area rebounded in March, a Federal Reserve Bank of Philadelphia's Business Outlook Survey showed Thursday. The Philly Fed's diffusion index of current activity jumped to a positive 9.0 in March from a negative 6.3 in February. A positive reading indicates an increase in regional manufacturing activity. Economists expected the index to show a much more modest rebound to a positive reading of 3.2.

A report from the National Association of Realtors on Thursday showing a modest drop in U.S. existing home sales in February, attributed mainly to rising prices and severe winter weather. Existing home sales edged down 0.4 percent to a seasonally adjusted annual rate of 4.60 million in February after falling 5.1 percent to a rate of 4.62 million in January. The drop was in line with economists' estimates. The pace of existing home sales dropped to its lowest level since July of 2012, when it was 4.59 million.

A Labor Department report on Thursday showed a modest rebound in initial jobless claims in the week ended March 15, after reporting first-time claims for U.S. unemployment benefits at a three-month low in the previous week. Initial jobless claims edged up to 320,000, an increase of 5,000 from the previous week's unrevised figure of 315,000. Economists expected jobless claims at 325,000.

A Conference Board report on Thursday showed its index of leading U.S. economic indicators rose more than expected in February, suggesting any weather-related volatility will be short lived. The Conference Board's leading economic index rose by 0.5 percent in February after edging up by a downwardly revised 0.1 percent in January. Economists expected the index to rise by 0.3 percent, matching the increase originally reported for the previous month.

From Europe, the U.K. manufacturing sector activity remained robust in March with an overall increase in demand, the Industrial Trends Survey from the Confederation of British Industry showed Thursday.