TSX Ends Lower As Energy Stocks Decline -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Monday, as energy stocks took a hit after crude prices plummeted on supply glut worries and on some disappointing manufacturing activity data from China.

Investors also digested a mixed batch of U.S. economic data, including reports showing an unexpected decrease in construction spending and an surprise increase in manufacturing activity.

In some positive economic news, manufacturing index in the U.S. rebounded in October, indicating an unexpected acceleration in the pace of growth in manufacturing activity, following the pullback seen in the previous month. However, construction spending in the U.S. unexpectedly decreased in September, largely reflecting a notable decline in spending on public construction.

Energy stocks were weak, tracking declining crude oil prices. Oil prices plunged on demand growth concerns with fears of a supply glut after after news reports that the OPEC output likely rose significantly in October.

Investors also weighed some encouraging manufacturing activity data from the U.K., Germany, and the eurozone.

The benchmark S&P/TSX Composite Index closed Monday at 14,537.62, down 75.70 points or 0.52 percent. The index scaled a intraday high of 14,637.56 and a low of 14,519.33.

On Friday, the index ended higher by 154.63 points or 1.07 percent at 14,613.32, after scaling a intraday high of 14,626.98 and a low of 14,507.55. For the week, the index gained 0.48 percent.

Crude oil plummeted to end lower on demand growth concerns with fears of a supply glut after after news reports said OPEC output rose significantly in October.

Reports said OPEC output likely rose to a 14-month high in October, with news that Saudi Arabia has cut oil prices for the U.S. Saudi Arabia, which announced a big discount for its customers in Asia and Africa last month, will announce its crude export prices for December this week.

The Energy Index plunged 2.39 percent, with U.S. crude oil futures for December delivery plummeting $1.76 or 2.2 percent to close at $78.78 a barrel on the Nymex Monday.

Among other energy stocks, Suncor Energy Inc. (SU.TO) shed 3.62 percent, Canadian Natural Resources Limited (CNQ.TO) down 2.67 percent, Encana Corp. (ECA.TO) fell 0.17 percent, Talisman Energy Inc. (TLM.TO) dropped 3.76 percent, and Cenovus Energy Inc. (CVE.TO) fell 2.05 percent.

Gold futures ended lower as the dollar continued to strengthen on some upbeat manufacturing activity data from the U.S. with factory production at a 10-year high. Some encouraging manufacturing activity data from Europe also weighed.

The Global Gold Index jumped 3.93 percent, with gold for December delivery shedding $1.80 or 0.2 percent to settle at $1,169.80 an ounce on the New York Mercantile Exchange Monday.

Goldcorp Inc. (G.TO) moved up 0.94 percent, while Kinross Gold Corp. (K.TO) jumped 4.56 percent.

Among other gold stocks, Barrick Gold Corp. (ABX.TO) gained 2.20 percent, Agnico Eagle Mines Limited (AEM.TO) added 2.48 percent, Yamana Gold Inc. (YRI.TO) gained 1.34 percent, Eldorado Gold Corp. (ELD.TO) dropped 0.16 percent, and IAMGOLD Corp. (IMG.TO) gained 1.40 percent.

The Capped Materials Index gained 0.62 percent due mainly to rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) shedding 2.13 percent.

The Healthcare Index gained 0.29 percent, with Catamaran Corp. (CCT.TO) adding 0.96 percent, Valeant Pharmaceuticals Inc. (VRX.TO) up 1.72 percent, and Extendicare Inc. (EXE.TO) advanced 1.87 percent.

The heavyweight Financial Index dropped 0.19 percent, as Toronto-Dominion Bank (TD.TO) shed 0.11 percent, Canadian Imperial Bank of Commerce (CM.TO) edged up 0.04 percent, Bank of Montreal (BMO.TO) moved up 0.10 percent, and National Bank of Canada (NA.TO) ended flat at $52.68 per share.

Royal Bank of Canada (RY.TO) gained 0.16 percent, while Bank of Nova Scotia (BNS.TO) dropped 0.35 percent.

The Diversified Metals & Mining Index dropped 0.40 percent, as First Quantum Minerals Ltd. (FM.TO) dived 3.41 percent, while Lundin Mining Corp. (LUN.TO) edged up 0.80 percent. Teck Resources Limited (TCK.B.TO) added 0.17 percent.

The Capped Industrials Index shed 0.82 percent, with Air Canada (AC.B.TO) up 2.29 percent, Canadian Pacific Railway Limited (CP.TO) down 1.18 percent, and Bombardier Inc. (BBD.B.TO) up 1.62 percent.

The Information Technology Index dipped 0.05 percent, with smartphone maker BlackBerry Limited (BB.TO) down 1.77 percent, Constellation Software Inc. (CSU.TO) down 0.57 percent, and Avigilon Corporation (AVO.TO) was down 1.22 percent.

The Telecom Index moved up 0.43 percent with Rogers Communications Inc. (RCI.B.TO) gaining 1.06 percent, BCE Inc. (BCE.TO) up 0.26 percent, and TELUS Corp. (T.TO) up 0.10 percent.

The Consumer Staples Index dropped 1.56 percent, as Metro Inc. (MRU.TO) fell 1.72 percent, Alimentation Couche-Tard Inc. (ATD.B.TO) surrendered 0.65 percent, and Cott Corp. (BCB.TO) was up 3.22 percent.

The Consumer Discretionary Index gained 0.25 percent with Magna International Inc. (MG.TO) down 0.35 percent.

Touchstone Gold Limited (TCH.TO) has confirmed that it is in the late stages of negotiations and documentation regarding a possible investment in a technology company. The investment will be funded entirely from existing cash resources.

COGECO, Inc. (CGO.TO) was up 56.59 after reporting a fourth-quarter profit of $15.77 million or $0.94 per share, higher than $13.87 million or $0.82 per share in the prior-year quarter.

Duluth Metals Limited (DM.TO) jumped 485.17 percent and indicated the said that copper mining company Antofagasta Plc. (ANFGY.PK,ANTO.L) has agreed to acquire it through a wholly owned subsidiary, all of the outstanding common shares of Duluth Metals by way of a friendly take-over bid or a plan of arrangement at a price of C$0.45 per share in cash.

In economic news from the U.S., a report from the U.S. Commerce Department showed construction spending to have declined 0.4 percent to a seasonally adjusted annual rate of $950.9 billion in September from the revised August estimate of $955.2 billion. Economists expected construction spending to increase by about 0.6 percent.

Data from the Institute of Supply Management showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity, with the index climbing to 59.0 in October, up from 56.6 in September. Economists had expected the index to dip to 56.0.

Eurozone's manufacturing Purchasing Managers' Index rose to 50.6 in October, from a 14-month low of 50.3 in the previous month, data from Markit Economics showed. The flash score was 50.7.

In Asia, China's manufacturing sector continued to expand as expected in October, with HSBC manufacturing purchasing managers' index came in at 50.4. Manufacturing activity in U.K, Germany

Meanwhile, China's non-manufacturing business activity expanded at a slower rate in October, data from the National Bureau of Statistics showed Monday. The non-manufacturing business activity index decreased to 53.8 in October from 54 in September. This indicated a slower rate of growth.

From Europe, the British manufacturing sector growth accelerated at its fastest pace in three months in October on domestic demand, with the seasonally adjusted manufacturing Purchasing Managers' Index rising to a three month high of 53.2 in October from a seventeen-month low of 51.5 in September. Economists expected the score at 51.5 from September's originally estimated score of 51.6.

Germany's manufacturing sector returned to growth in October, with the Markit/BME Purchasing Managers' Index rising to 51.4 in October from a 15-month low of 49.9 in September. Nonetheless, the score was slightly below the flash estimate of 51.8.

Another report from Markit Economics showed the French manufacturing sector to have continued to contract in October, although the pace of decline was slower than initially estimated. The headline seasonally adjusted Purchasing Managers' Index fell to 48.5 in October from 48.8 in September. The flash score for October was at 47.3.

Markets await a slew of U.S. economic data this week. The European Central Bank is due to announce its monetary policy on Thursday, November 6.

Monthly non-farm payrolls data, weekly jobless claims report, ADP's private payrolls data for October, the results of Institute for Supply Management's manufacturing and non-manufacturing surveys for October, Markit's final U.S. manufacturing and non-manufacturing purchasing managers' indexes for October and a host of Fed speeches are scheduled for the week. The trade balance report and factory orders data are also due this week.