TSX Ends Lower On Concerns Over Greece -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a second straight session Wednesday, amid continued concerns over developments in Greece, with Athens still not able to reach an agreement with its international creditors on its economic reforms, even as the Fed Reserve indicated a gradual pace in interest rates.

The Federal Reserve kept its benchmark interest rate unchanged near zero, without offering any explicit guidance to indicate as to when rates will be raised, despite a modest improvement in the economic outlook. Nevertheless, the Fed sees improving U.S. economic growth and is likely to effect one or two rate hikes during the year.

In its highly anticipated monetary policy announcement, the Fed left interest rates unchanged, as was widely expected, and reiterated that the outlook for rates will be data dependent.

European markets ended mostly in the red, with no progress on a resolution to Greece's financial problems. Greece's central bank in a report warned that Athens failure to reach an agreement with creditors could put the country on the 'painful' path of an exit from the euro and spark an uncontrollable crisis.

U.S. markets ended in positive territory after the monetary policy announcement by the Federal Reserve. The higher close on Wall Street came in reaction to some relatively dovish signals from the Federal Reserve, reinforcing the view that the eventual increase in interest rates will be gradual.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,732.93, down 20.12 points or 0.14 percent. The index scaled an intraday high of 14,825.13 and a low of 14,659.89.

On Tuesday, the index closed down 3.00 points or 0.02 percent, at 14,753.05. The index scaled an intraday high of 14,753.99 and a low of 14,683.38.

Crude oil futures ended lower, after a weekly oil report from the U.S. Energy Information Administration showed stocks at Cushing in Oklahoma rose more than expected, even as crude oil stockpiles dropped more than expected last week.

A weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories dropped 2.7 million barrels in the week ended June 12, while analysts expected stocks to decline 2.4 million barrels.

Stocks at Cushing, Oklahoma, the key delivery point for Nymex crude, rose 112,000 barrels last week, while it was estimated to drop 850,000 barrels.

The Energy Index inched up 0.06 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, shedding $0.05 to settle at $59.92 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) moved up 0.73 percent, while Crescent Point Energy Corp. (CPG.TO) gained 2.37 percent. Encana Corp. (ECA.TO) dropped 1.07 percent, and Enbridge Inc. (ENB.TO) fell 0.18 percent.

Gold futures ended lower as investors focused on the U.S. Federal Reserve' monetary policy statement, with anticipation of a potentially huge Fed announcement late in the day.

The Gold Index dropped 1.54 percent, with gold for August delivery shedding $4.90 or 0.4 percent to settle at $1,180.90 an ounce in electronic trade on the New York Mercantile Exchange Tuesday.

Among gold stocks, dropped 0.77 percent, Barrick Gold Corp. (ABX.TO) up 2.39 percent, and Kinross Gold Corp. (K.TO) jumped 4.58 percent. IAMGOLD Corp. (IMG.TO) gathered 2.86 percent, while Eldorado Gold Corp. (ELD.TO) added 1.38 percent.

The Capped Materials Index fell 0.97 percent, as Agrium Inc. (AGU.TO) dipped 1.01 percent, Agnico Eagle Mines Limited (AEM.TO) added 1.72 percent. Franco-Nevada Corp. (FNV.TO) inched up 0.15 percent, while Potash Corp. of Saskatchewan Inc. (POT.TO) slipped 0.40 percent.

The Diversified Metals & Mining Index added 0.08 percent, as First Quantum Minerals Ltd. (FM.TO) added 1.04 percent, Lundin Mining Corp. (LUN.TO) slipped 1.29 percent, and Teck Resources (TCK.B.TO) gained1.04 percent.

The heavyweight Financial Index fell 0.58 percent, as Royal Bank of Canada (RY.TO) dipped 0.60 percent, National Bank of Canada (NA.TO) fell 0.41 percent, and Bank of Montreal (BMO.TO) fell 0.77 percent.

Bank of Nova Scotia (BNS.TO) surrendered 0.84 percent, while Toronto-Dominion Bank (TD.TO) fell 0.83 percent. Canadian Imperial Bank of Commerce (CM.TO) fell 0.54 percent.

The Capped Health Care Index dropped 0.69 percent as Extendicare Inc. (EXE.TO) gained 0.71 percent, and Concordia Healthcare Corp. (CXR.TO) fell 0.84 percent.

The Capped Industrials Index dropped 0.10 percent, as Bombardier Inc. (BBD-A.TO) fell 2.04 percent and Finning International Inc. (FTT.TO) shed 2.35 percent.

The Information Technology Index slipped 0.33 percent, as Sierra Wireless, Inc. (SW.TO) dropped 1.36 percent and Descartes Systems Group Inc. (DSG.TO) fell 0.20 percent. BlackBerry Inc. (BB.TO) shed 0.09 percent.

The Capped Telecommunication Index surrendered 0.32 percent, as Rogers Communications Inc. (RCI.B.TO) gained 0.14 percent and BCE Inc. (BCE.TO) fell 0.53 percent.

On the economic front, a report from Statistics Canada this morning showed that Canadian wholesale sales increased by 1.9 percent in April. Economists had expected an increase of only 0.3 percent. The March result was also upwardly revised to a 1.0 percent gain, from the originally reported 0.8 percent increase.

On the economic front, eurozone construction output increased for a second straight month in April, although the rate of growth halved from the previous month, data from Eurostat showed Wednesday. Construction production in the euro area 19 countries rose 0.3 percent month-over-month in April, following 0.6 percent increase in March, revised from 0.8 percent.

U.K. unemployment held steady at its lowest level in nearly seven years during the three months to April, while pay growth was the strongest in four years, exceeding economists' forecast, figures from the Office for National Statistics showed Wednesday. The ILO jobless rate for the February to April period was 5.5 percent, down from 5.7 percent logged for the three months to January. It was also lower than the 6.6 percent recorded in the same period last year.

The unemployment rate was in line with economists' expectations and was the lowest since April-June 2008, when the figure was 5.4 percent. The number of unemployed declined by 43,000 from the previous three months to 1.81 million, the lowest since the June to August period of 2008.

Average earnings including bonuses grew 2.7 percent year-on-year during the three months to April. Economists had forecast 2.1 percent growth. The latest increase was the highest since June to August 2011, when pay grew 2.7 percent.

U.K. households were more downbeat about their finances in June, a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday. The index dropped to 43.8 in June from 45.5 in May. The reading was the lowest score seen so far this year.

Elsewhere, Japan posted a merchandise trade deficit of 215.974 billion yen in May, the Ministry of Finance said on Wednesday. That beat forecasts for a shortfall of 258.8 billion yen following the downwardly revised 55.8 billion yen deficit in April (originally -53.44 billion yen).

Meanwhile, the Bank of Greece in its annual report said, "The conclusion of a new agreement with our partners is of the utmost importance to fend off the immediate risks to the economy, reduce uncertainty and ensure a sustainable growth outlook for Greece."

"An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring," the central bank added.