TSX Ends Lower On Some Soft U.S. Data -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Wednesday, amid some tepid economic data from the U.S. with initial claims for unemployment benefits rising more than expected even as pending homes sales in October declined unexpectedly.

Energy stocks came under pressure as crude oil prices fell after the official weekly inventory data showed U.S. stockpiles to have increased more than expected last week and ahead of the forthcoming OPEC meet on Thursday.

In some soft economic news from the U.S., first-time claims for unemployment benefits unexpectedly increased in the week ended November 22, while a Thomson Reuters and the University of Michigan report showed consumer sentiment to have improved less than previously estimated in November.

A report from MNI Indicators on Wednesday showed Chicago-area business activity to have risen at a notably slower rate in November, partly due to a significant slowdown in the pace of growth in new orders. Meanwhile, pending home sales in the U.S. unexpectedly dropped in October but remained at a healthy level, a National Association of Realtors report showed Wednesday.

Separately, a Commerce Department report showed personal income in the U.S. rose less than expected in October, with the increase in personal spending also falling short of expectations.

Durable goods orders unexpectedly rebounded in October after reporting an unexpected drop in new orders for U.S. manufactured durable goods in the previous month. However, core capital-goods orders dropped 1.3 percent for a second straight month.

The benchmark S&P/TSX Composite Index closed Wednesday at 15,038.41, down 35.24 points or 0.23 percent. The index scaled a intraday high of 15,060.38 and a low of 15,003.86.

On Tuesday, the index ended higher at 15,072.82, up 57.41 points or 0.38 percent, on some upbeat economic data from the U.S. showing gross domestic product to have increased more than previously estimated in the third quarter.

Crude oil ended lower after a report from the Energy Information Administration showed crude stockpiles in the U.S. to have increased more than expected last week and with investors focused on the upcoming crucial OPEC meet tomorrow in Vienna.

U.S. Energy Information Administration's weekly oil report showed crude oil inventories to have risen 1.9 million barrels in the week ended November 21, while analysts expected a 0.5 million barrels increase. The EIA report showed U.S. crude oil inventories at 383.0 million barrels, end last week. Gasoline stocks rose 1.8 million barrels last week, while analysts anticipated a gain of 1.5 million barrels.

The Energy Index dived 2.29 percent, with U.S. crude oil futures for January delivery dipping $0.40 to close at $73.69 a barrel on the Nymex Wednesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) fell 1.41 percent, Talisman Energy Inc. (TLM.TO) dropped 1.06 percent, Canadian Oil Sands Limited (COS.TO) dipped 3.74 percent, Cenovus Energy Inc. (CVE.TO) surrendered 2.81 percent, Encana Corp. (ECA:TSX) shed 2.00 percent, and Pacific Rubiales Energy Corp. (PRE.TO) fell 1.42 percent.

Canadian Natural Resources Limited (CNQ.TO) fell 1.50 percent, while Enbridge, Inc. (ENB.TO) added 1.31 percent.

Gold futures ended ended a tad lower notwithstanding a weak dollar, due largely to some soft economic data from the U.S. with initial claims for unemployment benefits rising more than expected even as new homes sales in October increased modestly.

The Global Gold Index shed 2.10 percent, with gold for February delivery dipping $0.30 to settle at $1,197.05 an ounce on the New York Mercantile Exchange Wednesday.

In the gold space, Kinross Gold Corp. (K.TO) dropped 1.15 percent, Goldcorp Inc. (G.TO) fell 2.73 percent, Barrick Gold Corp. (ABX.TO) shed 2.02 percent, and Yamana Gold Inc. (YRI.TO) dived 2.89 percent.

Detour Gold Corp. (DGC.TO) surrendered 2.17 percent, while Eldorado Gold Corp. (ELD.TO) lost 2.90 percent.

The Capped Materials Index dropped 1.59 percent, mostly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 0.49 percent.

The Healthcare Index added 0.58 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) fell 0.11 percent, Catamaran Corp. (CCT.TO) added 1.56 percent and Extendicare Inc. (EXE.TO) gained 0.29 percent.

The heavyweight Financial Index gained 0.43 percent, as Royal Bank of Canada (RY.TO) gained 0.57 percent, Toronto-Dominion Bank (TD.TO) added 0.51 percent, Canadian Imperial Bank of Commerce (CM.TO) gained 0.75 percent, Bank of Montreal (BMO.TO) added 0.43 percent, and National Bank of Canada (NA.TO) ended flat at $53.22 a share.

Bank of Nova Scotia (BNS.TO) gained 0.10 percent after announcing that Grupo Financiero Santander México, S.A.B. de C.V. (BSMX) has agreed to acquire a consumer loan portfolio worth about 4.10 billion pesos or $300 million, from the bank's Mexican unit.

The Diversified Metals & Mining Index dived 1.41 percent, as First Quantum Minerals Ltd. (FM.TO) dipped 0.65 percent, Teck Resources Limited (TCK.B.TO) fell 1.72 percent, Lundin Mining Corp. (LUN.TO) dropped 2.23 percent. Sherritt International Corp. (S.TO) shed 0.36 percent.

The Capped Industrials Index moved up 0.10 percent, with Bombardier Inc. (BBD.B.TO) down 0.45 percent and Air Canada (AC.TO) shedding 0.39 percent. Canadian National Railway (CNR.TO) dropped 0.49 percent, while SNC-Lavalin Group Inc. (SNC.TO) shed 0.74 percent.

The Information Technology Index added 0.72 percent with BlackBerry Ltd. (BB.TO) gaining 1.29 percent and.

The Telecom Index gained 0.57 percent, with Rogers Communications Inc. (RCI.B.TO) up 0.44 percent, TELUS Corp. (T.TO) up 0.87 percent, and BCE Inc. (BCE.TO) adding 0.49 percent.

The Consumer Discretionary Index gained 0.27 percent, with Tim Hortons Inc. (THI.TO) up 0.34 percent.

The Consumer Staples Index added 0.39 percent, with Metro Inc. (MRU.TO) edging up 0.03 percent and Saputo Inc. (SAP.TO) gaining 1.07 percent.

Canadian Pacific Railway Limited (CP.TO) added 0.65 percent after indicating it would buy up to 1.21 million of its common shares following private agreements to be entered into between CP and a third-party seller. The price for these shares will be at a discount to the prevailing market price of CP common shares on the Toronto Stock Exchange at the time of purchase.

On the economic front, a report from the U.S. Labor Department on Wednesday showed initial jobless claims to have unexpectedly risen to 313,000 in the week ended November 22nd, up 21,000 from the previous week's revised level of 292,000.

Meanwhile, a report from the U.S. Commerce Department showed durable goods orders to have unexpectedly climbed by 0.4 percent in October following a revised 0.9 percent decline in the preceding month.

New home sales in the U.S. saw a modest increase in October, a Commerce Department report showed Wednesday. New home sales rose 0.7 percent to a seasonally adjusted annual rate of 458,000 in October from the revised September rate of 455,000. Economists expected new home sales to climb 0.6 percent to a rate of 470,000 from the 467,000 originally reported for the previous month.

Pending home sales in the U.S. unexpectedly decreased in October but remained at a healthy level, the National Association of Realtors said in a report on Wednesday. The pending home sales index tumbled 1.1 percent to 104.1 in October from an upwardly-revised 105.3 in September. Economists expected pending home sales to increase by about 0.6 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Consumer sentiment in the U.S. improved less than previously estimated in November, a report from Thomson Reuters and the University of Michigan showed Wednesday. The consumer sentiment index for November was downwardly revised to 88.8 from the mid-month reading of 89.4. Economists expected the index to be upwardly revised to 90.0.

Personal income in the U.S. rose less than expected in October, with the increase in personal spending also falling short of economist estimates, a report from the Commerce Department said Wednesday. The report said personal income edged up 0.2 percent in October, matching the increase seen in September. Economists expected income to increase by about 0.4 percent.

MNI Indicators' Chicago business barometer dropped to 60.8 in November from a one-year high of 66.2 in October. Economists expected a more modest decreased reading of 63.2.

From Europe, the U.K. economy registered robust growth as estimated in the third quarter with strength in consumer spending offsetting weakness in exports and business investment. U.K. gross domestic product grew 0.7 percent sequentially in the third quarter, unrevised from the previous estimate published on October 24, second estimates from the Office for National Statistics showed Wednesday. This follows a 0.9 percent expansion in the second quarter. Year-on-year, GDP increased 3 percent, in line with preliminary estimate.