TSX Ends Lower On Ukraine Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower Thursday, on escalating tensions in eastern Ukraine after a Malaysian Airlines jet crashed close to the Russian border amid allegations it may have been shot down either by pro-Russian rebels or the Russian military.

Nonetheless, the loss was limited after some upbeat results from Canadian Pacific Railway and some fairly encouraging U.S. economic data, overcoming a disappointing report on U.S. housing starts and worries about the impact of fresh sanctions imposed on Russia by the U.S. and European Union.

On Wednesday, the U.S. government imposed tougher sanctions on some major Russian banks and energy firms including major oil producer Rosneft, condemning Russia for their continued support to separatists in Ukraine.

Amid worries over the impact of new sanctions imposed on Russia by the U.S. and European Union, fresh tensions surfaced in Ukraine after a Malaysian Airlines passenger jet crashed in the rebel-dominated area of eastern Ukraine, close to the border with Russia. About 300 people are feared dead in the crash.

Meanwhile, some news reports suggest the aircraft may have been shot down at a height of about 33,000 feet with a surface-to-air missile. The region is predominantly controlled by pro-Russian separatist rebels fighting the Ukrainian government. However, the State Department said it could not currently confirm the cause of the Malaysian Airlines plane crash.

The S&P/TSX Composite Index closed Thursday at 15,203.51, down 22.83 points or 0.15 percent. The index scaled an intraday high of 15,269.39 and a low of 15,186.14.

On Wednesday, the index ended up 145.02 points or 0.96 percent at 15,226.34, a new closing high, as investors reacted positively to Bank of Canada's interest rate decision and an upbeat Chinese GDP data.

Crude oil soared higher amid escalating tensions in Ukraine after a Malaysian Airlines plane crashed with allegations it may have been shot down either by pro-Russian rebels or the Russian military. Prices also rode on increased demand prospects after some upbeat Chinese GDP data, with the official crude stockpiles dropping significantly more than expected last week.

The Energy Index dropped 1.19 percent, although U.S. crude oil futures for August delivery, the most actively traded contract, soared $1.99 or 2.0 percent to close at $103.19 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Ltd. (CNQ.TO) dropped 1.43 percent, Talisman Energy Inc. (TLM.TO) shed 2.14 percent, Suncor Energy Inc.(SU.TO) dropped 0.98 percent, Cenovus Energy Inc. (CVE.TO) fell 1.57 percent, Encana Corp. (ECA.TO) surrendered 2.92 percent, and Pacific Rubiales Energy Corp. (PRE.TO) gained 3.20 percent.

The Financial Index dropped 0.23 percent with Toronto-Dominion Bank down 0.23 percent, National Bank of Canada (NA.TO) up 0.09 percent, Bank of Nova Scotia (BNS.TO) down 0.45 percent, Royal Bank of Canada (RY.TO) gained 0.10 percent, Bank of Montreal (BMO.TO) added 0.21 percent, and Canadian Imperial Bank Of Commerce (CM.TO) slipped 0.11 percent.

The Capped Healthcare Index fell 0.24 percent with Catamaran Corp. (CCT.TO) up 0.91 percent. Valeant Pharmaceuticals International, Inc. (VRX.TO) slipped 0.03 percent, after announcing that its subsidiary, Bausch + Lomb has received 510(k) clearance from the U.S. Food and Drug Administration for the VICTUS Femtosecond Laser Platform for laser-assisted lens fragmentation during cataract surgery.

Gold futures ended higher with investors seeking the safe haven of the precious metal tracking weakness in global equity markets and over the Malaysian Airlines plane crash in eastern Ukraine, near the border with Russia.

Global Gold Index jumped 2.46 percent, with gold futures for August delivery gaining $17.10 or 1.3 percent to close at $1,316.90 an ounce Thursday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) gained 2.38 percent, Kinross Gold Corp. (K.TO) added 0.89 percent, Eldorado Gold Corp. (ELD.TO) up 3.96 percent, and Goldcorp Inc. (G.TO) was up 2.85 percent. Barrick Gold Corp. (ABX.TO) added 1.76 percent.

The Capped Materials Index gained 1.37 percent on gold mining stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) edging up 0.21 percent.

The Diversified Metals & Mining Index shed 0.97 percent, with Lundin Mining Corp. (LUN.TO) down 1.28 percent, Teck Resources Limited (TCK.B.TO) down 1.16 percent, and First Quantum Minerals Ltd. (FM.TO) down 0.79 percent.

The Information Technology Index lost 0.59 percent with BlackBerry Limited (BB.TO) dropping 2.61 percent, following a sharp plunge yesterday on IBM's planned deal with Apple. CGI Group Inc. (GIB.A.TO) dropped 0.65 percent, Constellation Software Inc. (CSU.TO) gaining 0.33 percent, and Avigilon Corp. (AVO.TO) down 0.34 percent.

The Capped Industrials Index moved up 0.45 percent, with Canadian Pacific Railway Ltd. (CP: TO) up 2.27 percent following a 47 percent increase in profit for the second quarter from last year. Bombardier Inc. (BBD.B.TO) dropped 0.80 percent, while Canadian National Railway Company (CNR.TO) gained 0.45 percent.

The Capped Telecommunications Index dipped 0.13 percent, with Rogers Communications Inc. (RCI.B.TO) down 0.38 percent, BCE Inc. (BCE.TO) down 0.12 percent, and Telus Corp. (T.TO) up 0.08 percent.

Colabor Group Inc. (GCL.TO) dropped 4.13 percent after reporting its second-quarter profit dropped to C$1.63 million or C$0.06 per basic share from C$2.39 million or C$0.09 per basic share a year ago.

West Fraser Timber Co. Ltd. (WFT.TO) shed 3 percent, after reporting a profit of $74 million or $0.87 per share in the June quarter, compared with $109 million or $1.27 per share in the corresponding quarter last year.

In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have declined by 3,000 to a seasonally adjusted 302,000 in the week ended July 12. Economists expected jobless claims to increase to 310,000 in the week.

Data from the Commerce Department showed new residential construction in the U.S. to have unexpectedly dropped in June, falling 9.3 percent, to a nine-month low of 893,000 from the revised May estimate of 985,000. Economists had expected housing starts to climb to 1.020 million in the month.

Building permits fell 4.2 percent to an annual rate of 963,000 in June from the revised May rate of 1.005 million.

Meanwhile, the Philadelphia Federal Reserve's Business Outlook Survey indicated a continued expansion in the region's manufacturing sector in July, with the index of activity in the sector jumping to 23.9 in July, its highest level in over three years.