TSX Ends Sharply Higher As Crude Prices Rise -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end sharply higher on Wednesday, as energy shares gained amid a sharp rise in crude oil prices offsetting a sell-off in the gold sector with plunging bullion prices.

Market sentiments were aided by some strong corporate earnings reports, positive European markets, and economic data showing a bigger than expected rise in U.S. private sector jobs.

Investors reacted positively to the results of U.S. midterm elections, which saw Republicans expand their majority in the House and retake the Senate.

In some upbeat economic news from the U.S., private sector employment increased more than anticipated in October, a report from payroll processor ADP showed Wednesday.

However, activity in the U.S. service sector grew at a slower rate in October, a report from the Institute for Supply Management showed Wednesday, with the index of activity in the sector falling more than anticipated. Meanwhile, a report from Markit Economics also showed China's services sector growth to have slowed in October.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,548.26, up 157.83 points or 1.10 percent. The index scaled a intraday high of 14,599.72 and a low of 14,441.21.

On Tuesday, the index closed down 147.19 points or 1.01 percent at 14,390.43, after scaling a intraday high of 14,14,522.84 and a low of 14,327.02.

Crude prices rebounded to end sharply higher after an official weekly oil report from the Energy Information Administration showed U.S. stockpiles to have risen less than expected last week.

A weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 0.5 million barrels in the week ended October 31, which was well below analysts expectation of an increase of 1.9 million barrels.

The Energy Index surged 3.95 percent, with U.S. crude oil futures for December delivery soaring $1.49 or 1.9 percent to close at $78.68 a barrel on the Nymex Wednesday.

Among other energy stocks, Suncor Energy Inc. (SU.TO) added 3.44 percent, Canadian Natural Resources Limited (CNQ.TO) gained 3.97 percent, Encana Corp. (ECA.TO) jumped 4.11 percent, and Cenovus Energy Inc. (CVE.TO) surged 5.14 percent.

Talisman Energy Inc. (TLM.TO) inched up 0.32 percent after reporting third-quarter net income of $425 million or $0.38 per share, compared to a net loss of $54 million or $0.08 per share, in the prior-year period.

Enbridge, Inc. (ENB.TO) slipped 0.38 percent after reporting a third quarter profit of C$0.41 per share, compared to C$0.34 per share in the same period last year.

Gold futures plummeted to end lower with the dollar continuing to strengthen against a select band of currencies on the diverging interest rate outlooks for the U.S. and Europe. The precious metal was also impacted after some mixed economic data from the U.S. with private sector jobs increasing more than expected in October while activity in the service sector grew at a slower pace.

The Global Gold Index plummeted 4.26 percent, with gold for December delivery plunging $22.00 or 1.9 percent to settle at $1,145.70 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) climbed 4.29 percent, Agnico Eagle Mines Limited (AEM.TO) surrendered 3.96 percent, Yamana Gold Inc. (YRI.TO) plunged 7.67 percent, Eldorado Gold Corp. (ELD.TO) fell 2.23 percent, and IAMGOLD Corp. (IMG.TO) plummeted 15.87 percent.

Goldcorp Inc. (G.TO) shed 3.24 percent, while Kinross Gold Corp. (K.TO) dropped 3.81 percent.

The Capped Materials Index dropped 1.57 percent due mainly to rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 1.27 percent.

The Healthcare Index fell 0.40 percent, with Catamaran Corp. (CCT.TO) up 0.85 percent, Valeant Pharmaceuticals Inc. (VRX.TO) down 1.55 percent, and Extendicare Inc. (EXE.TO) down 0.49 percent.

The heavyweight Financial Index gained 1.00 percent, as Toronto-Dominion Bank (TD.TO) gained 0.77 percent, Canadian Imperial Bank of Commerce (CM.TO) up 0.66 percent, Bank of Montreal (BMO.TO) up 0.88 percent, National Bank of Canada (NA.TO) gained 2.84 percent, and Royal Bank of Canada (RY.TO) gained 1.18 percent.

Bank of Nova Scotia (BNS.TO) moved up 0.22 percent.

The Diversified Metals & Mining Index moved up 0.12 percent, as First Quantum Minerals Ltd. (FM.TO) up 0.87 percent, while Lundin Mining Corp. (LUN.TO) up 1.39 percent. Teck Resources Limited (TCK.B.TO) added 2.98 percent.

The Capped Industrials Index added 1.15 percent, with Air Canada (AC.B.TO) down 1.44 percent, and Bombardier Inc. (BBD.B.TO) up 1.33 percent.

The Information Technology Index moved up 0.11 percent, with smartphone maker BlackBerry Limited (BB.TO) down 1.54 percent, Constellation Software Inc. (CSU.TO) down 3.45 percent, and Avigilon Corporation (AVO.TO) jumped 30.67 percent.

The Telecom Index added 0.52 percent with Rogers Communications Inc. (RCI.B.TO) gaining 0.51 percent, BCE Inc. (BCE.TO) up 0.06 percent, and TELUS Corp. (T.TO) climbed 1.10 percent.

The Consumer Discretionary Index is up 2.2 percent. Tim Hortons Inc. (THI.TO) is up 0.60 percent after reporting a decline in third-quarter net income to C$98.13 million, from C$113.86 million last year.

Magna International Inc. (MG.TO) jumped 5.76 percent, while Thomson Reuters Corporation (TRI.TO) gained 1.53 percent.

ATS Automation Tooling Systems Inc. (ATA.TO) shares are up 4.80 percent after the company reported a net profit of C$14.46 million or C$0.16 per share, up from C$12.89 million or C$0.14 per share last year.

Torstar Corp. (TS.B.TO) dipped 0.15 percent after reporting a third-quarter profit of $125.3 million or $1.56 a share, with the sale of its Harlequin romance book business boosting the bottomline.

Industrial Alliance Insurance and Financial Services Inc. (IAG.TO) shares fell 2.65 percent after reporting third-quarter net income of C$91.5 million or CS$0.91 per share, compared to C$105.8 million or C$1.07 per share in the year ago period.

In economic news, data released by payroll processor ADP showed U.S. private sector to have added more than anticipated 230,000 jobs in October, following an upwardly revised increase of 225,000 jobs in September. Economists expected an addition of about 220,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.

According to a report from the Institute for Supply Management, activity in the U.S. service sector grew at a slower rate in the month of October. The ISM's non-manufacturing index dropped to 57.1 in October from 58.6 in the preceding month.

In economic news from Asia, a report from Markit Economics showed China's services sector growth to have slowed in October, with the HSBC services business activity index falling to 52.9 in the month, from 53.5 in September.

Japan's service sector contracted for the fifth time since the sales tax was raised in April, a survey showed Wednesday. The headline services Purchasing Managers' Index dropped to 48.7 in October from 52.5 in September, marking the fastest fall since April. The decline in activity was partly the result of poor weather.

Eurozone retail sales declined more than expected in September on a notable decrease in non-food product sales, data revealed Wednesday. Retail sales fell 1.3 percent in September from last month reversing a 0.9 percent rise in August, Eurostat said. Sales were expected to fall moderately by 0.8 percent.

U.K. service sector growth slowed more than expected to a seventeen-month low in October, a survey report showed Wednesday. The Markit/CIPS services purchasing managers' index dropped to 56.2 in October from 58.7 in September, less than the 58.5 score expected by economists.