TSX Ends Sharply Higher As Oil Prices Soar -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end higher on Thursday, driven by by energy stocks as crude oil prices surged and the Federal Reserve minutes yesterday indicating only a few policy makers wanted to consider a June rate hike.

Markets in Europe turned in a mixed performance Thursday. The weaker than expected eurozone private sector PMI report and the disappointing consumer confidence report weighed on investor sentiment.

Markets in the United States posted modest gains, with some better than expected earnings reports from retailers helping overshadow some weaker than expected U.S. economic data. The S&P 500 ended the session at a new record closing high, while the Nasdaq closed just shy of a new high.

In some disappointing economic data from the U.S., a Labor Department report on Thursday showed a bigger than expected increase in initial jobless claims in the week ended May 16, although the four-week moving average of claims fell to a new fifteen-year low.

The National Association of Realtors' report showed an unexpected decrease in existing home sales in the U.S. in April, with lagging supply relative to demand putting upward pressure on home prices.

The Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey showed regional manufacturing activity in May to have increased at a slower rate.

Meanwhile, flash data from Markit showed the eurozone economy lost growth momentum for a second successive month in May, while eurozone consumer confidence deteriorated for a second straight month in May and at a faster-than-expected pace.

The benchmark S&P/TSX Composite Index closed Thursday at 15,203.61, up 130.78 points or 0.87 percent. The index scaled an intraday high of 15,230.72 and a low of 15,092.25.

On Wednesday, the index closed down 48.19 points or 0.32 percent, at 15,072.83. The index scaled an intraday high of 15,187.02 and a low of 15,051.70.

The Diversified Metals & Mining Index fell 2.44 percent, as First Quantum Minerals Ltd. (FM.TO) plummeted 5.79 percent, Teck Resources Limited (TCK.B.TO) fell 1.51 percent, Lundin Mining Corp. (LUN.TO) dropped 1.79 percent, and Sherritt International Corp. (S.TO) gathered 1.57 percent.

Gold futures ended lower on Thursday, with investors continuing to mull over the Federal Reserve's minutes for its April meeting, amid a slew of disappointing economic data from the U.S. and Europe.

The Gold Index fell 0.69 percent, with gold for June delivery shedding $4.60 or 0.4 percent to settle at $1,204.10 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) added 0.33 percent, Goldcorp Inc. (G.TO) shed 0.49 percent, and Yamana Gold Inc. (YRI.TO) moved up 0.21 percent.

B2Gold Corp. (BTO.TO) fell 1.83 percent. Eldorado Gold Corp. (ELD.TO) gained 0.51 percent, while IAMGOLD Corp. (IMG.TO) moved up 0.38 percent.

The Capped Materials Index dipped 0.14 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) gaining 1.39 percent and Agrium Inc. (AGU.TO) up 2.49 percent.

Agnico Eagle Mines Limited (AEM.TO) fell 0.25 percent, Franco-Nevada Corp. (FNV.TO) shed 2.14 percent, and Silver Wheaton Corp. (SLW.TO) inching up 0.08 percent.

U.S. crude oil ended sharply higher for a second straight session on Thursday, as the dollar weakened against a select band of currencies amid signs the Federal Reserve will hold interest rates at zero for the time being. Crude prices were also impacted after official data from the Energy Information Administration yesterday showed crude stockpiles in the U.S. to have declined more than expected last week.

The Energy Index jumped 2.24 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, surging $1.74 or 3 percent, to settle at $60.72 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Suncor Energy Inc. (SU.TO) added 1.21 percent, while Crescent Point Energy Corp. (CPG.TO) jumped 5.79 percent. Cenovus Energy Inc. (CVE.TO) gained 1.07 percent, and Canadian Natural Resources Limited (CNQ.TO) moved up 2.37 percent.

Canadian Oil Sands Limited (COS.TO) gathered 2.94 percent, while Legacy Oil + Gas (LEG.TO) jumped 11.15 percent.

Pacific Rubiales Energy Corp. (PRE.TO) climbed 1.62 percent, after agreeing to be acquired by ALFA, S.A.B. de C.V. and Harbour Energy for C$6.50 per share in cash.

The heavyweight Financial Index gained 0.70 percent, as Bank of Nova Scotia (BNS.TO) moved up 0.84 percent, Toronto-Dominion Bank (TD.TO) advanced 0.45 percent, and Royal Bank of Canada (RY.TO) gathered 0.97 percent. Canadian Imperial Bank of Commerce (CM.TO) gained 1.22 percent.

National Bank of Canada (NA.TO) added 1.46 percent, while Bank of Montreal (BMO.TO) moved up 1.00 percent.

The Capped Health Care Index added 0.45 percent as Valeant Pharmaceuticals International Inc. (VRX.TO) gained 2.39 percent, Concordia Healthcare Corp. (CXR.TO) slipped 0.89 percent, and Catamaran Corp. (CCT.TO) edged up 0.01 percent.

The Capped Industrials Index added 0.79 percent, as Finning International Inc. (FTT.TO) dropped 0.32 percent, Air Canada (AC.TO) gathered 1.77 percent. Canadian Pacific Railway Limited (CP.TO) gained 1.84 percent, and Canadian National Railway (CNR.TO) moved up 1.02 percent.

Bombardier Inc. (BBD-A.TO) fell 1.17 percent.

The Information Technology Index plunged 2.07 percent, as Descartes Systems Group Inc. (DSG.TO) dropped 0.96 percent, Constellation Software Inc. (CSU.TO) dropped 1.17 percent and Sierra Wireless, Inc. (SW.TO) dropped 1.27 percent.

BlackBerry Inc. (BB.TO) gained 1.70 percent.

The Capped Telecommunication Index added 0.75 percent, as Rogers Communications Inc. (RCI.B.TO) gained 1.43 percent, TELUS Corp. (T.TO) adding 1.21 percent, and BCE Inc. (BCE.TO) moved up 0.26 percent.

Shopify Inc. (SH.TO) ending flat at $31.25 a share on its first day of trading.

On the economic front, a Labor Department report on Thursday showed a bigger than expected increase in initial jobless claims in the week ended May 16, although the four-week moving average of claims dropped to a new fifteen-year low. Initial jobless claims climbed to 274,000, an increase of 10,000 from the previous week's unrevised level of 264,000. Economists expected jobless claims to increase to about 270,000.

The National Association of Realtors Thursday revealed an unexpected decrease in existing home sales in the U.S. in April, with lagging supply relative to demand putting upward pressure on home prices. NAR said existing home sales fell 3.3 percent to an annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Economists expected existing home sales at 5.24 million from the 5.19 million originally reported for the previous month.

Firms responding to the Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey revealed that regional manufacturing activity unexpectedly increased at a slower rate in May.

A report released by the Philly Fed on Thursday showed its diffusion index of current activity to have dipped to 6.7 in May from 7.5 in April. While a positive reading indicates continued growth in regional manufacturing activity, economists had expected the index to inch up to 8.0.

Suggesting the paltry economic growth in the first quarter may be temporary, a Conference Board report on Thursday showed its index of leading U.S. economic indicators rose much more than anticipated in April. The Conference Board's said its leading economic index advanced 0.7 percent in April after climbing by an upwardly revised 0.4 percent in March. Economists expected the index to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

On the economic front, the manufacturing sector in China remained in contraction in May, albeit at a slower pace, the latest survey from HSBC revealed on Thursday with a two-month high PMI score of 49.1. That was shy of expectations for a score of 49.3, although it was up from 48.9 in April. It also remained beneath the boom-or-bust line of 50 that separates expansion from contraction.

Eurozone consumer confidence deteriorated for a second straight month in May and at a faster-than-expected pace, preliminary estimates from the European Commission showed Thursday. The flash consumer confidence index dropped to -5.5. from -4.6 in April. Economists had forecast a score of -4.8.

The euro area current account surplus declined for the second consecutive month in March, with the drop more than the expectations of economists, due to a decrease in the surplus on goods trade and lower primary income, data published by the European Central Bank showed Thursday.

The current account surplus dropped to a seasonally adjusted EUR 18.6 billion from EUR 27.3 billion in February. Economists expected a bigger surplus of 26 billion euros.

The Eurozone economy lost growth momentum for a second successive month in May, flash data from Markit showed Thursday. The composite Purchasing Managers' Index dropped to 53.4 in May from 53.9 in April. The reading was expected to remain unchanged at 53.9.

Germany's private sector grew at the slowest pace in five months in May, flash survey data from Markit revealed Thursday. The flash composite output index fell to 52.8 in May, a 5-month low, from 54.1 in April. Despite signaling an expansion, the rate of growth was the weakest in 2015 so far.

The French private sector expanded at a moderate pace in May, flash survey data from Markit showed Thursday. The flash composite output index rose to 51 in May from 50.6 in April. The private sector output grew for the fourth consecutive month in May.

U.K. retail sales recovered at a faster-than-expected pace on clothing demand in April, providing a notable support to economic growth at the start of second quarter. The volume of retail sales including auto fuel expanded 1.2 percent month-on-month reversing a 0.7 percent fall in March, the Office for National Statistics reported Thursday. This was the fastest growth since November and exceeded a 0.4 percent rise forecast by economists.