TSX Ends Sharply Lower On Soft Data, Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks dropped to end lower for a fourth straight session Wednesday, after some disappointing economic data from the U.S. with declining retail sales adding to concerns over the outlook for the global economy.

The main index continued to trend sharply lower on heavy selling in the mining and financial sector, with energy, industrials, and healthcare also slipping significantly.

The market, which is in a correction mode, has shed nearly 12 percent since hitting historic highs early August this year.

With crude oil futures plunging to their lowest level since June 2012, it was a dismal start for the market this morning. However, with oil recovering some lost ground subsequently, the market has come off its early lows.

In some soft economic news from the U.S., a Commerce Department report showed retail sales to have dropped more than anticipated in September, partly reflecting the recent drop in gasoline prices. Additionally, a Labor Department report showed an unexpected drop in U.S. producer prices in September, reflecting lower prices for food and energy.

Meanwhile, business activity in the New York manufacturing sector grew at a substantially slower rate in October, a Federal Reserve Bank of New York report showed Wednesday.

The benchmark S&P/TSX Composite Index closed Wednesday at 13,869.88, down 166.80 points or 1.19 percent. The index scaled a intraday high of 13,957.26 and a low of 13,677.34.

On Tuesday, the index closed down 190.68 points or 1.34 percent at 14,036.68, after declining to 13,977.73, the lowest since February 14, 2014.

Crude oil rallied but still ended lower ahead of the official inventory data from the U.S. Energy Information Administration and on some disappointing economic data from the U.S. amid rising concerns over the health of the global economy after a flood of gloomy economic forecast.

The Energy Index dropped 0.57 percent, with U.S. crude oil futures for November delivery shedding $0.06 to close at $81.78 a barrel on the Nymex Wednesday.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) shed 1.45 percent, Talisman Energy Inc. (TLM.TO) dropped 3.21 percent, and Bankers Petroleum Ltd. (BNK.TO) fell 1.20 percent.

Suncor Energy Inc. (SU.TO) gained 0.58 percent, Enbridge Inc. (ENB.TO) added 1.34 percent, and Encana Corp. (ECA.TO) moved up 1.16 percent.

The Financial Index plunged 2.50 percent, with Toronto-Dominion Bank (TD.TO) dropping 2.48 percent, Canadian Imperial Bank of Commerce (CM.TO) down 2.50 percent, Bank of Nova Scotia (BNS.TO) shed 2.11 percent, Bank of Montreal (BMO.TO) down 3.08 percent, and National Bank of Canada (NA.TO) down 1.83 percent.

Royal Bank of Canada (RY.TO) dropped 1.94 percent, while Manulife Financial Corporation (MFC.TO) dived 4.04 percent.

Gold futures ended higher as the dollar slipped on some disappointing economic data from the U.S. with investors continuing to seek the safe haven appeal of the precious metal.

The Global Gold Index slipped 0.09 percent, with gold for December delivery gaining $10.50 or 0.9 percent to settle at $1,244.80 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) dropped 1.04 percent, Yamana Gold Inc. (YRI.TO) up 0.15 percent, Eldorado Gold Corp. (ELD.TO) moved up 1.90 percent, and Goldcorp Inc. (G.TO) down 0.75 percent.

The Capped Materials Index dropped 0.68 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) surrendering 1.47 percent.

The Diversified Metals & Mining Index plummeted 3.44 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 4.09 percent, Lundin Mining Corp. (LUN.TO) down 3.74 percent, and Teck Resources Limited (TCK.B.TO) down 1.92 percent.

The Capped Industrials Index fell 1.03 percent, with Bombardier Inc. (BBD.B.TO) dropping 2.50 percent, Canadian Pacific Railway Limited (CP.TO) down 1.19 percent and Canadian National Railway (CNR.TO) down 0.35 percent.

The Information Technology Index shed 0.61 percent, with smartphone maker BlackBerry Limited (BB.TO) gaining 1.99 percent.

The Healthcare Index dived 2.57 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 0.98 percent, Catamaran Corp. (CCT.TO) down 1.85 percent, and Extendicare Inc. (EXE.TO) plunging 4.73 percent.

The Telecom Index lost 0.77 percent with Rogers Communications Inc. (RCI.B.TO) down 0.10 percent, BCE Inc. (BCE.TO) down 1.28 percent, and TELUS Corp. (T.TO) down 0.89 percent.

Sears Canada (SCC.TO) gained 0.58 percent after naming Ronald Boire as its Chief Executive Officer, replacing outgoing CEO Douglas Campbell. Ronald Boire is moving from Sears Holdings Corp., where he served as chief merchandising officer and president of the Sears and Kmart Formats.

CGI Group Inc. (GIB.A.TO) slipped 0.52 percent after signing $69 million six-year contract, with an option of renewal for two more years, to upgrade the information and communications technology system used in public schools in Oslo, Norway.

On the economic front, data from the U.S. Commerce Department showed retail sales to have dropped by a more than expected 0.3 percent in September.

Meanwhile, a report from the Labor Department showed producer prices in the U.S. to have unexpectedly dropped 0.1 percent in September, after coming in unchanged in August.

The New York Fed said its headline general business conditions index tumbled to 6.2 in October from 27.5 in September. While a positive reading indicates continued growth in the sector, economists had expected the index to show a much more modest decrease to 20.5.

A Commerce Department report on Wednesday showed business inventories in the U.S. to have increased less than expected in August, with business sales also pulling back. Business inventories edged up by 0.2 percent in August after climbing 0.4 percent in July. Economists expected inventories to increase 0.4 percent.

In economic news from the eurozone, a leading German economic indicator dropped 1 percent month-over-month in August, following the 0.5 percent decline in July, raising further concerns about the largest economy in the zone.

Elsewhere, British jobless rate dropped to its lowest since late 2008 and unemployment declined below 2 million as robust economic growth created more jobs during June to August, data from the Office for National Statistics showed Wednesday. The ILO jobless rate dropped to 6 percent during June to August, the lowest since late 2008 and dropped from the 6.5 percent seen in the March to May period. Economists had forecast a rate of 6.1 percent.

Chinese consumer prices slowed slightly more than expected in September, data from the National Bureau of Statistics showed Wednesday. Consumer prices grew 1.6 percent year-over-year in September following the 2 percent rise in August. Economists had expected inflation to slow to 1.7 percent.