TSX Little Changed Despite Long-Awaited ECB Action -- Canadian Commentary

(RTTNews) - Canadian stocks are sluggish Thursday morning, with investors refraining from making significant moves despite a surprise rate cut announcement from the European Central Bank.

Economic data out of the U.S. are slightly below expectations, and though this could prompt the Federal Reserve to hold rates at current levels for an extended period, investors appear not too keen on lapping up stocks.

The European Central Bank today unexpectedly cut interest rates to near zero, reducing the refinancing rate to a record low of 0.5 percent from 0.15 percent. It cut the deposit rate to - 0.2 percent from - 0.10 percent and the marginal lending rate to 0.3 percent from 0.4 percent earlier.

In the post meeting press conference, ECB President Mario Draghi said the central bank will start purchasing asset-backed securities and covered bonds in October.

Data released by the U.S. Labor Department showed a slightly bigger than expected increase in jobless claims last week and the ADP's private sector employment data revealed that fewer than expected jobs were added in July.

Investors, besides digesting a slew of economic data, continue to closely watch the situation in Ukraine and the Middle East.

The benchmark S&P/TSX Composite Index is down 1.10 points or 0.01 percent at 15,656.53, moving in a tight band between 15,639.94 and 15,674.23.

On Wednesday, the index closed up 38.55 points or 0.25 percent at 15,657.63, after scaling a intraday high of 15,685.13 and a low of 15,519.08.

The Consumer Staples Index is up more than 1 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) moving up 2.2 percent, extending previous session's gains. Loblaw Companies Limited (L.TO), Saputo Inc. (SAP.TO), Metro Inc. (MRU.TO), George Weston Limited (WN.TO) and Cott Corporation (BCB,TO) are up 0.5 to 1 percent.

The Industrial Index is up 0.4 percent. Canadian National Railway Company (CNR.TO), Canadian Pacific Railway Limited (CP.TO), Bombardier Inc. (BBD.B.TO) CAE Inc. (CAE:TSX) and Progressive Waste Solutions Ltd. (BIN.TO) are advancing 0.4 to 1.4 percent.

Meanwhile, WestJet Airlines Ltd. (WJA.TO) is down 0.8 percent. The company reported that a 7.4 percent year-over-year growth in traffic in August 2014, on a 5.7% capacity increase. August load factor was 89.3%, an increase of 1.4 percentage points, compared with 87.9%, in the prior-year period.

Meanwhile, Air Canada (AC.B.TO) is up in positive territory, gaining over 1 percent.

Among the big six banks, National Bank of Canada (NA.TO) and Canadian Imperial Bank Of Commerce (CM.TO) are higher by over 0.5 percent, while the others are little changed from their previous closing prices.

Manulife Financial Corp (MFC.TO) is down nearly 2 percent, after it agreed to acquire the Canadian operations of Standard Life Plc for about C$4 billion in cash. Manulife expects the deal to lift its earnings per share by three cents over the next three years.

Gold stocks B2Gold Corp. (BTO.TO), Detour Gold Corporation (DGC.TO), Eldorado Gold Corporation (ELD.TO), Goldcorp Inc. (G.TO) and Agnico Eagle Mines Limited (AEM.TO) are declining 1 to 1.5 percent.

Energy stocks are turning in a mixed performance. Suncor Energy Inc. (SU.TO) is up more than 1 percent after it agreed to sell its Wilson Creek assets located near Rimbey, Alberta to Tamarack Acquisition Corp. for $168.5 million.

Technology stock Descartes Systems Group Inc. (DSG.TO) is up 0.5 percent after the company reported second-quarter net income of $3.61 million or $0.05 per share, up from $1.74 million or $0.03 per share in the same quarter last year.

In commodities, crude oil futures for October are down $1.05 or 1.10 percent at $94.49 a barrel,

Natural gas for October is down $0.035 or 0.91 percent at $3.812 per million btu.

Gold futures for December are down $0.60 or 0.05 percent at $1,270.90 an ounce.

Silver for December is down marginally at $19.188 an ounce. Meanwhile, copper is up $0.021 or 0.69 percent at $3.149 per pound.

In the currency market, the Canadian loonie is trading at 1.0839 to the U.S. dollar, up 0.45 percent from previous close. The euro has tumbled 1.3 percent against the greenback.

In economic news from the U.S., private sector employment rose by a less than expected 204,000 jobs in August following a downwardly revised increase of 212,000 jobs in July, data released by ADP showed. Economists had expected jobs to rise by about 220,000 in the month.

According to a report from the Labor Department, jobless claims rose by slightly more than expected to 302,000 in the week ended August 30th, from the previous week's unrevised level of 298,000.

Meanwhile, labor productivity in the U.S. increased by less than previously estimated in the second quarter, rising 2.3 percent. Earlier estimates had pegged productivity growth at 2.5 percent. The report also said unit labor costs edged down by a revised 0.1 percent in the second quarter versus the 0.6 percent increase originally reported.

A report from the Institute for Supply Management showed activity in the U.S. service sector to have unexpectedly expanded at an accelerated rate to 59.6 in August, from 58.7 in the preceding month.

The European Central Bank which cut its key rates today, cut its growth forecast for this year to 0.9 percent from 1 percent predicted in June. The outlook for 2015 was lowered to 1.6 percent from 1.7 percent.

The inflation outlook for 2014 was cut to 0.6 percent from 0.7 percent, while projections for 2015 and 2016 were retained at 1.1 percent and 1.4 percent, respectively.