TSX Settles Lower On Eurozone Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a fourth straight session on Wednesday, amid concerns about eurozone economy on the back of another disappointing economic report from Germany.

The drop was led mainly by financial and gold stocks, with consumer staples and materials stocks also closing lower, even as mining stocks made up for some of the losses.

Earlier today, data from Germany showed business confidence to have weakened for a fifth straight month in September, raising fears the largest economy in the eurozone is set for a slow recovery.

Some of the losses of the main index were pulled back on some upbeat economic from the U.S., as new home sales showed a substantial increase in August, with the annual rate of sales at its highest level in over six years.

The Canadian stocks were in sharp contrast to the U.S. and European markets, most of which ended higher.

The S&P/TSX Composite Index closed Wednesday at 15,120.54, down 5.13 points or 0.03 percent. The index scaled a intraday high of 15,164.680 and a low of 15,005.62.

On Tuesday, the index closed down 3.33 points or 0.02 percent at 15,125.67, having lost significant ground in the previous two sessions.

Crude oil soared to end higher after an official weekly crude oil inventory data from the U.S. Energy Information Administration showed stockpiles in the U.S. to have declined more than expected last week.

The EIA report showed U.S. crude oil inventories to have dropped 4.3 million barrels in the week ended September 19, while analysts anticipated an increase of 0.4 million barrels. U.S. crude oil inventories were at 358 million barrels, end last week.

The Energy Index added 0.20 percent, with U.S. crude oil futures for November delivery surging $1.24 or 1.35 percent to close at $92.80 a barrel Wednesday on the Nymex.

Among energy stocks, Cenovus Energy Inc. (CVE.TO) dropped 1.47 percent, Suncor Energy Inc. (SU.TO) fell 0.95 percent, Encana Corp. (ECA.TO) fell 0.59 percent, Talisman Energy Inc. (TLM.TO) surrendered 2.92 percent, and Canadian Natural Resources Limited (CNQ.TO) moved up 0.43 percent.

Enbridge Inc. (ENB.TO) declined 1.56 percent, while TransCanada Corp. (TRP.TO) dropped 0.70 percent.

The Financial Index shed 0.52 percent, with Toronto-Dominion Bank (TD.TO) down 0.79 percent, Canadian Imperial Bank of Commerce (CM.TO) dipping 0.46 percent, Royal Bank of Canada (RY.TO) down 0.36 percent, Bank of Nova Scotia (BNS.TO) declining 1.23 percent, and Bank of Montreal (BMO.TO) slipped 0.75 percent.

National Bank of Canada (NA.TO) gained 0.29 percent, while Manulife Financial Corp. (MFC.TO) shed 0.14 percent.

Gold futures ended lower tracking rising global equity markets with investors opting for the more riskier assets, even as the dollar trending higher on some upbeat economic news from the U.S. showing new home sales to have risen more than expected in August.

The Global Gold Index shed 1.29 percent, with gold for December delivery dropping $2.50 or 0.2 percent to settle at $1,219.50 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) lost 1.51 percent, Yamana Gold Inc. (YRI.TO) surrendered 2.75 percent, B2Gold Corp. (BTO.TO) dropped 0.43 percent, Eldorado Gold Corp. (ELD.TO) shed 0.89 percent, and Goldcorp Inc. (G.TO) dipped 0.27 percent.

The Capped Materials Index dipped 0.09 percent mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 0.49 percent.

The Diversified Metals & Mining Index jumped 2.46 percent, with First Quantum Minerals Ltd. (FM.TO) gaining 4.09 percent, Lundin Mining Corp. (LUN.TO) up 4.14 percent, and Teck Resources Limited (TCK.B.TO) edging up 0.14 percent. Sherritt International Corp. (S.TO) soared 9.70 percent.

The Capped Industrial Index gained 0.59 percent, with Bombardier Inc. (BBD.B.TO) up 2.59 percent with the plane maker reportedly in discussion with an unidentified airline which may well become the first operator of its CSeries jet.

The Information Technology Index added 0.52 percent, although BlackBerry Limited (BB.TO) dropped 0.77 percent after the launch of its new smartphone 'Passport' earlier this morning.

Among other tech stocks, Constellation Software Inc. (CSU.TO) gained 2.45 percent and Avigilon Corp. (AVO.TO) dipped 0.55 percent,

The Consumer Staples Index declined 0.75 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) dropping 1.07 percent and Metro Inc. (MRU.TO) adding 0.12 percent.

The Healthcare Index gained 1.72 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) jumped 7.02 percent, after indicating that it expects same store organic growth unadjusted for generics to exceed 15 percent in third quarter.

Valeant also said it has sent a letter to Allergan, Inc. (AGN), issuing an update on its expected third-quarter results and expressing continued willingness to negotiate a mutually agreeable transaction with Allergan.

The Telecom Index added 0.36 percent with Rogers Communications Inc. (RCI.B.TO) dropping 1.22 percent and BCE Inc. (BCE.TO) up 0.61 percent.

In economic news, a Commerce Department report showed new home sales in the U.S. increase substantially in August, with the annual rate of sales at its highest level in over six years. New home sales surged up 18.0 percent to a seasonally adjusted annual rate of 504,000 in August from the upwardly revised July rate of 427,000. Economists expected new home sales to climb to an annual rate of 430,000 from the 412,000 originally reported for the previous month.

From the eurozone, German business confidence weakened for the fifth straight month in September adding to signs that the largest euro area economy is set to see a slow recovery, a survey by the Ifo institute showed Wednesday. The Ifo business climate index dropped more-than-expected to 104.7 in September from 106.3 in August. This was the lowest score since April 2013, when the reading was 104.2. Economists had forecast the indicator to drop to 106.3 in August.

Meanwhile, the European Central Bank President Mario Draghi said Wednesday that euro area interest rates are likely to remain low for a long period of time and the bank is ready to use all possible tools to bring inflation back to the 2 percent target.

"Interest rates will stay at the present level for an extended period of time because they can't go much lower than that," he said.