Canadian Stocks Are Declining After Yesterday's Rally -- Canadian Commentary

(RTTNews) - The Canadian stock market is weakening in early trade Tuesday, following the strong rally during the previous session. The market is tracking global markets lower, following a number of weaker than expected global economic reports. The majority of the sectors are trading in the red this morning, led by energy, mining and financial stocks.

Markets in Europe have largely turned negative this morning, after what had been a mixed performance in early trade. Weak economic data is partly responsible for the decline after German investor sentiment came in below expectations and Eurozone employment growth slowed in the fourth quarter. The decline worsened following the U.S. housing start report.

Markets in the United States are under pressure after housing starts for February fell well short of expectations. Investors are also playing it cautious ahead of the 2-day Federal Reserve monetary policy meeting, which begins today. The Fed is predicted to remove the word "patient" from its monetary policy statement without any strong signal on the timing of an interest rate rise. Many economists foresee no rate hike before September as there are still signs of weakness in the world's largest economy.

New residential construction in the U.S. showed a substantial decrease in the month of February, according to a report released by the Commerce Department on Tuesday, with housing starts falling to their lowest level in over a year.

The report said housing starts plummeted by 17.0 percent to an annual rate of 897,000 in February from the revised January estimate of 1.081 million. Economists had been expecting housing starts to dip to 1.048 million from the 1.065 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits climbed 3.0 percent to an annual rate of 1.092 million in February from the revised January rate of 1.060 million. Building permits, an indicator of future housing demand, had been expected to inch up to 1.058 million from the 1.053 million originally reported for January.

The benchmark S&P/TSX Composite Index is down 99.46 points or 0.67 percent at 14,763.30.

On Monday, the index closed up 131.27 points or 0.89 percent, at 14,862.76. The index scaled an intraday high of 14,913.54 and a low of 14,719.27.

The Diversified Metal and Mining Index is decreasing by 1.37 percent. Lundin Mining (LUN.TO) is declining by 0.60 percent and HudBay Minerals (HBM.TO) is losing 1.03 percent. First Quantum Minerals (FM.TO) is falling by 1.74 percent and Finning International (FTT.TO) is down 0.95 percent. Sherritt International (S.TO) is weaker by 1.44 percent and Capstone Mining (CS.TO) is surrendering 0.89 percent.

The Capped Materials Index is also down 0.82 percent. Silver Wheaton (SLW.TO) is down 0.63 percent and Potash Corp. of Saskatchewan (POT.TO) is lower by 0.80 percent. Agrium (AGU.TO) is falling by 0.49 percent.

The Gold Index is up 0.07 percent. Gold prices edged slightly lower Tuesday as traders prepared for the most closely-watched Federal Reserve meeting in months. With a rate hike not far off and the dollar strengthening, U.S. gold has slipped to its lowest since last November.

Eldorado Gold (ELD.TO) is rising by 0.66 percent and Royal Gold (RGL.TO) is up 0.70 percent.

Barrick Gold (ABX.TO) is declining by 0.82 percent and Kinross Gold (K.TO) is down 2.34 percent. Goldcorp (G.TO) is declining by 1.57 percent and B2Gold (BTO.TO) is surrendering 0.53 percent.

The Energy Index is falling by 1.07 percent. Crude oil prices have plunged in the past six months, with the epic collapse brought on by a stronger dollar, burgeoning inventories and an unwillingness from major producers to trim output.

Meanwhile, sanctions may be lifted on Iranian oil if Tehran and the West can reach a deal on the Iran nuclear program, bringing even more oil into the market.

Crescent Point Energy (CPG.TO) is falling by 1.44 percent and Canadian Natural Resources (CNQ.TO) is lower by 1.83 percent. Encana (ECA.TO) is down 1.78 percent and Suncor Energy (SU.TO) is losing 1.83 percent.

Cenovus Energy (CVE.TO) is declining by 1.69 percent and Canadian Oil Sands (COS.TO) is down 0.68 percent. Pacific Rubiales Energy (PRE.TO) is decreasing by 2.23 percent and Legacy Oil + Gas (LEG.TO) falling by 2.44 percent.

The heavyweight Financial Index is falling by 1.15 percent. Toronto-Dominion Bank (TD.TO) is declining by 0.83 percent and Bank of Montreal (BMO.TO) is falling 1.60 percent. Bank of Nova Scotia (BNS.TO) is losing 1.58 percent and Canadian Imperial Bank Of Commerce (CM.TO) is down 1.28 percent. National Bank of Canada (NA.TO) is decreasing by 1.25 percent and Royal Bank of Canada (RY.TO) is lower by 1.26 percent.

First National Financial (FN.TO) is gaining 1.28 percent. The company announced its monthly dividend payment of $0.125 per common share for March.

The Capped Health Care Index is down 0.84 percent. Catamaran (CCT.TO) is declining by 1.46 percent and Extendicare (EXE.TO) is falling by 0.28 percent.

Valeant Pharmaceuticals International (VRX.TO) is losing 0.80 percent, after it priced its previously announced registered offering of common shares. The Company will issue 7,286,432 common shares at a price of $199.00 per share.

The Capped Industrials Index is down 0.49 percent. Canadian Pacific Railway (CP.TO) is dropping by 0.95 percent.

Canadian National Railway (CNR.TO) is losing 0.72 percent. The company announced that members of the Unifor union have ratified the clerical/intermodal, Savage Alberta Railway, excavator-operator and CNTL owner-operator collective agreements.

Bombardier (BBD-A.TO) is gaining 3.05 percent, after it and Fly Mojo Sdn Bhd have signed a Letter of Intent for the sale and purchase of 20 CS100 aircraft with options for an additional 20 CS100 aircraft.

The Capped Information Technology Index is lower by 0.69 percent. Constellation Software (CSU.TO) is decreasing by 1.18 percent.

The Capped Telecommunication Services Index is falling by 0.45 percent. TELUS (T.TO) is decreasing by 0.07 percent and BCE (BCE.TO) is down 0.50 percent. Manitoba Telecom Services (MBT.TO) is also lower by 0.42 percent.

AgJunction (AJX.TO) is sinking by 8.47 percent, after it agreed to acquire Novariant.

Alimentation Couche-Tard (ATD-A.TO) is rising by 1.11 percent, after the company reported third quarter adjusted earnings of $0.51 per share. The Company's Board also declared a quarterly dividend in Canadian dollar cents of 4.5 per share for the third quarter

On the economic front, Canadian manufacturing sales dropped by 1.7 percent in January, according to a report from Statistics Canada Tuesday morning. Economists had expected a decrease of 1.2 percent. The December sales data was also revised down to an increase of 1.6 percent, from the 1.7 percent gain that was initially reported.

Eurozone employment grew at a slower pace at the end of 2014, data published by Eurostat showed Tuesday. Employment rose 0.1 percent in the fourth quarter from a quarter ago, which slower than the 0.2 percent rise in the third quarter and 0.3 percent in the second quarter.

Eurozone consumer prices remained negative for the third month in February as initially estimated, final report from Eurostat showed Tuesday. The harmonized index of consumer prices fell 0.3 percent in February from last year, slower than January's 0.6 percent decline. The annual decrease came in line with the flash estimate published on March 2.

German investor sentiment strengthened for the fifth consecutive month in March to its highest level in a year, a closely watched survey revealed Tuesday. Nonetheless, the improvement was weaker than expected, suggesting that concerns over the Greek crisis impacted optimism.

The economic sentiment indicator climbed to 54.8 from 53 in February, survey data from the Centre for European Economic Research, or ZEW, showed Tuesday. It was the highest value of the index since February 2014. Economists had expected a higher score of 59.4.

The leading economic index in the UK, which measures the future economic activity, increased at the start of the year, figures from the Conference Board showed Monday. The Conference Board leading economic index rose 0.2 percent in January, after staying flat in the previous month. In November, the index had dropped 0.4 percent.

In commodities, crude oil futures for April delivery are down $0.89 or 2.03 percent at $42.99 a barrel.

Natural gas for April is up $0.101 or 3.72 percent at $2.817 per million btu.

Gold futures for April are up $1.70 or 0.15 percent at $1,154.90 an ounce.

Silver for May is up $0.003 or 0.02 percent at $15.62 an ounce.