Canadian Stocks Are Falling On Commodity Weakness -- Canadian Commentary

(RTTNews) - The Canadian stock market is down in early trade Tuesday, extending its weakness from the previous day. Energy, gold and mining stocks are among the weakest performers this morning, due to weakness in commodity prices. U.S. crude oil for September are down and nearing Friday's 6-year low of $41.35.

The majority of the European markets are trading in the red Tuesday. Falling oil prices and the weak performance of the Chinese market are weighing on investor sentiment. China's Shanghai Composite Index plunged 6.2 percent on the day amid concerns about economic growth.

Markets in the United States are turning in a mixed performance. The Dow Jones is up slightly, while the S&P 500 and the Nasdaq are trading to the downside. A disappointing earnings report from retail giant Wal-Mart has investors concerned, especially after the company reduced its full year forecast.

Investors are also playing it cautious ahead of the release of the minutes from the most recent Federal Reserve meeting on Wednesday. Traders will be looking for any clues that may indicate when the Fed is planning to start hiking interest rates.

While the Commerce Department released a report on Tuesday showing that housing starts in the U.S. edged up to a nearly eight-year high in July, the report also showed a sharp drop in building permits.

The report said housing starts inched up by 0.2 percent to an annual rate of 1.206 million in July from the revised June estimate of 1.204 million. Economists had expected housing starts to climb to a rate of 1.180 million from the 1.174 million originally reported for the previous month.

Meanwhile, the report said building permits, an indicator of future housing demand, plunged 16.3 percent to an annual rate of 1.119 million in July after jumping to an eight-year high of 1.337 million in June. Building permits had been expected to pull back to a rate of 1.230 million from the 1.343 million originally reported for the previous month, reflecting an 8.4 percent decrease.

The benchmark S&P/TSX Composite Index is down 71.70 points or 0.50 percent at 14,179.83.

On Monday, the index closed down 26.35 points or 0.18 percent, at 14,251.33. The index scaled an intraday high of 14,267.24 and a low of 14,184.58.

The Diversified Metal and Mining Index is declining by 3.63 percent. First Quantum Minerals (FM.TO) is decreasing by 4.84 percent and HudBay Minerals (HBM.TO) is losing 5.05 percent. Capstone Mining (CS.TO) is falling by 6.67 percent and Teck Resources (TCK-A.TO) is down 2.59 percent. Sherritt International (S.TO) is lower by 2.68 percent and Lundin Mining (LUN.TO) is surrendering 2.49 percent.

The Gold Index is falling by 2.38 percent. Gold prices were little changed for a second session Tuesday morning, holding recent gains ahead of the release of the minutes from the July Federal Reserve meeting.

Goldcorp (G.TO) is weakening by 1.95 percent and Kinross Gold (K.TO) is decreasing by 1.12 percent. Yamana Gold (YRI.TO) is lower by 4.29 percent and B2Gold (BTO.TO) is falling by 3.46 percent. Royal Gold (RGL.TO) is losing 2.37 percent and IAMGOLD (IMG.TO) is weakening by 2.88 percent.

Integra Gold (ICG.V) is up 5.66 percent, after Eldorado Gold (ELD.TO) invested $14.6 million in the company. Eldorado Gold is now down 0.37 percent.

Barrick Gold (ABX.TO) is dropping by 4.08 percent, after it announced changes to its management structure.

The Capped Materials Index is also down 1.32 percent. Agnico Eagle Mines (AEM.TO) is falling by 0.93 percent and Franco-Nevada (FNV.TO) is losing 1.03 percent. Silver Wheaton (SLW.TO) is declining by 2.41 percent and Agrium (AGU.TO) is decreasing by 0.20 percent.

Potash Corp. of Saskatchewan (POT.TO) is down 0.43 percent. K+S AG won a major supply deal for its Legacy mine in Canada. This could help the Germany company fend off an aggressive takeover offer from Canada's Potash.

The Energy Index is decreasing by 0.25 percent. Crude oil prices continued to fall Tuesday morning amid evidence that global markets are severely oversupplied.

Crescent Point Energy (CPG.TO) is down 1.47 percent and Cenovus Energy (CVE.TO) is declining by 0.97 percent. Enbridge (ENB.TO) is falling by 1.00 percent and Suncor Energy (SU.TO) is losing 0.52 percent. Canadian Natural Resources (CNQ.TO) is also down 0.43 percent.

The heavyweight Financial Index is weakening by 0.54 percent. Royal Bank of Canada (RY.TO) is declining by 0.72 percent and Toronto-Dominion Bank (TD.TO) is down 0.19 percent. Bank of Nova Scotia (BNS.TO) is falling by 0.96 percent and Bank of Montreal (BMO.TO) is losing 0.64 percent. National Bank of Canada (NA.TO) is decreasing by 0.43 percent and Canadian Imperial Bank of Commerce (CM.TO) is surrendering 0.33 percent.

The Capped Industrials Index is down 0.41 percent. Canadian Pacific Railway (CP.TO) is falling by 0.47 percent and Canadian National Railway (CNR.TO) is losing 0.95 percent. AutoCanada (ACQ.TO) is declining by 2.12 percent.

The Capped Information Technology Index is losing 0.45 percent. Constellation Software (CSU.TO) is falling by 0.12 percent and Avigilon (AVO.TO) is lower by 1.87 percent. Sierra Wireless (SW.TO) is sinking by 2.86 percent and BlackBerry (BB.TO) is down 0.60 percent. Descartes Systems Group (DSG.TO) is also losing 0.63 percent.

The Capped Telecommunication Services Index is lower by 0.12 percent. TELUS (T.TO) is down 0.04 percent and BCE (BCE.TO) is lower by 0.15 percent.

The Capped Health Care Index is rising by 0.22 percent. Catamaran (CCT.TO) is climbing by 0.15 percent and Concordia Healthcare (CXR.TO) is adding 0.90 percent.

On the economic front, the number of persons in employment in Germany increased further in the second quarter, but at a slower pace, preliminary figures from Destatis showed Tuesday.

Total number of employed persons in the country rose 0.4 percent, or by 175,700 persons to 42.8 million in the second quarter from the corresponding period last year. This was lower than the 0.6 percent hike logged in the first quarter.

U.K. consumer prices rose unexpectedly in July on smaller discounts on clothing prices during summer sales, while core inflation reached a five-month high, the Office for National Statistics revealed Tuesday. Consumer prices advanced 0.1 percent in July from last year, while they were expected to remain flat as seen in June.

House price inflation in the United Kingdom accelerated marginally in June, after remaining stable in the previous month, figures from the Office for National Statistics showed Tuesday. Average house prices rose 5.7 percent year-over-year in June, following a 5.6 percent increase in May, revised down from the 5.7 percent hike estimated earlier.

In commodities, crude oil futures for September delivery are down $0.05 or 0.12 percent at $41.82 a barrel.

Natural gas for September is down 0.021 or 0.77 percent at $2.707 per million btu.

Gold futures for December are down $7.20 or 0.64 percent at $1,111.20 an ounce.

Silver for September is down $0.563 or 3.68 percent at $14.735 an ounce.