Canadian Stocks Are Falling On Weak Commodity Prices -- Canadian Commentary

(RTTNews) - The Canadian stock market is declining in early trade Thursday, following the gains of the previous three sessions. The majority of the Canadian sectors are trading in the red this morning. Gold, mining and energy stocks are among the weakest performers, due to falling commodity prices.

European markets are under pressure, after yesterday's highly anticipated meeting between Greek officials and its international creditors once again ended in a stalemate. Greek Prime Minister Alexis Tsipras did suggest that a deal may be close at hand and said Greece will make a 300 million euro repayment due to the IMF on Friday.

The Bank of England left its record low key interest rate and the size of the quantitative easing unchanged.

Markets in the United States are also trading in the red this morning. The recent sell-off in bonds is partly responsible for the weakness. The sharp pullback by bonds over the past 3 sessions has led to a subsequent jump in yields. Traders are also remaining on the sidelines ahead of Friday's employment report for May.

First-time claims for U.S. unemployment benefits saw a modest decrease in the week ended May 30th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims edged down to 276,000, a decrease of 8,000 from the previous week's revised level of 284,000.

Economists had expected jobless claims to slip to 278,000 from the 282,000 originally reported for the previous week.

Reflecting a much bigger than previously estimated drop in output, the Labor Department released a report on Thursday showing that U.S. labor productivity fell by even more than expected in the first quarter of 2015.

The report said productivity tumbled by a revised 3.1 percent in the first quarter compared to the previously reported 1.9 percent decrease.

Economists had expected a revised decrease of about 2.9 percent, which would still reflect a notable acceleration from the 2.1 percent drop seen in the fourth quarter.

Meanwhile, the report also said unit labor costs jumped by an upwardly revised 6.7 percent in the first quarter versus the previously reported 5.0 percent increase. Costs had been expected to surge up by a revised 6.0 percent.

The benchmark S&P/TSX Composite Index is down 106.04 points or 0.70 percent at 15,048.64.

On Wednesday, the index closed up 49.94 points or 0.33 percent, at 15,154.68. The index scaled an intraday high of 15,182.22 and a low of 15,104.04.

The Diversified Metal and Mining Index is falling by 1.78 percent. HudBay Mineral (HBM.TO) is lower by 0.43 percent and First Quantum Minerals (FM.TO) is declining by 1.95 percent. Lundin Mining (LUN.TO) is decreasing by 1.86 percent and Capstone Mining (CS.TO) is weakening by 1.57 percent. Sherritt International (S.TO) is down 3.08 percent and Teck Resources (TCK-A.TO) is surrendering 4.04 percent.

The Gold Index is falling by 0.87 percent. Gold prices are declining after the better than expected read on U.S. weekly jobless claims.

IAMGOLD (IMG.TO) is down 1.56 percent and Eldorado Gold (ELD.TO) is losing 0.70 percent. Goldcorp (G.TO) is decreasing by 1.13 percent and Barrick Gold (ABX.TO) is lower by 2.14 percent. B2Gold (BTO.TO) is declining by 3.21 percent.

The Capped Materials Index is also down 1.31 percent. Franco-Nevada (FNV.TO) is losing 1.04 percent and Agnico Eagle Mines (AEM.TO) is lower by 0.58 percent. Silver Wheaton (SLW.TO) is declining by 1.26 percent and Potash Corp. of Saskatchewan (POT.TO) is falling by 1.84 percent. Agrium (AGU.TO) is also lower by 1.57 percent.

The Energy Index is decreasing by 1.50 percent. Crude oil prices were losing ground Thursday morning, ahead of tomorrow's crucial OPEC meeting in Vienna. The cartel is expected to maintain robust production, hoping to damage non-OPEC competitors with low oil prices that are more acceptable to rich OPEC nations.

Crescent Point Energy (CPG.TO) is lower by 1.53 percent and Canadian Natural Resources (CNQ.TO) is down 1.37 percent. Suncor Energy (SU.TO) is falling by 0.58 percent and Cenovus Energy (CVE.TO) is losing 1.65 percent. Encana (ECA.TO) is sinking by 3.40 percent and Canadian Oil Sands (COS.TO) is decreasing by 3.76 percent.

The heavyweight Financial Index is lower by 0.53 percent. Toronto-Dominion Bank (TD.TO) is falling by 0.69 percent and Royal Bank of Canada (RY.TO) is losing 0.52 percent. Canadian Imperial Bank of Commerce (CM.TO) is lower by 1.08 percent and Bank of Montreal (BMO.TO) is falling by 1.01 percent. Bank of Nova Scotia (BNS.TO) is dipping by 0.51 percent and National Bank of Canada (NA.TO) is declining by 1.23 percent.

Canadian Western Bank (CWB.TO) is rising by 0.80 percent. The company reported second quarter EPS of C$0.67, compared to C$0.63 last year. The company also increased its quarterly dividend by 5 percent.

The Capped Industrials Index is falling by 0.32 percent. Air Canada (AC.TO) is lower by 0.55 percent and AutoCanada (ACQ.TO) is decreasing by 1.91 percent. Finning International (FTT.TO) is sinking by 3.21 percent.

Bombardier (BBD-A.TO) is losing 1.52 percent. The company was awarded a contract to manufacture and maintain up to 156 FLEXITY Vienna trams for the Vienna transport authority.

The Capped Information Technology Index is advancing by 0.36 percent. BlackBerry (BB.TO) is gaining 0.99 percent and Constellation Software (CSU.TO) is up 2.07 percent.

Andrew Peller (ADW-A.TO) is increasing by 2.00 percent, after the company's Board announced a 7.1 percent dividend increase. The company also reported an 11 percent increase in fourth quarter adjusted earnings.

On the economic front, Canada's Ivey PMI increased to 62.3 in May, from 58.2 in April. Economists had expected the index to fall to 55.5 for the month.

German construction sector activity slowed in May, reaching the lowest in four month as civil engineering activity declined, survey data from Markit Economics showed Thursday. The seasonally adjusted purchasing managers' index, or PMI, for the construction sector, declined to 50.8 in May from 51.0 in the previous month.

French unemployment rate decreased unexpectedly in the first quarter, though slightly, data from the statistical office Insee showed Thursday. The jobless rate, measured according to International Labour Organisation, or ILO, standards, edged down to 10.3 percent in the three months ended March from 10.4 percent in the fourth quarter. Economists had expected the rate to remain stable at 10.4 percent.

U.K. house prices dropped for the first time in three months in May, data from Lloyds Banking Group's Halifax division showed Thursday. House prices edged down unexpectedly by 0.1 percent month-on-month in May, reversing April's 1.6 percent increase. This was the first fall since February. Prices were forecast to grow 0.2 percent from April.

In commodities, crude oil futures for July delivery are down $1.22 or 2.05 percent at $58.42 a barrel.

Natural gas for July is down 0.019 or 0.72 at $2.615 per million btu.

Gold futures for August are down $10.20 or 0.86 percent at $1,174.70 an ounce.

Silver for July is down $0.28 or 1.70 percent at $16.20 an ounce.