Canadian Stocks Are Rising On Financial Strength -- Canadian Commentary

(RTTNews) - The Canadian stock market is up in early trade Tuesday, extending yesterday's gains. The majority of the Canadian sectors are positive this morning, with the exception of gold and healthcare. Early strength in energy has eroded, but the strong performance of financial stocks is providing a boost to the market.

Investors were pleasantly surprised by the Canadian GDP report this morning, which exceeded expectations. Global markets are also rising on hopes for further Chinese stimulus measures after China's manufacturing data came in weaker than expected.

Data from Statistics Canada showed that Canada real gross domestic product grew 0.2 percent in the fourth quarter, up from expectations for a flat reading. This follows a 0.6 percent increase in the third quarter.

On month, GDP grew 0.2 percent in December, marginally higher than the 0.1 percent gain seen by economists. In November, the economy expanded by 0.3 percent.

Markets in Europe are trading in the green Tuesday, despite some weak global economic data. The disappointing Chinese manufacturing data has investors feeling hopeful that further stimulus in China will be forthcoming.

Markets in the United States are also rising in early trade Tuesday. Investors cheered a pair of strong U.S. economic reports this morning. ISM manufacturing and construction spending both topped expectations.

While the Institute for Supply Management released a report on Tuesday showing a much bigger than expected increase by its index of manufacturing activity in the month of February, the index still pointed to the fifth straight month of contraction.

The ISM said its purchasing managers index rose to 49.5 in February from 48.2 in January, but a reading below 50 continues to indicate a contraction in manufacturing activity. Economists had expected the index to inch up to 48.5.

Construction spending in the U.S. increased by much more than anticipated in the month of January, according to a report released by the Commerce Department on Tuesday.

The report construction spending surged up by 1.5 percent to an annual rate of $1.141 trillion in January from the revised December estimate of $1.124 trillion. Spending had been expected to rise by 0.5 percent.

The benchmark S&P/TSX Composite Index is up 103.42 points or 0.80 percent at 12,963.77.

On Tuesday, the index closed up 62.56 points or 0.49 percent, at 12,860.35. The index scaled an intraday high of 12,912.60 and a low of 12,784.79.

The heavyweight Financial Index is rising 1.76 percent. Bank of Montreal (BMO.TO) is climbing 1.27 percent and Canadian Imperial Bank of Commerce (CM.TO) is gaining 0.90 percent. Toronto-Dominion Bank (TD.TO) is increasing 1.21 percent and National Bank of Canada (NA.TO) is advancing 1.98 percent. Royal Bank of Canada (RY.TO) is adding 1.77 percent.

Bank of Nova Scotia (BNS.TO) is surging by 3.91 percent, after it lifted its dividend as quarterly profits rose 5 percent. Results were slightly better than forecast.

Sun Life Financial (SLF.TO) is higher by 1.97 percent, after it completed its acquisition of the U.S. Employee Benefits business of Assurant Inc.

The Capped Information Technology Index is higher by 1.10 percent. Sierra Wireless (SW.TO) is advancing 1.23 percent and Constellation Software (CSU.TO) is climbing 2.41 percent. Avigilon (AVO.TO) is up 2.46 percent and Descartes Systems Group (DSG.TO) is adding 1.08 percent.

The Capped Industrials Index is gaining 1.06 percent. Canadian Pacific Railway (CP.TO) is increasing 2.05 percent and Canadian National Railway (CNR.TO) is adding 1.70 percent. Finning International (FTT.TO) is rising 1.85 percent and Bombardier (BBD-B.TO) is climbing 1.89 percent.

The Energy Index is rising 0.64 percent. Crude oil prices have turned slightly negative, after reversing early gains.

Canadian Oil Sands (COS.TO) is rising 0.32 percent and Canadian Natural Resources (CNQ.TO) is higher by 0.95 percent. Cenovus Energy (CVE.TO) is climbing 0.78 percent and Husky Energy (HSE.TO) is adding 4.14 percent. Suncor Energy (SU.TO) is up 1.18 percent and Enbridge (ENB.TO) is gaining 0.13 percent. Pacific Exploration & Production (PRE.TO) is surging 15.79 percent.

The Diversified Metal and Mining Index is climbing 0.53 percent. First Quantum Minerals (FM.TO) is advancing 1.42 percent and Teck Resources (TCK-B.TO) is gaining 0.77 percent. Capstone Mining (CS.TO) is rising 2.53 percent and Sherritt International (S.TO) is up 1.32 percent.

The Capped Telecommunication Services Index is up 0.28 percent. Manitoba Telecom Services (MBT.TO) is advancing 0.03 percent and BCE (BCE.TO) is rising 0.53 percent. Rogers Communication (RCI.A.TO) is increasing 0.22 percent and TELUS (T.TO) is adding 0.03 percent.

The Gold Index is down 3.92 percent. Gold prices have slipped back near the flat line, after back near February's yearly high.

Barrick Gold (ABX.TO) is falling 4.68 percent and IAMGOLD (IMG.TO) is declining 4.27 percent. Yamana Gold (YRI.TO) is down 2.09 percent and Kinross Gold (K.TO) is losing 1.52 percent. Goldcorp (G.TO) is weakening by 3.70 percent and Royal Gold (RGL.TO) is surrendering 4.56 percent. Eldorado Gold (ELD.TO) is lower by 2.22 percent and B2Gold (BTO.TO) is decreasing 1.99 percent.

The Capped Materials Index is also down 1.78 percent. Franco-Nevada (FNV.TO) is falling 4.58 percent and Agnico Eagle Mines (AEM.TO) is declining 4.81 percent. Silver Wheaton (SLW.TO) is lower by 3.80 percent.

The Capped Health Care Index is down 0.82 percent. Valeant Pharmaceuticals International (VRX.TO) is sinking 10.37 percent after it confirmed that it is under investigation by the U.S. Securities & Exchange Commission.

Nuvo Research (NRI.TO) is lower by 0.95 percent, after it completed its reorganization into two separate publicly traded companies.

Maple Leaf Foods (MFI.TO) is surging 8.35 percent. The company reported fourth quarter EPS from continuing operations of C$0.24, compared to the loss of C$0.16 a year ago.

On the economic front, Manufacturing activity in China continued to contract in February, as output declined at the steepest pace since last September on a sharp decrease in new work.

The Caixin manufacturing Purchasing Managers' Index fell unexpectedly to 48 in February from 48.4 in January, survey results from Markit showed Tuesday. This was the lowest reading in five months. Economists had forecast the index to have remained unchanged at 48.4.

The official manufacturing PMI slid to 49 in February from 49.4 in January. Likewise, the non-manufacturing PMI fell to 52.7 from 53.5 in the prior month. Although the sector logged an expansion, the pace was the weakest since late 2008.

Eurozone manufacturing growth eased to a one-year low in February, final data from Markit showed Tuesday. The final manufacturing Purchasing Managers' Index fell to 51.2 in February, a 12-month low, from 52.3 in January. It was slightly above the flash estimate of 51.

The euro area unemployment rate fell to the lowest level in more than four years in January despite sluggish economic growth and weak confidence. The jobless rate came in at 10.3 percent in January, down from 10.4 percent in December, data from Eurostat showed Tuesday. This was the lowest since August 2011. It was forecast to remain at 10.4 percent.

Germany's unemployment declined for the fifth consecutive month in February, the Federal Labor Agency reportedly said Tuesday. The number of people out of work decreased 10,000 from January as expected by economists.

Germany's unemployment rate declined marginally in January, provisional data from Destatis showed Tuesday. The jobless rate fell slightly to adjusted 4.3 percent in January from 4.4 percent in December. In the same period last year, the rate was 4.8 percent.

The U.K. manufacturing sector expanded at the slowest pace since early 2013 in February, data from Markit showed Tuesday. The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index fell more-than-expected to 50.8 in February from 52.9 in January. This was the lowest reading since April 2013. It was forecast to drop to 52.3 in February.

In commodities, crude oil futures for March delivery are down 0.28 or 0.83 percent at $33.47 a barrel.

Natural gas for March is up 0.01 or 0.58 percent at $1.721 per million btu.

Gold futures for April are up $0.50 or 0.04 percent at $1,233.90 an ounce.

Silver for March is down $0.128 or 0.86 percent at $14.79 an ounce.