Canadian Stocks Extend Losses After U.S. Data -- Canadian Commentary

(RTTNews) - Canadian stocks are lower Thursday morning, with investors reacting to a mixed batch of U.S. economic data, and largely refraining from making significant moves.

While the report from U.S. Labor Department showing a notable drop in jobless claims is aiding sentiment, the data revealing a contraction in U.S. GDP in the first quarter is weighing on the market.

The benchmark S&P/TSX Composite Index is down 45.40 points or 0.31 percent at 14,565.58, coming off a low of 14,529.09.

On Wednesday, the index ended down 47.06 points or 0.32 percent at 14,610.96.

Canadian Imperial Bank of Commerce or CIBC (CM.TO) shares are down more than 2 percent despite the bank reporting better than expected adjusted earnings of C$887 million or C$2.17 per share. However, second-quarter net income attributable to shareholders came in at C$317 million or C$0.73 per share, compared with C$860 million or C$2.09 per share for the second quarter, a year ago.

Bank of Nova Scotia (BNS.TO) is up 0.5 percent. The bank said Wednesday that it has agreed to sell a part of its minority stake in Canadian asset manager CI Financial Corp.(CIX.TO) in a secondary offering and raise gross proceeds of as much as C$2.62 billion, or $2.41 billion. CI Financial Corp. is also modestly higher.

Toronto-Dominion Bank (TD.TO) and Royal Bank of Canada (RY.TO), Bank of Montreal (BMO.TO) and National Bank of Canada (NA.TO) are down 0.8 to 1.2 percent.

Descartes Systems Group (DSG.TO) said that its first-quarter net income was $3.7 million, up 32% from $2.8 million in the same quarter last year. Earnings per share was $0.06, up 50% from $0.04 last year. The stock is down 2.4 percent.

Rio Alto Mining Ltd (RIO.TO) announced that it has agreed to buy 26.97 million common shares of Sulliden Gold Corporation Ltd. (SUE.TO), representing 8.6% of Sulliden's basic shares outstanding, from Agnico Eagle Mines Ltd (AEM.TO) for C$1.10 per share for about C$29.7 million in cash. Rio Alto Mining shares are down 1.2 percent. Agnico Eagle Mines is down nearly 1 percent, while Sulliden Gold Corporation is unchanged.

In the materials space, Turquoise Hill Resources Ltd. (TRQ.TO), Sherritt International Corporation (S.TO), Capstone Mining Corp. (CS.TO) and Nevsun Resources Ltd. (NSU.TO) are declining 1 to 2 percent.

Among gold stocks B2Gold Corp. (BTO.TO) is down more than 3 percent and IAMGold Corporation (IMG.TO) is lower by about 0.6 percent.

In commodities, crude oil futures for July are up $0.69 or 0.71 percent at $103.45 a barrel.

Natural gas for July is up $0.021 or 0.46 percent at $4.635 per million btu.

Gold futures for August are down $2.80 or 0.27 percent at $1,256.30 an ounce.

Silver for July is down $0.076 or 0.40 percent at $18.987 an ounce. Meanwhile, copper is down $0.028 or 0.89 percent at $3.145 per pound.

In the currency market, the Canadian loonie is trading at 1.0855 against the U.S. dollar, up 0.18 percent from previous close.

According to revised government figures, the U.S. economy contracted by 1% in the first quarter, registering the biggest decline in three years. Economists expected revised figures to show a contraction of about 0.6 percent.

A report from the U.S. Labor Department showed jobless claims to have declined to 300,000 in the week ended May 24, down 27,000 from the previous week. Economists had been expecting jobless claims to dip to 317,000 from the 326,000 originally reported for the previous week.

The data showed continuing claims to have declined by 17,000 to 2.63 million in the week.

Meanwhile, personal Consumption Expenditure in the U.S. was up 3.1 percent in the first quarter, up from 3.0 percent in the previous quarter.

According to the data released by the National Association of Realtors, pending home sales in U.S. rose for the second consecutive month in April, although the rise was by a less than expected 0.4 percent to 97.8. In March, pending home sales had jumped 3.4 percent.