Canadian Stocks Find Tougher Sledding Near Record Highs -- Canadian Commentary

(RTTNews) - Canadian stocks look headed for a lower start Friday with concerns about the situation in Iraq and weak European markets hurting sentiment.

However, relatively tame U.S. producer price inflation data that may open the door to low interest rates for another year, putting a floor under stocks.

Higher crude oil prices and concerns about supply disruptions due to mounting tension in Iraq could lift energy stocks.

Gold stocks are likely to turn in a mixed performance, tracking sluggish bullion prices.

On Thursday, the S&P/TSX Composite Index ended up 17.50 points or 0.12 percent at 14,909.63, not far off from an all-time high above 15,000 it had recorded in 2008.

In corporate news, Bank of Nova Scotia (BNS.TO) announced the close of a transaction to acquire 40% of Aurion Capital Management shares. Terms are not material to Scotiabank and were not disclosed.

Amaya Gaming Group Inc. (AYA.TO) announced that it has agreed to buy Rational Group, Owner of PokerStars and Full Tilt Poker, for $4.9 Billion in an all-cash transaction. The transaction is expected to be completed on or about September 30, 2014.

Pilot Gold Inc. (PLG.TO) has agreed to acquire Cadillac Mining Corp. (CQX.V), by way of a court-approved plan of arrangement. As per the terms of the Agreement, Cadillac shareholders will receive 0.12195 of a Pilot Gold share and 0.12195 of a Pilot Gold share purchase warrant for each common share of Cadillac held.

Crocotta Energy Inc. (TSX:CTA) has agreed to be acquired by Long Run Exploration Ltd. (TSX:LRE) in a transaction valued at about $357 million, including debt, the two companies said Thursday.

In commodities, crude oil has broken out of a narrow trading range this week, picking up more than 4 percent from last Friday.

Crude oil futures for July are up $0.50 or 0.47 percent at $107.03 a barrel, after rising to $107.67 a barrel, its highest since September 2008.

Concerns about possible supply disruptions due to escalating tension in Iraq and Wednesday's official inventory data from EIA that showed a drop in oil stockpiles are aiding crude's rise.

Meanwhile, natural gas for July is up $0.013 or 0.26 percent at $4.775 per million btu.

Gold futures for August are down $1.10 or 0.9 percent at $1,272.90 an ounce.

Silver for July is up $0.020 or 0.1 percent at $19.553 an ounce. Meanwhile, copper is up $0.13 or 0.41 percent at $3.028 per pound.

On the economic front, manufacturing sales in Canada declined unexpectedly by a seasonally adjusted -0.1 percent in May, from 0.3 percent in the previous month.

In economic news from the U.S., a report from the Labor Department showed producer prices for trade services showed an unexpected 0.2 percent decrease in May, after climbing 0.6 percent in April. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices edged down by 0.1 percent in May following a 0.5 percent increase in April. Economists had expected core prices to tick up by 0.1 percent.

Reuters and the University of Michigan are due to release the preliminary estimate of its consumer sentiment index for June at 9:55 am ET. The consumer sentiment index is expected to increase to 83 from 81.9 in May.