TSX Edges Up Amid Mixed Earnings - Canadian Commentary

(RTTNews) - After falling in the past two sessions, Canadian stocks are hovering in the green Wednesday morning amid steady commodities even as trader sentiment dented by growing speculation the Federal Reserve will begin tapering its asset purchase program next month.

Asian stocks fell broadly overnight after China's third plenum meeting failed to outline steps to curb state dominance of the economy, saying markets would play a "decisive" role in allocating resources. Weak data on Japanese core machine orders and renewed concerns that the U.S. Federal Reserve may start reducing its bond-buying program in the foreseeable future also kept investors on the sidelines. The European markets are trading lower as investors remained cautious amid a mixed bag of earnings news. Sentiment was also impacted by lingering fears over the Fed tapering.

The S&P/TSX Composite Index edged up 7.94 points or 0.06 percent to 13,333.98, after shedding just over 50 points in the past two sessions.

The price of crude oil moving higher Wednesday morning on value buying, after suffering significant losses in the previous session, with traders awaiting more cues on the demand situation. Yesterday, oil lost over 2 percent to settle at a fresh 6-month low after both the Organization of the Petroleum Exporting Countries and the International Energy Agency painted a brighter supply outlook for crude oil.

Crude for December added $1.20 to $94.24 a barrel.

In the oil patch, Suncor Energy (SU.TO) and Niko Resources (NKO.TO) were up around 2 percent each.

Oil and gas company TransGlobe Energy (TGL.TO) gained over 3 percent after reporting improved third-quarter net income of $16.3 million or $0.22 per share, compared with $11.7 million or $0.16 per share last year.

Meanwhile, gold stocks were trading firm on value buying after falling in the past few sessions. The price of gold was ticking higher Wednesday morning with the dollar trading mixed amid Fed tapering concerns. Gold for December moved up $3.30 to $1,274.50 an ounce.

Among gold plays, Royal Gold (RGL.TO) rose about 2 percent, while Detour Gold (DGC.TO) slipping nearly 2 percent.

Drugstore and general merchandise company Loblaw Companies (L.TO) dived about 6 percent after reporting lower third-quarter net earnings of C$154 million from C$217 million a year ago. Basic net earnings per share fell 28.6 percent to C$0.55. Adjusted net earnings slipped to C$220 million or C$0.78 per share from prior year's C$228 million or C$0.81 per share. Further, the company said it expects adjusted operating income and operating income to be flat, lower than the previously estimated mid-single digit growth.

Aviation-training and simulation products provider CAE Inc. (CAE.TO) shed over 2 percent despite reporting improved second-quarter net income at C$38.3 million or C$0.15 per share from C$35.6 million or C$0.14 per share last year.

Food retailer and distributor METRO Inc. (MRU.TO) lost over 5 percent after it said its fourth quarter net earnings were down 42.4 percent to C$83.6 million or C$0.88 per share compared to prior year's C$145.1 million or C$1.46 per share.

Retailer Rona Inc. (RON.TO) surrendered nearly 2 percent even after reporting improved third-quarter net income of C$30.0 million or C$0.25 per share compared to C$5.5 million or C$0.05 per share in the comparable quarter last year. However, adjusted net income declined to C$30.0 million or C$0.25 per share from C$33.5 million or C$0.28 per share in the previous year quarter. Analysts expected the company to report a loss of C$0.30 per share for the quarter.

In economic news, industrial production in the euro area decreased more-than-expected in September, after recording a modest growth in the previous month, latest data showed. Industrial production dropped a seasonally adjusted 0.5 percent month-on-month in September, reversing the previous month's 1 percent increase, statistical office Eurostat said. Economists had forecast a 0.3 percent contraction for September.

British unemployment claims declined more than expected by economists in October, while the jobless rate edged lower in the three-months to September, data from the Office for National Statistics showed. The claimant count for October fell by 41,700 from a month earlier to 1.31 million, the lowest level since January 2009. Economists had forecast a decline of 30,000. The claimant count rate fell to 3.9 percent from 4 percent in September.

Elsewhere, China's Communist Party agreed to offer bigger role for markets in the world's second largest economy as part of the sweeping reforms outlined by party leadership during the Third Plenum meeting that concluded in Beijing on Tuesday, with out providing further details.