TSX Ends A Tad Higher On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks ended slightly higher on Monday, after investors mulled over a Chinese move to cut interest rates to boost a slowing economy, not withstanding some positive global economic reports and the solid performance of the U.S. markets.

China's central bank announced its decision to lower its key rates on Saturday, slashing its one-year lending rate by 0.25 percentage points to 5.35 percent and lowering deposit rates by 0.25 percentage points to 2.5 percent. The move is expected to simulate the world's second-largest economy amid concerns of slowing economic growth.

European markets turned in a mixed performance at the start of the new trading week. The Eurozone is reportedly in the midst of negotiating a third bailout package for Greece, which will be between 30 billion euros and 50 billion euros. Meanwhile, the euro area jobless rate declined to the lowest since April 2012.

Markets in the United States gained ground despite some mixed economic data. The Nasdaq Composite index ended above the 5,000 mark in 15 years, the first time since March 27, 2000 and only one percentage point off its record level of 5,132.52 all-time peak.

U.S. consumer spending fell in January for a second consecutive month, due largely to a big drop in gasoline prices. However, personal income in January rose but came in just shy of expectations.

With labor issues at West Coast ports continuing to cause problems for exporters, the Institute for Supply Management's report on Monday showed U.S. manufacturing activity growth to have slipped to its lowest in more than a year.

Adding to concerns over the U.S. economy in the midst of winter lull for the second year running, U.S. construction spending unexpectedly dropped in January.

The benchmark S&P/TSX Composite Index closed Monday at 15,264.05, up 29.71 points or 0.20 percent. The index scaled an intraday high of 15,283.72 and a low of 15,212.26.

On Friday, the index closed lower by 6.82 points or 0.04 percent, at 15,234.34, on some soft economic data from the U.S., although the loss was limited with rising commodity prices.

The heavyweight Financial Index inched up 0.09 percent, as Bank of Montreal (BMO.TO) fell 0.40 percent, Bank of Nova Scotia (BNS.TO) added 0.18 percent, and Royal Bank of Canada (RY.TO) dipped 0.11 percent. National Bank of Canada (NA.TO) added 0.60 percent, while Canadian Imperial Bank of Commerce (CM.TO) fell 0.18 percent.

Toronto-Dominion Bank (TD.TO) surrendered 0.35 percent.

Crude oil dropped amid concerns over the health of the global economy even as the dollar weakened against a basket of some major currencies, with investors digesting a slew of economic reports from the U.S.

The Energy Index dropped 0.75 percent with U.S. crude oil futures for April delivery, shedding $0.17 or 0.3 percent to settle at $49.59 a barrel on the New York Mercantile Exchange Monday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) shed 0.54 percent, Canadian Oil Sands Limited (COS.TO) dropped 3.66 percent, and Penn West Petroleum Ltd. (PWT.TO) surrendered 4.38 percent.

Canadian Natural Resources Limited (CNQ.TO) gained 1.40 percent, while Crescent Point Energy Corp. (CPG.TO) fell 1.78 percent. Cenovus Energy Inc. (CVE.TO) dropped 0.79 percent, Encana Corp. (ECA.TO) slipped 2.09 percent.

Bonterra Energy (BNE.TO) fell 4.10 percent after declaring a February dividend of $0.15 per share.

Gold futures ended lower as U.S. equities climbed, with investors digesting a slew of economic reports from the U.S. and an interest rate cut in China.

The Gold Index dropped 2.18 percent, with gold for April delivery dropping $4.90 or 0.4 percent to settle at $1,208.20 an ounce on the New York Mercantile Exchange Monday.

Among gold stocks, Goldcorp (G.TO) dived 3.41 percent, Yamana Gold (YRI.TO) dropped 1.69 percent, Barrick Gold (ABX.TO) shed 1.60 percent, and Kinross Gold Corp (K.TO) fell 0.85 percent. IAMGOLD (IMG.TO) surrendered 2.30 percent, while Eldorado Gold (ELD.TO) plummeted 6.80 percent.

The Capped Materials Index fell 0.94 percent on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 0.47 percent and Agrium Inc. (AGU.TO) rising 1.16 percent.

The Diversified Metals & Mining Index dropped 0.93 percent, as First Quantum Minerals Ltd. (FM.TO) shed 0.57 percent, Lundin Mining Corp. (LUN.TO) dropped 0.92 percent, and Teck Resources (TCK-B.TO) slipped 0.70 percent.

Sherritt International Corp. (S.TO) gained 0.40 percent, HudBay Minerals (HBM.TO) surrendered 4.40 percent, and Finning International Inc. (FTT.TO) gathered 1.39 percent.

The Health Care Index jumped 2.56 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 3.52 percent, Extendicare Inc. (EXE.TO) gathered 2.74 percent, and Catamaran Corp. (CCT.TO) added 1.06 percent.

Oncolytics Biotech (ONC.TO) surged 48.89 percent, after the FDA granted Orphan Drug Designation for its lead product candidate, REOLYSIN, for the treatment of cancer of the fallopian tube.

The Capped Industrials Index added 0.30 percent, although Bombardier Inc. (BBD.B.TO) plunged 6.54 percent after closing a C$1.1 billion public offering of equity. Air Canada (AC.TO) dropped 0.49 percent. Canadian Pacific Railway Limited (CP.TO) added 1.23 percent, while Canadian National Railway Company (CNR.TO) gained 0.87 percent.

The Information Technology Index gained 1.87 percent, with BlackBerry Limited (BB.TO) gaining 2.44 percent, Sierra Wireless (SW.TO) adding 0.89 percent, Constellation Software (CSU.TO) moving up 2.85 percent, and Descartes Systems Group Inc. (DSG.TO) gathering 1.74 percent.

The Capped Telecommunication Index shed 0.29 percent, with BCE down 0.42 percent, TELUS Corp. (T.TO) dropping 1.01 percent, Manitoba Telecom Services Inc. (MBT.TO) gaining 0.12 percent, and Rogers Communications Inc. (RCI.B.TO) falling 0.23 percent.

Mitel Networks (MNW.TO) plunged 12.05 percent after announcing plans to acquire all of the outstanding shares of Mavenir Systems common stock in a cash and stock deal valued at about $560 million.

Saputo (SAP.TO) dropped 0.22 percent, after its Australian subsidiary, Warrnambool Cheese and Butter Factory Company Holdings Limited, revealed an agreement to acquire the everyday cheese business of Lion-Dairy & Drinks Pty Ltd. for C$134.4 million.

On the economic front, a report from the Institute for Supply Management showed U.S. manufacturing activity growth to have slipped to its lowest in more than a year, with labor issues at West Coast ports continuing to cause problems for exporters. The ISM's purchasing managers index fell to 52.9 in February from 53.5 in January, its worst reading in 13 months. Economists expected the index to drop to 52.8.

U.S. construction spending unexpectedly fell in January, adding to concerns over the economy in the midst of winter lull for the second year running. Spending on U.S. construction projects declined 1.1 percent in January to a seasonally adjusted annual rate $971.4 billion, the U.S. Commerce Department reported Monday. Economists expected a 0.3 percent increase, following December's upwardly revised 0.8 percent growth.

U.S. consumer spending dropped for a second consecutive month in January, due largely to a big drop in gasoline prices. The Commerce Department on Monday said consumer spending slipped 0.2 percent after falling 0.3 percent in December. Analysts expected a slightly smaller decline of 0.1 percent. However, consumer purchases adjusted for inflation rose 0.3 per cent in January following a 0.1 per cent drop the prior month.

Personal income rose 0.3 percent in the month, just shy of economist expectations for a 0.4 percent increase.

The People's Bank of China reduced its benchmark rate by a quarter point in a surprise move on Saturday. The central bank lowered its one-year loan rate to 5.35 percent from 5.6 percent and the one-year deposit rate to 2.50 percent from 2.75 percent, effective Sunday. The central bank raised the deposit-rate ceiling to 1.3 times from 1.2.

China's manufacturing sector contracted at a slower pace in February, official data showed Sunday. A National Bureau of Statistics report showed the manufacturing purchasing managers' index, or PMI, to have edged up to 49.9 in February from 49.8 in January.

The manufacturing sector in China expanded at a faster pace than originally reported in February, a HSBC survey said on Monday with a revised PMI reading of 50.7. That's up from 49.7 in January, and was even higher than last month's flash estimate of 50.1.

Eurozone manufacturing sector growth remained stable in February, final data from Markit Economics showed Monday. The final Purchasing Managers' Index came in at seasonally adjusted 51, unchanged from January's six-month high. The reading was below the flash score of 51.1.

The euro area jobless rate declined to the lowest since April 2012, data from Eurostat showed Monday. The unemployment rate dropped marginally to 11.2 percent in January from revised 11.3 percent in December. It was forecast to remain at December's originally estimated rate of 11.4 percent. This was the lowest rate recorded since April 2012.

Eurozone inflation remained negative for the third straight month in February due to falling energy prices. Nonetheless, the rate of decline in overall prices slowed more than expected, diluting fears of deepening deflation even before the European Central Bank practically starts bond purchase this month.

According to flash estimates from Eurostat, the harmonized index of consumer prices fell 0.3 percent in February from last year, slower than January's 0.6 percent decline and the expected decrease of 0.5 percent. Final data is due on March 17. The decline in December was the first fall since October 2009 and the 0.6 percent decrease seen in January was the biggest decline since July 2009.

Meanwhile, British manufacturing activity was the strongest in seven months during February with growth in output and new orders strengthening further, creating more jobs, results of a survey by Markit Economics showed Monday.