TSX Ends Higher On Resource Stocks, Oil Prices -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end higher on Thursday, driven by gains in resource stocks and the financial sector with almost all sub-indices ending in positive territory, as crude oil rebounded to end sharply higher.

All sectors, with the exception of the gold and telecommunication sector, ended in the green, with the main index tracking rising U.S. equity markets.

Oil prices rebounded to end higher, following the sharp sell-off in the previous session. Oil prices fell by nearly 9 percent yesterday, on renewed concerns of oversupply. Supply glut concerns resurfaced after an official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have surged more than expected last week.

Markets in the United States ended in positive territory, despite several weaker than expected economic reports. U.S. labor productivity unexpectedly declined, while the trade deficit widened more than anticipated. Nonetheless, the rebound in weekly jobless claims was lesser than expected.

Investors now await the release of the U.S. jobs report for January Friday morning. Markets in Europe ended largely lower, due to renewed concerns over Greece. The European Central Bank suspended the waiver of collateral for loans to Greek banks. The news overshadowed a much stronger than expected German factory orders report.

The benchmark S&P/TSX Composite Index closed Wednesday at 15,124.92, up 129.27 points or 0.86 percent. The index scaled an intraday high of 15,172.32 and a low of 15,031.11.

On Wednesday, the index slipped 67.23 points or 0.45 percent, to close at 14,995.65. The index scaled an intraday high of 15,056.35 and a low of 14,939.17.

Crude oil jumped to settle sharply higher after a better than expected initial claims data for unemployment benefits in the U.S. and hopes that demand for oil would pick up with the European Commission's optimistic take on the eurozone economy.

Nevertheless, markets continue to remain oversupplied as demand continues to dwindle due to economic weakness in Europe and Asia. OPEC has already signaled its ease with oil at these levels, while non-OPEC producers are starting to feel the pinch. Layoffs in the oil and gas industry in the U.S. have skyrocketed in the past few months.

A weekly report from the U.S. Energy Information Administration on Wednesday showed crude oil inventories in the U.S. to have jumped 6.3 million barrels in the week ended January 30, while analysts expected an increase of 2.8 million barrels.

The Energy Index gained 2.03 percent with U.S. crude oil futures for March delivery, jumping $2.03 or 4.2 percent to settle at $50.48 percent a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) skyrocketed 20.40 percent, Legacy Oil + Gas Inc. (LEG.TO) jumped 12.97 percent, Athabasca Oil Corp. (ATH.TO) gained 4.48 percent, and Penn West Petroleum Ltd. (PWT.T)) surged 7.81 percent.

Canadian Oil Sands (COS.TO) dropped 3.87 percent, while Encana Corp. (ECA.TO) shed 1.44 percent.

Canadian Natural Resources Limited (CNQ.TO) added 3.34 percent, while Cenovus Energy Inc. (CVE.TO) gained 1.44 percent. Crescent Point Energy (CPG.TO) inched up 0.34 percent, and Imperial Oil (IMO.TO) gathered 2.50 percent.

Suncor Energy (SU.TO) gained 2.83 percent, after reporting fourth quarter operating earnings of C$0.27 per share compared to C$0.66 per share in the prior year. Analysts expected EPS of C$0.35.

MEG Energy Corp. (MEG.TO) added 2.61 percent after reporting a full year 2014 net loss of C$106 million, compared to the loss of C$166 million a year ago.

The Diversified Metals & Mining Index added 2.49 percent, as First Quantum Minerals Ltd. (FM.TO) gained 2.05 percent and Lundin Mining Corp. (LUN.TO) gathered 4.66 percent. Finning International Inc. (FTT.TO) moved up 1.52 percent, while Teck Resources Limited (TCK.B.TO) added 3.23 percent. HudBay Minerals (HBM.TO) gained 2.19 percent.

Gold futures ended lower after some mixed economic data from the U.S. with initial claims for unemployment benefits rising less than expected and trade deficit widening more than anticipated in December.

The Global Gold Index dipped 0.07 percent, with gold for April delivery shedding $1.80 or 0.1 percent to settle at $1,262.70 percent on the New York Mercantile Exchange Thursday.

Among other gold stocks, Yamana Gold Inc. (YRI.TO) added 1.27 percent, Kinross Gold Corp. (K.TO) gained 1.66 percent, and Barrick Gold Corp .(ABX.TO) inched up 0.12 percent.

Goldcorp Inc. (G.TO) added 0.40 percent, IAMGOLD (IMG.TO) shed 2.08 percent, and Franco-Nevada Corp. (FNV.TO) dropped 1.33 percent. Eldorado Gold Corp. (ELD.TO) gained 3.31 percent.

The Capped Materials Index added 0.47 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) gaining 0.72 percent and Agrium Inc. (AGU.TO) shedding 0.33 percent.

The heavyweight Financial Index gained 1.41 percent, as Bank of Montreal (BMO.TO) added 2.15 percent, National Bank of Canada (NA.TO) advanced 1.12 percent, Royal Bank of Canada (RY.TO) moved up 1.70 percent, and Toronto-Dominion Bank (TD.TO) climbed 2.11 percent.

Bank of Nova Scotia (BNS.TO) added 1.78 percent, while Canadian Imperial Bank of Commerce (CM.TO) gathered 1.69 percent.

The Capped Industrials Index advanced 0.87 percent, as Air Canada (AC.TO) jumped 5.81 percent, Canadian National Railway Company (CNR.TO) added 0.67 percent, and Canadian Pacific Railway Limited (CP.TO) moved up 0.63 percent.

The Information Technology Index added 1.11 percent, as BlackBerry Limited (BB.TO) gained 0.56 percent, Constellation Software (CSU.TO) gained 1.25 percent, and Descartes Systems Group Inc. (DSG.TO) up 0.47 percent. Sierra Wireless, Inc. (SW.TO) dived 6.16 percent.

The Healthcare Index gained 0.24 percent, even as Valeant Pharmaceuticals International, Inc. (VRX.TO) shed 0.75 percent, Catamaran Corp. (CCT.TO) added 0.90 percent, and Extendicare Inc. (EXE.TO) added 0.73 percent.

The Capped Telecommunication Index dropped 1.31percent, with Canada's biggest telecom company BCE adding 0.24 percent after reporting fourth-quarter adjusted earnings of $0.72, which surpassed analysts' expectations of $0.70 per share.

Manitoba Telecom Services Inc. (MBT.TO) plunged 6.28 percent, after reporting fourth quarter earnings and revenues that fell short of expectations.

Rogers Communications Inc. (RCI.B.TO) dipped 0.13 percent, and TELUS Corp. (T.TO) up 0.23 percent.

On the economic front, the Canadian trade deficit widened to C$649 million in December, from a revised C$335 million in November, according to a report from Statistics Canada Thursday morning. Economists had expected a trade deficit of C$1.10 billion. This was the third consecutive month that Canada logged a trade deficit.

In other economic news, On the economic front, a report from the Labor Department showed first-time claims for U.S. unemployment benefits rebounded less than anticipated in the week ended January 31, after having reported a notable decrease in claims in the previous week. Initial jobless claims rose to 278,000, an increase of 11,000 from the previous week's revised level of 267,000. Economists expected jobless claims to climb to 290,000 from the 265,000 originally reported for the previous week.

Labor productivity in the U.S. showed an unexpected decrease in the fourth quarter of 2014, a report from the Labor Department revealed Thursday. Productivity tumbled by 1.8 percent in the fourth quarter following an upwardly revised 3.7 percent jump in the third quarter. Economists expected productivity to edge up by 0.2 percent compared to the 2.3 percent increase reported in the previous quarter.

Meanwhile, the Labor Department said unit labor costs surged up by 2.7 percent in the fourth quarter after falling by a revised 2.3 percent in the third quarter. Labor costs had been expected to climb by 1.2 percent compared to the 1.0 percent drop that had been reported in the previous quarter.

With imports jumping and exports falling, a Commerce Department report on Thursday showed U.S. trade deficit to have unexpectedly widened in December. The trade deficit widened to $46.6 billion in December from a revised $39.8 billion in November, reflecting the widest deficit since November of 2012. Economists expected the deficit to narrow to $37.9 billion from the $39.0 billion originally reported for the previous month.

German factory orders rebounded at the fastest pace in five months, underpinned by both domestic and foreign demand in December. Factory orders grew a seasonally and working-day adjusted 4.2 percent month-on-month in December, reversing a revised 2.4 percent fall in November, data from Destatis showed Thursday. The latest order growth was the strongest since July, when demand rose 4.8 percent. The growth also exceeded a 1.5 percent rise expected by economists.

Germany's construction sector contracted in January, though at a fractional rate , results of a survey from Markit Economics showed Thursday. The purchasing managers' index for the construction sector dropped to 49.5 in January from 50.5 in the previous month, indicating a marginal contraction.

U.K house prices increased for the third straight month in January, survey data from Lloyds Banking Group's Halifax division showed Thursday. House prices climbed 2.0 percent month-on-month in January, faster than the 1.1 percent rise in the previous month. Economists expected house prices to remain flat during the month.