TSX Ends Higher On U.S. Budget, Debt Deal - Canadian Commentary

(RTTNews) - Canadian stocks pared losses late in the session to end higher Wednesday, tracking rising U.S. equity markets after lawmakers in U.S. reached an agreement to end the more than two-week federal government shutdown and raise the U.S. debt ceiling limit to avert a sovereign debt default.

Senate leaders on Wednesday announced an agreement to finally resolve the fiscal crisis in Washington, just a day before the deadline to raise the debt limit.

The agreement came on the sixteenth day of the government shutdown, which will enable funding the government through January 15 and extend the debt limit through February 7. The plan also require lawmakers to work toward a broader budget agreement by December 13 and include stricter income verification for subsidies under Obamacare..

As a result of the ongoing crisis in Washington, with just a day to the debt ceiling deadline, Fitch Ratings on Tuesday placed the U.S. Treasury on Ratings Watch Negative, considered a first step to a downgrade. Nonetheless, investors largely ignored a report from the National Association of Home Builders which showed an unexpected drop in U.S. homebuilder confidence.

The S&P/TSX Composite Index closed Wednesday at 12,957.21, up 25.75 points or 0.20 percent. The index touched an intraday high of 12,957.21 and a low of 12,912.22.

The Diversified Metals & Mining Index dropped 0.49 percent, with First Quantum Minerals Ltd. (FM.TO) surrendering 1.43 percent, Teck Resources Limited (TCK.B.TO) edged up 0.07 percent, and Lundin Mining Corp. (LUN.TO) slipped 0.44 percent.

The Capped Materials Index shed 1.22 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) edging down 0.12 percent.

Gold futures ended higher Wednesday, after the Senate announced an agreement to end the federal government shutdown and raise the U.S. debt ceiling limit to avert a default.

The Global Gold Index dropped 2.04 percent, although gold futures for December delivery gained $9.10 or 0.7 percent to close at $1,282.30 an ounce Wednesday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) shed 2.24 percent, while Barrick Gold Corp. (ABX.TO) slipped 1.25 percent. Goldcorp Inc. (G.TO) dropped 2.24 percent, while Kinross Gold Corp. (K.TO) lost 2.61 percent. Eldorado Gold Corp. (ELD.TO) surrendered 2.99 percent.

Crude oil ended sharply higher Wednesday, after the Senate announced an agreement to end the federal government shutdown and raise the U.S. debt ceiling limit to avert a default.

The Energy Index gained 0.58 percent, with U.S. crude oil futures for November delivery gaining $1.08 or 1.2 percent to close at $102.29 a barrel Wednesday on the Nymex.

Among energy stocks, Suncor Energy Inc.(SU.TO) gained 0.86 percent, while Enbridge Inc.(ENB.TO) gathered 0.71 percent. Imperial Oil Limited (IMO.TO) added 0.90 percent, while Talisman Energy Inc. (TLM.TO) dropped 0.16 percent.

The Financial Index added 0.33 percent with Bank of Montreal (BMO.TO) adding 0.61 percent, while Manulife Financial Corp. (MFC.TO) edged up 0.45 percent. The Bank of Nova Scotia (BNS.TO) gained 0.28 percent, while Toronto-Dominion Bank (TD.TO) added 0.25 percent. Royal Bank of Canada (RY.TO) inched down 0.01 percent, while National Bank of Canada (NA.TO) dropped 0.22 percent.

The Information Technology Index added 0.33 percent, with smartphone maker BlackBerry Limited (BB.TO) down 0.94 percent.

The Capped Industrials Index moved up 0.10 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 0.61 percent and Air Canada (AC.B.TO) jumping 4.18 percent.

Engineering and construction company SNC-Lavalin Group Inc. (SNC.TO) lost 4.53 percent after slashing its full-year profit forecast, largely impacted by a near C$75 million charge due to previously signed contracts.

Angle Energy (NGL.TO) jumped over 19.29 percent after indicating it would be acquired by Bellatrix Exploration Ltd. (BXE.TO) in exchange of either: $3.85 in cash; or 0.4734 of a Bellatrix common share for each share held by Angle shareholders. Bellatrix shed 4.91 percent.

In economic news, Statistics Canada said manufacturing sales edged down 0.2 percent to $49.5 billion in August, following three months of gains. Sales were down in the miscellaneous, food and motor vehicle assembly industries, while gains were seen in the aerospace product and parts and primary metal industries.

In economic news, homebuilder confidence in the U.S. unexpectedly decreased in October, a report from the National Association of Home Builders showed Wednesday. The NAHB/Wells Fargo Housing Market Index dropped to 55 in October from a downwardly revised 57 in September. Economists expected the index to come in unchanged, compared to the 58 originally reported for the previous month.

Eurozone inflation slowed to 1.1 percent in September as initially estimated from 1.3 percent in August, final data from Eurostat showed. Inflation has remained below the European Central Bank's 2 percent ceiling.

Meanwhile, eurozone foreign trade surplus fell more than expected in August, the latest data from the statistical office Eurostat showed. The region's goods trade with the rest of the world resulted in a surplus of EUR 7.1 billion in August, down from a EUR 18 billion surplus in July. This was forecast to fall to EUR 10 billion. A year earlier, the surplus amounted to EUR 4.6 billion.

Elsewhere, the number of people claiming job-seeker's allowance plunged more than expected in September to the lowest since January 2009, data showed. Jobless claims declined 41,700 to 1.35 million, the lowest figure since January 2009, the Office for National Statistics said. The decrease was sharper than the consensus of 25,000 drop.

Britain's jobless claims declined the most since 1997 in September, with the claimant count dropping 41,700 to 1.35 million, the lowest since January 2009. This was the sharpest fall since June 1997, exceeding the consensus for a 25,000 decline.