07.08.2013 22:46:36
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TSX Ends Lower On Fed Stimulus Concerns - Canadian Commentary
(RTTNews) - Canadian stocks ended at a near four-week low Wednesday, led by energy and mining stock, on cue from declining global equity markets with increasing concerns over the U.S. Federal Reserve plans to scale down its quantitative easing program in the near future. Investors pondered over the hawkish comments from two Fed officials signaling an early withdrawal of stimulus measures by the Fed, while awaiting further cues from other Fed officials during the week.
Fed Bank of Chicago President Charles Evans said he would not rule out the central bank starting the cutbacks as early as the September policy meeting, echoing similar sentiments from Atlanta Fed President Dennis Lockhart. The statements increased speculation that a recovery in the U.S. economy will prompt a stimulus cut sooner rather than later.
The S&P/TSX Composite Index closed Wednesday at 12,412.73, down 56.59 points or 0.45 percent. The index touched an intraday high of 12,469.32 and a low of 12,400.15.
The Capped Materials Index gained 0.31 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) up 1.08 percent.
The Global Gold Index moved up 0.22 percent, with gold futures for December delivery adding $2.80 or 0.2 percent to close at $1,285.30 an ounce Wednesday on the Nymex.
Among gold stocks, Barrick Gold Corp. (ABX.TO) ended flat at $16.05, while Yamana Gold Inc. (YRI.TO) also ended flat at $9.31 percent. Kinross Gold Corp. (K.TO) ended flat at $5.13. IAMGOLD Corp. (IMG.TO) slipped 1.75 percent, while Goldcorp Inc. (G.TO) dipped 0.30 percent.
The Diversified Metals & Mining Index fell 1.15 percent, with First Quantum Minerals Ltd. (FM.TO) down 2.53 percent. Osisko Mining Corp. (OSK.TO) gained 2.19 percent, Teck Resources Limited (TCK.B.TO) shed 0.12 percent, and Lundin Mining Corp. (LUN.TO) up 0.25 percent.
Earlier today, the Energy Information Administration's weekly oil report showed U.S. crude oil inventories to have dipped 1.3 million barrels, while gasoline stocks added 0.10 million barrels in the week ended August 2. Analysts expected crude oil inventories to dip 2 million barrels and gasoline stocks to shed 1 million barrels last week.
The Energy Index fell 0.78 percent, with U.S. crude oil futures for September delivery dropping $0.93 or 0.9 percent to close at $104.37 a barrel Wednesday on the Nymex.
Among energy stocks, Cenovus Energy Inc. (CVE.TO) was down 1.94 percent, while Talisman Energy (TLM.TO) gained 0.18 percent. Encana Corp. (ECA.TO) dropped 1.90 percent, while Suncor Energy Inc. (SU.TO) lost 0.65 percent.
The Financial Index gained 0.51 percent with Bank of Montreal (BMO.TO) down 0.55 percent, Royal Bank of Canada (RY.TO) down 0.95 percent, and Toronto-Dominion Bank (TD.TO) slipping 0.92 percent.
The Information Technology Index lost 0.19 percent, with BlackBerry Limited (BB.TO) down 3.33 percent.
The Capped Industrials Index dropped 0.75 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) down 2.04 percent.
Dairy and bakery products maker Saputo Inc. (SAP.TO) slipped 0.47 percent after missing analysts' estimates. Saputo reported its first-quarter net income improved to C$136.7 million or C$0.69 per share from C$121.8 million or C$0.60 per share last year. Analysts expected earnings of C$0.73 per share for the quarter.
Airlines company Air Canada (AC_A.TO) jumped 25.47 percent after reporting its second-quarter net loss narrowed to C$23 million or C$0.09 per share from C$161 million or C$0.59 per share last year.
International pharmaceuticals company Valeant Pharmaceuticals International Inc. (VRX.TO) edged up 2.13 percent after reporting a swing to profit in second-quarter 2013, with net income of $10.87 million or $0.03 per share compared to a loss of $21.61 million or $0.07 per share a year ago. For full-year 2013, the company now expects cash earnings per share to be in the range of $6.00 to $6.20, up from the prior outlook of $5.55 to $5.85 per share.
In economic news Statistics Canada said municipalities issued building permits worth $6.6 billion in June, down 10.3 percent from May and the first decrease in six months. Despite this decline, the total value of building permits continued to trend upward. The decrease in June came mainly from the non-residential sector in Quebec and the residential sector in Ontario, the agency added.
From the euro zone, Germany's industrial production increased in June at a faster rate than expected by economists, latest data showed. Industrial production increased a seasonally adjusted 2.4 percent month-on-month in June, recovering from the previous month's revised 0.8 percent decrease, preliminary estimates from the Federal Ministry of Economics and Technology showed. Economists had forecast output to rise 0.3 percent, following May's originally recorded 1 percent fall.
Switzerland's consumer prices remained unchanged in July from a year ago, after falling 0.1 percent in June, the Federal Statistical Office said. Economists had forecast prices to drop 0.1 percent.
Elsewhere, Bank of England issued an explicit guidance on the future conduct of monetary policy. The Monetary Policy Committee, led by Governor Mark Carney, "intends at a minimum to maintain the current highly stimulative stance of monetary policy until economic slack has been substantially reduced, provided this does not entail material risks to either price stability or financial stability", the central bank said in a statement.
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