TSX Ends Sharply Lower On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Friday, tracking sharply lower global equity markets, due to weakness in commodity prices and a series of disappointing economic reports with Canadian trade deficit at near record levels and building permits tumbling sharply.

Investors also reacted negatively to the U.S. Labor Department's monthly jobs report, fueling fears the Fed Reserve may be on track to raise interest rate in the near future. The highly anticipated jobs report for February showed stronger than expected growth, which pushed the unemployment rate down to its lowest level in well over six years.

A Labor Department report on Friday showed unemployment rate to have dropped to its lowest level in well over six years in February, with employment in the U.S. climbing much more than anticipated. The U.S. created 295,000 jobs in February with analysts anticipating about 240,000 new jobs in February.

The unemployment rate dropped to 5.5 percent in February from 5.7 percent in January, coming in below economists' estimates for a rate of 5.6 percent.

Meanwhile, a Commerce Department report showed U.S. trade deficit to have narrowed in line with analysts' estimates in January, reflecting a notable decrease in the value of imports.

U.S. stocks moved sharply lower, but climbed off their worst levels. The Dow tumbled 1.5 percent, the Nasdaq slumped 1.1 percent, and the S&P 500 plunged 1.4 percent. For the week, the Nasdaq fell 0.7 percent, while the Dow and the S&P 500 dropped 1.5 percent and 1.6 percent, respectively.

European markets closed mixed, after the better than expected U.S. jobs report for February, although concerns over the Federal Reserve raising interest rates in the near future persisted.

The European Central Bank provided additional details about its quantitative easing program yesterday, which sparked a rally in the region. ECB President Mario Draghi revealed that the bank will purchase $66.3 billion worth of bonds each month beginning on March 9th. The central bank previously indicated that the $1.1 trillion asset purchase program is expected to continue until September of 2016.

The benchmark S&P/TSX Composite Index closed Thursday at 14,952.50, down 150.61 points or 1.00 percent. The index scaled an intraday high of 15,145.28 and a low of 14,910.30.

On Thursday, the index closed up 20.27 points or 0.13 percent, at 15,103.11. The index scaled an intraday high of 15,189.10 and a low of 15,094.84.

Gold futures plunged to end lower with the dollar racing toward parity against the euro and on fears the robust U.S. jobs growth may well see the Federal Reserve hiking interest rates mid-year. Gold closed at its lowest for the year.

The Gold Index plummeted 6.40 percent, with gold for April delivery plunging $31.90 or 2.7 percent to settle at $1,164.30 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Goldcorp (G.TO) plunged 7.19 percent, Barrick Gold Corp. (ABX.TO) dived 6.37 percent, and Kinross Gold Corp (K.TO) plummeted 8.43 percent.

Eldorado Gold Corp. (ELD.TO) dropped 4.55 percent and Yamana Gold Inc. (YRI.TO) is down 7.81 percent. B2Gold (BTO.TO) fell 7.58 percent and IAMGOLD (IMG.TO) surrendered 6.23 percent.

The Capped Materials Index dived 3.42 percent on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.19 percent and Agrium Inc. (AGU.TO) dipped 0.38 percent.

Franco-Nevada (FNV.TO) fell 3.40 percent, while Agnico Eagle Mines (AEM.TO) dived 7.76 percent. Silver Wheaton (SLW.TO) dropped 3.15 percent.

Crude oil ended sharply lower as the dollar continued to strengthen against a basket of select currencies after the upbeat jobs data from the U.S.

Prices withstood massive increases in U.S. crude oil inventories in recent weeks, but with little space left at storage facilities, the next move for crude prices may be back towards 6-year lows near $44 seen earlier in 2015.

The Energy Index fell 1.27 percent, with U.S. crude oil futures for April delivery, shedding $1.15 or 2.3 percent to settle at $49.61 a barrel on the New York Mercantile Exchange Friday.

Among energy stocks, Canadian Oil Sands Limited (COS.TO) fell 1.96 percent, Suncor Energy Inc. (SU.TO) shed 0.54 percent, Canadian Natural Resources Limited (CNQ.TO) dived 3.03 percent, and Encana Corp. (ECA.TO) dipped 0.34 percent.

Crescent Point Energy Corp. (CPG.TO) dropped 3.15 percent, while Cenovus Energy Inc. (CVE.TO) dipped 0.68 percent.

The heavyweight Financial Index gained 0.19 percent, with Bank of Nova Scotia (BNS.TO) down 0.84 percent, Bank of Montreal (BMO.TO) slipped 0.52 percent, and Royal Bank of Canada (RY.TO) inched up 0.03 percent.

National Bank of Canada (NA.TO) dipped 0.29 percent, while Canadian Imperial Bank of Commerce (CM.TO) gained 0.63 percent. Toronto-Dominion Bank (TD.TO) added 0.33 percent.

The Diversified Metals & Mining Index dropped 1.81 percent, as First Quantum Minerals Ltd. (FM.TO) fell 2.08 percent, Lundin Mining Corp. (LUN.TO) shed 3.06 percent, and Teck Resources (TCK-B.TO) surrendered 3.51 percent.

Sherritt International Corp. (S.TO) dropped 3.04 percent, HudBay Minerals Inc. (HBM.TO) shed 0.21 percent, and Finning International Inc. (FTT.TO) gained 1.52 percent.

The Health Care Index dropped 1.46 percent, as Extendicare Inc. (EXE.TO) shed 1.52 percent. Valeant Pharmaceuticals International, Inc. (VRX.TO) fell 1.54 percent, while Catamaran Corp. (CCT.TO) surrendered 1.31 percent.

The Capped Industrials Index fell 1.12 percent, with Bombardier Inc. (BBD.B.TO) dipped 0.85 percent and Air Canada (AC.TO) dropped 1.13 percent.

The Information Technology Index surrendered 0.67 percent, with BlackBerry Limited (BB.TO) down 1.25 percent.

Among other tech stocks, Sierra Wireless, Inc. (SW.TO) dropped 2.13 percent, Constellation Software Inc. (CSU.TO) fell 0.73 percent, and Descartes Systems Group Inc. (DSG.TO) gained 3.02 percent.

The Capped Telecommunication Index fell 0.79 percent, with Rogers Communications Inc. (RCI.B.TO) gaining 0.21 percent, BCE down 1.58 percent and TELUS Corp. (T.TO) dropped 0.78 percent.

Enghouse Systems (ESL.TO) gained 3.75 percent, after reporting a first quarter earnings of $0.09 per share, compared to $0.23 per share a year ago.

Algonquin Power & Utilities (AQN.TO) sunk 9.06 percent, after it rescheduled the release of its fourth quarter results.

On the economic front, the Canadian trade deficit widened to C$2.45 billion in January, according to a report from Statistics Canada Friday morning. Economists had expected a deficit of C$1.00 billion. The trade deficit for December was also revised to C$1.22 billion, from the C$649 million that was originally reported.

Statistics Canada also reported Friday that Canadian building permits tumbled by 12.9 percent in January, to C$6.13 billion. Economists had expected a decline of 4.3 percent. The December result was also revised to a gain of 6.1 percent.

Canadian labor productivity for the fourth quarter dipped by 0.1 percent according to a report released by Statistics Canada this morning. Economists had expected no change in productivity, after the gain of 0.2 percent in the third quarter.

In economic news, a Commerce Department report on Friday showed U.S. trade deficit to have narrowed in line with estimates in January, reflecting a notable decrease in the value of imports.

U.S. trade deficit narrowed to $41.8 billion in January from a revised $45.6 billion in December, which was in line with the consensus estimate.

U.S. consumer credit rose less than expected in January with a drop in revolving credit partly offsetting an increase in non-revolving credit, a Federal Reserve report showed Friday. The consumer credit increased by $11.6 billion in January following an upwardly revised $17.9 billion jump in December. Economists expected credit to climb by $15.0 billion compared to the $14.8 billion increase originally reported for the previous month.

The eurozone economy expanded as initially estimated in the fourth quarter on broad-based support from spending, investment and exports. Gross domestic product grew 0.3 percent sequentially, slightly faster than the third quarter's 0.2 percent expansion, second estimates from Eurostat showed Friday. The statistical office confirmed the estimate released on February 13.

Germany's industrial production grew for the fifth straight month in January signaling that growth is gaining a foothold in the biggest euro area economy, although orders data cast doubt over recovery.

Industrial production grew 0.6 percent in January from December, which was the fifth consecutive rise, data from Destatis showed Friday. This was also the first time since early 2011 that output rose for five straight months. The monthly rise in January was faster than a 0.5 percent rise forecast by economists, but slower than December's revised 1 percent growth.

The French trade deficit decreased unexpectedly in January, the customs office reported Friday. The trade gap widened to EUR 3.7 billion in January from EUR 3.3 billion in December and November. The deficit was forecast to narrow to EUR 3 billion.