TSX Settles A Shade Higher On Energy Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks ended a tad higher for a second straight session on Wednesday, driven by strength in energy and gold stocks, even as most global equity markets declined. The U.S. Federal Reserve voted to keep its benchmark interest rate at zero after government data confirmed the U.S. economy stumbled badly in the first quarter.

The Fed left interest rates unchanged as was widely expected and acknowledged that economic growth slowed during the winter months, as evidenced by some disappointing U.S. GDP report for the first quarter.

The harsh winter having hindered the pace of U.S. recovery, the Fed has decided to hold off on a rate hike that once seemed imminent. All calendar references to a rate hike have been removed from the Fed's accompanying statement, meaning that policy makers will not hike rates until they see sufficient improvement in the labor market and a sustained uptick in inflation.

While the central bank did not provide any specific guidance about the outlook for interest rates, analysts noted that the statement did not rule out a rate hike in June. The Fed's unwillingness to speculate about the outcome of the June meeting likely reflects uncertainty about whether the economy will rebound from the weak growth seen in the first quarter.

Markets in Europe ended in the red, under pressure due to some mixed corporate earnings reports and eurozone economic confidence weaker than anticipated.

While U.S. economic growth in the first three months of 2015 was expected to be weak due to the severe winter, a Commerce Department report showed the country's gross domestic product to have increased less than anticipated.

The benchmark S&P/TSX Composite Index closed Wednesday at 15,347.34, up 1.27 points or 0.01 percent. The index scaled an intraday high of 15,363.79 and a low of 15,242.10.

On Tuesday, the index closed up 1.99 points or 0.01 percent, at 15,346.07. The index scaled an intraday high of 15,348.34 and a low of 15,278.69.

Gold futures ended lower, ahead of the crucial monetary policy decision from the Federal Reserve, even as rally in prices fizzled out with the dollar plummeting to monthly lows.

The Gold Index added 0.90 percent, with gold for June delivery shedding $3.90 or 0.3 percent to settle at $1,210.00 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) gained 1.44 percent, Yamana Gold Inc. (YRI.TO) dropped 1.03 percent, Agnico Eagle Mines Limited (AEM.TO) fell 0.67 percent, and IAMGOLD Corp. (IMG.TO) moved up 2.90 percent.

Goldcorp Inc. (G.TO) added 1.47 percent, while Eldorado Gold Corp. (ELD.TO) moved up 1.66 percent. Kinross Gold Corp (K.TO) gained 3.16 percent, while B2Gold (BTO.TO) shed 1.02 percent.

Crude oil ended at its highest for the year, after official data from the Energy Information Administration showed a decline in crude supplies at its storage hub in Cushing, Oklahoma, with inventories rising less than expected last week.

The Energy Index gained 0.90 percent, with U.S. crude oil futures for June delivery, the most actively traded contract, jumping $1.52 or 2.7 percent, to settle at $58.58 a barrel on the New York Mercantile Exchange Wednesday.

The weekly oil report from the U.S. Energy Information Administration said U.S. crude oil inventories rose 1.9 million barrels in the week ended April 24, while analysts expected an increase of 2.3 million barrels. The report showed U.S. crude oil inventories at 490.9 million barrels end last week. Stockpiles are still at its highest in about 80 years and have been climbing for the 16th straight week since the week ended January 9.

Among energy stocks, Suncor Energy Inc. (SU.TO) added 0.43 percent, Canadian Oil Sands Limited (COS.TO) gained 3.60 percent, and Crescent Point Energy Corp. (CPG.TO) moved up 1.46 percent.

Pacific Rubiales Energy Corp. (PRE.TO) jumped 3.91 percent, Canadian Natural Resources Limited (CNQ.TO) added 0.50 percent, Baytex Energy Corp. (BTE.TO) gathered 3.42 percent, and Cenovus Energy Inc. (CVE.TO) dropped 2.29 percent.

The Capped Materials Index gained 1.42 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) dipping 0.08 percent and Agrium Inc. (AGU.TO) inching up 0.12 percent.

Franco-Nevada Corp. (FNV.TO) gained 0.64 percent, while Silver Wheaton (SLW.TO) moved up 0.49 percent.

The Diversified Metals & Mining Index added 0.49 percent, with First Quantum Minerals Ltd. (FM.TO) down 0.81 percent, Teck Resources Limited (TCK.B.TO) fell 0.39 percent,

Sherritt International Corp. (S.TO) added 2.13 percent, Denison Mines Corp. (DML.TO) dived 5.22 percent, and HudBay Minerals Inc. (HBM.TO) gained 1.04 percent.

Capstone Mining (CS.TO) added 2.52 percent, after reporting a first quarter adjusted loss of $0.02 per share, compared to the loss of $0.01 per share last year.

The heavyweight Financial Index fell 0.12 percent, as Bank of Nova Scotia (BNS.TO) fell 0.09 percent, while Bank of Montreal (BMO.TO) dropped 2.01 percent. Royal Bank of Canada (RY.TO) ended flat at C$80.90 a share, while Canadian Imperial Bank of Commerce (CM.TO) dropped 0.07 percent.

However, Toronto-Dominion Bank (TD.TO) dipped 0.07 percent and National Bank of Canada (NA.TO) shed 0.18 percent.

First National Financial Corp. (FN.TO) added 1.57 percent, after reporting a first quarter loss of $0.09 per share, compared to the profit of $0.35 per share a year ago.

The Capped Health Care Index gained 1.13 percent with Concordia Healthcare Corp. (CXR.TO) gathered 1.96 percent, Catamaran Corp. (CCT.TO) dipping 0.11 percent, while Extendicare Inc. (EXE.TO) fell 0.51 percent.

Valeant Pharmaceuticals International Inc. (VRX.TO) gained 3.67 percent, after its first quarter adjusted earnings of $2.36 per share, up from $1.76 shares last year. Valeant also announced that Chief Financial Officer Howard Schiller has decided to step down, once a successor is appointed.

Nobilis Health (NHC.TO) gained 5.69 percent, after it entered into a Strategic Alliance Agreement with Renew Spinal Care.

The Capped Industrials Index dipped 0.07 percent, as Canadian Pacific Railway Limited (CP.TO) declined 0.70 percent, and Canadian National Railway Company (CNR.TO) gathered 0.45 percent.

Air Canada fell 1.75 percent, Finning International Inc. (FTT.TO) added 1.08 percent, and AutoCanada (ACQ.TO) gained 1.74 percent. Bombardier Inc. (BBD.B.TO) gathered 2.07 percent.

The Information Technology Index fell 1.95 percent, as BlackBerry Limited (BB.TO) fell 0.24 percent, Constellation Software Inc. (CSU.TO) gained 1.65 percent, Descartes Systems Group Inc. (DSG.TO) shed 0.55 percent, and Sierra Wireless, Inc. (SW.TO) surrendered 0.41 percent.

The Capped Telecommunication Index declined 0.81 percent, with Rogers Communications Inc. (RCI.B.TO) falling 1.37 percent and BCE Inc. (BCE.TO) shedding 0.37 percent. Manitoba Telecom Services Inc. (MBT.TO) dropped 0.76 percent.

Genworth MI Canada (MIC.TO) rose 4.03 percent. The company reported first quarter earnings of $1.08 per share, up from $1.00 in last year.

Stella-Jones (SJ.TO) jumped 5.92 percent, after reporting first quarter earnings of C$0.43 a share from C$0.33 a year ago.

Canadian Utilities (CU.TO) lost 0.99 percent. The company's first quarter adjusted earnings fell to C$130 million from C$186 million last year.

Wi-Lan (WIN.TO) tumbled 6.29 percent, after reporting a first quarter loss of $0.04 per share, compared to the profit of $0.03 per share in the previous year.

On the economic front, a Commerce Department report on Wednesday showed U.S. gross domestic product to have increased less than anticipated, even as economic growth in the first three months of 2015 was expected to be weak due to the severe winter weather. U.S. GDP inched up by just 0.2 percent in the first quarter following the 2.2 percent growth seen in the fourth quarter. The modest uptick compared to economist estimates for an increase of about 1.0 percent.

The National Association of Realtors report on Wednesday showed pending home sales in the U.S. rose to its highest level in almost two years in March, with more home buyers than usual entering the competitive spring market. NAR's pending home sales index climbed 1.1 percent to 108.6 in March from an upwardly revised 107.4 in February. Economists expected the index to increase by about 1.0 percent.

Eurozone economic confidence weakened unexpectedly in April after the Greece crisis dampened activity, a closely watched survey showed Wednesday. Meanwhile, bank lending grew for the first time in three years in March. The economic sentiment index dropped to 103.7 from 103.9, which was the highest score since July 2011, survey results published by the European Commission revealed. Economists had forecast the indicator to remain unchanged at 103.9 in April.

Lending to euro area households and firms increased for the first time in three years in March and money supply growth accelerated more-than-expected after the announcement of quantitative easing by the European Central Bank. Bank lending rose 0.1 percent in March from the prior year, reversing a 0.1 percent fall in February. Adjusted for loan sales and securitization, credit to the private sector climbed 0.8 percent, following February's 0.6 percent increase.

A measure of future economic activity in Eurozone rose for the fifth successive month in March, signaling sustained improvement in economic activity for the coming months, the Conference Board said Wednesday. The Conference Board Leading Economic Index for the euro area climbed 0.7 percent to 105.1, after a 0.6 percent rise in February.

German consumer prices increased for the third straight month to a 5-month high in April, preliminary data from Destatis showed Wednesday. Consumer prices rose 0.4 percent year-on-year in April, the fastest since November when prices grew 0.6 percent. Inflation also matched economists' expectations. This was the third consecutive rise in prices.

U.K. retail sales are forecast to pick up next month after recording a slowdown in April, results of the Distributive Trades Survey from the Confederation of British Industry showed Wednesday. The retail sales balance fell to +12 percent from +18 percent in March. Economists had forecast 25 percent rise.

U.K. house prices increased at the fastest pace since June 2014, the Nationwide Building Society reported Wednesday. House prices were up 1 percent in April from the prior month, the strongest growth since June 2014. Economists had forecast house price growth to rise marginally to 0.2 percent from 0.1 percent in March.