TSX Ends Marginally Lower On Mixed Data - Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day gain to end a shade lower Wednesday, on some soft data out the U.S. that more then offset positives from an upbeat eurozone gross domestic product growth in the second quarter. Investor worries over the U.S. Federal Reserve plans to dilute its quantitative easing program in the near future continued to dominate the market, driven by weakness in the industrial and financial sector, although gold stocks climbed smartly.

With an increase in prices for pharmaceutical preparations offset by a drop in energy prices, a Labor Department report on Wednesday showed U.S. producer prices unexpectedly came in unchanged in July. The core producer price index, which excludes food and energy prices, edged up by 0.1 percent in July.

Eurozone economy may have turned the corner with the single currency bloc's two largest economies, Germany and France, recording better-than-expected growth in the second quarter of 2013, helped by robust domestic demand.

The S&P/TSX Composite Index closed Wednesday at 12,639.30, down 2.89 points or 0.02 percent. The index touched an intraday high of 12,664.17 and a low of 12,614.39.

The Information Technology Index gathered 0.21 percent, with BlackBerry Limited (BB.TO) gaining 1.06 percent.

The Capped Materials Index jumped 2.31 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) surrendering 1.40 percent and Agrium Inc. (AGU.TO) losing 0.23 percent.

The Global Gold Index surged 4.66 percent, with gold futures for December delivery adding $12.90 or 1 percent to close at $1,333.40 an ounce Wednesday on the Nymex.

Among gold stocks, Barrick Gold Corp. (ABX.TO) jumped 4.78 percent, while Yamana Gold Inc. (YRI.TO) gathered 4.20 percent. Kinross Gold Corp. (K.TO) surged 6.45 percent, while Goldcorp Inc. (G.TO) added 3.58 percent. IAMGOLD Corp. (IMG.TO) surged 6.94 percent.

The Diversified Metals & Mining Index gained 0.69 percent, with First Quantum Minerals Ltd. (FM.TO) up 0.80 percent. Osisko Mining Corp. (OSK.TO) jumped 4.41 percent, Teck Resources Limited (TCK.B.TO) gained 2.67 percent, and Lundin Mining Corp. (LUN.TO) down 2.64 percent.

Earlier today, the Energy Information Administration's weekly oil report showed U.S. crude oil inventories to have declined 2.8 million barrels, while gasoline stocks dropped 1.2 million barrels in the week ended August 9. Analysts expected crude oil inventories to dip 1.5 million barrels and gasoline stocks to shed 2 million barrels last week.

The Energy Index moved up 0.17 percent, with U.S. crude oil futures for September delivery up $0.02 to close at $106.85 a barrel Wednesday on the Nymex.

Among energy stocks, Cenovus Energy Inc. (CVE.TO) slipped 0.68 percent, while Talisman Energy (TLM.TO) dropped 1.71 percent. Encana Corp. (ECA.TO) gained 0.61 percent, while Suncor Energy Inc. (SU.TO) added 2.05 percent.

The Financial Index dropped 0.22 percent with Bank of Montreal (BMO.TO) up 0.09 percent, Royal Bank of Canada (RY.TO) down 0.19 percent, and Toronto-Dominion Bank (TD.TO) up 0.01 percent. Manulife Financial Corp. (MFC.TO) dropped 0.33 percent.

The Capped Industrials Index shed 0.77 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) shedding 0.62 percent.

In economic news, the U.S. Labor Department said its producer price index was unchanged in July following a 0.8 percent increase in June. Economists expected the index to increase by about 0.3 percent. The unchanged reading on producer prices in July came amid a 0.2 percent drop in energy prices, following a 2.9 percent jump in the previous month. A 3.9 percent drop in prices for residential natural gas contributed to the decrease in energy prices along with lower prices for gasoline and finished lubricants.

The core producer price index, which excludes food and energy prices, edged up by 0.1 percent in July after rising by 0.2 percent in June. Core prices had been expected to increase 0.2 percent increase.

Eurozone economy shrugged off its longest recession on record in the second quarter of 2013, helped by strong recovery in Germany and France, the latest figures from Eurostat revealed Wednesday. Eurozone gross domestic product expanded 0.3 percent quarter-on-quarter in the second quarter, reversing a 0.3 percent contraction in the first quarter. Economists had forecast a GDP growth of 0.2 percent. This was the strongest growth rate since the first quarter of 2011, when GDP grew 0.7 percent. The 17-nation economy entered the recession in the first quarter of 2012 and has contracted for six consecutive quarters.

Germany's economic growth gathered pace after stagnating in the first quarter, while France moved out of recession with its gross domestic product expanding at the fastest pace in more than two years.

Preliminary estimates from the German Federal Statistical Office, or Destatis, show GDP grew 0.7 percent quarter-on-quarter after adjusting to seasonal and calendar variations in the three months through June. Economists had forecast a 0.6 percent expansion.

Meanwhile, initial estimates from the French statistical office, Insee, revealed the country's GDP rose 0.5 percent sequentially in the June quarter on a seasonally adjusted basis. This followed a 0.2 percent contraction in each of the past two quarters. Economists expected a more modest 0.2 percent GDP expansion.