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TSX Closes Lower On Mixed Earnings - Canadian Commentary

Canadian stocks closed lower Friday, weighed down mostly by some disappointing earnings. This despite some positive U.S. economic data and optimism for a Greece sovereign debt crisis resolution.

Investors were cautious ahead of an European finance ministers meeting Monday to decide on the bailout package for Greece and were reluctant to add positions ahead of a long weekend as they digest mixed earnings reports from corporates.

German Chancellor Angela Merkel's spokesman in a statement expressed confidence that the eurozone finance ministers will reach an agreement on Monday. The issue of bailout fund release was discussed among Merkel, Greek Prime Minister Lucas Papademos and Italian Prime Minister Mario Monti in a conference call on Friday.

Toronto's main index closed Wednesday at 12,458.30, down 27.29 points or 0.22 percent. The S&P/TSX Composite Index touched an intraday high of 12,510.35 and a low of 12,428.90.

For the week, the S&P/TSX Composite Index gained 0.15 percent.

The TSX Venture Index closed at 1,658.15, up 10.04 points or 0.61 percent. The index opened at 1,657.62 compared to its previous close of 1,648.11.

The Canadian stock market will remain closed on Monday for Family Day holiday.

Major decliners on the S&P/TSX Composite Index included the Materials Index and the Metals and Mining Index. The Financial Index was also down, while the Energy Index was among the gainers.

Energy stocks were firm amid a batch of encouraging earnings reports and rising oil price. The Energy Index improved 0.36 percent with Talisman Energy Inc. (TLM.TO) gaining 1.64 percent and Suncor Energy Inc. (SU.TO) dropping 0.29 percent. Canadian Natural Resources Limited (CNQ.TO) gained 0.84 percent.

Enbridge Inc. (ENB.TO) was down 4.13 percent after its quarterly earnings missed Street expectations. The oil transporter reported fourth quarter adjusted net earnings of C$275 million or C$ 0.37 per share up from C$238 million or C$0.32 per share recorded a year ago. Analysts were expecting the company to report earnings of $0.39 per share this quarter.

Encana Corp. (ECA.TO) shed 0.89 percent after reporting adjusted fourth quarter below estimates. Separately, the company said it reached an agreement with Mitsubishi Corp. that would see the Japanese global integrated business enterprise invest nearly C$2.9 billion for a 40 percent interest in the Cutbank Ridge Partnership.

Petroleum and natural gas company PetroBakken Energy (PBN.TO) soared 5.33 percent after it said it would divest certain non-core assets to Crescent Point Energy (CPG.TO). for gross cash proceeds of $427 million. Meantime, shares of Crescent Point lost over 2 percent.

Crude oil closed at a nine-month high on the positives in Europe and demand concerns surrounding Iran and the production outages in Yemen and South Sudan.

Light Sweet Crude Oil futures for March delivery gained $0.93 or 0.9 percent to settle at $103.24 a barrel on the New York Mercantile Exchange on Friday.

Gold for April delivery, the most actively traded contract, dropped $2.50 or 0.1 percent to $1,725.90 an ounce Friday on the Comex division of the New York Mercantile Exchange. The Global Gold Index declined 1.50 percent.

Among the major losers were Barrick Gold (ABX.TO), down 2.44 percent and Kinross Gold Corp. (K.TO) down 1.81 percent. Agnico-Eagle Mines Ltd. (AEM.TO) shed 3.55 percent, while Goldcorp Inc. (G.TO) shed 0.93 percent.

The Materials Index dropped 1.01 percent with Champion Minerals Inc. (CHM.TO) shedding 6.60 percent. Potash Corporation of Saskatchewan Inc. (POT.TO) was up 0.48 percent. Uranium One Inc. (UUU.TO) gained 5.71 percent.

The Metals & Mining Index shed 0.87 percent with Teck Resources (TCK.B.TO) surrendering 2.74 percent and Lundin Mining Corp. (LUN.TO) up 0.80 percent.

Transportation systems maker Bombardier (BBD.B.TO) was up 0.88 percent, while another heavyweight, Blackberry maker Research In Motion (RIM.TO) dropped 1.96 percent.

The Financial Index dropped 0.12 percent with Royal Bank (RY.TO) down 0.37 percent and Manulife Financial Corp. (MFC.TO) up 0.64 percent. TD Bank (TD.TO) was up 0.41 percent, while Bank of Nova Scotia (BNS.TO) marginally edged up 0.02 percent.

Property and casualty insurance services provider Fairfax Financial Holdings (FFH.TO) dived nearly 6 percent after reporting a wider fourth-quarter net loss of $771.5 million or $38.47 per share compared to $494.4 million or $24.77 per share in the fourth quarter of 2010.

Brookfield Asset Management Inc. (BAM.TO) on Friday reported a fourth-quarter profit that declined 46 percent from last year. Still, the per share profit beat market expectations.

Soft drink producer Cott Corp. (BCB.TO) lost 4.28 percent after slipping in to the red in fourth quarter, reporting net loss of $12.00 million or $0.12 per share, compared to a net profit of $15 million or $0.16 per share a year ago.

Canadian National Railway Co. (CNI.TO) was down 0.14 percent. The company on Friday announced plans to improve infrastructure.

In economic news Statistics Canada said consumer prices rose 2.5 percent in January compared the same month a year ago. Economists expected January's increase to match the 2.3 percent annual rise seen in December. On a monthly basis, consumer prices were up 0.5 in January compared to December. Meanwhile, the Bank of Canada's closely watched core index rose 2.1 percent, after increasing 1.9 percent in December. The result is slightly higher, but within the comfort zone, of the Bank of Canada's 2 percent target range.

From south of the border, the Conference Board's report on Friday showed its index of leading economic indicators increased for the fourth consecutive month in January, indicating a somewhat more positive U.S. economic conditions in early 2012.

The Conference Board said its leading economic index rose by 0.4 percent in January following a revised 0.5 percent increase in December. Economists had been expecting the index to increase by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.

The U.S. Labor Department said the Consumer Price Index increased by 0.2 percent in January. Most economists had forecast a slightly higher, 0.3 percent, increase for January. The price increases were broadly spread across the economy, with "core" prices - excluding the volatile food and energy sectors, also rising 0.2 percent in January.

From the euro zone, Germany's producer price inflation slowed for the fourth month in a row, data released by the Federal Statistical Office showed. The output price inflation slowed to 3.4 percent in January from 4 percent in December. Economists expected inflation to ease to 3.2 percent.

Meanwhile, U.K. retail sales increased in January, against economists' expectations for a decline according to the Office for National Statistics. Retail sales volume, including auto fuel, advanced 0.9 percent month-on-month. This was against economists' forecast for a 0.3 percent decline.

by RTT Staff Writer

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