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TSX Ends Lower As Commodities Decline - Canadian Commentary

Canadian stocks settled lower for a second straight day Wednesday, on global cues as commodity prices fell sharply and on some disappointing consumer durables data from the U.S., raising concerns of economic recovery.

Toronto's main index, the S&P/TSX, closed Wednesday at 12,413.86, down 98.18 points or 0.78 percent. The S&P/TSX Composite Index touched an intraday high of 12,470.96 and a low of 12,354.85.

The TSX Venture Index closed at 1,550.25, down 24.81 points or 1.58 percent. The index opened at 1,568.60 compared to its previous close of 1,575.06.

Almost all major components of the S&P/TSX Index were in the red, led by resource stocks, with the exception of the Telecommunications Index.

The Metals & Mining Index plunged 3.45 percent with Teck Resources (TCK.B.TO) down 3.5 percent, First Quantum Minerals (FM.TO) down 3.03 percent. Osisko Mining Corporation (OSK.TO) down 1.33 percent, and Lundin Mining Corp. (LUN.TO) shedding 4.65 percent.

Light Sweet Crude Oil futures for May delivery, dropped $1.92 or 1.8 percent to close at $105.41 a barrel on the NYMEX Wednesday.

Oil prices were impacted after a report from the EIA showed U.S. crude oil inventories for the week ended March 23 jumped 7.10 million barrels, more than double the increase anticipated by analysts. Gasoline stocks were down by 3.50 million barrels in the week ended March 23. Analysts expected crude oil inventories to rise 2.55 million barrels and gasoline stocks to ease 1.55 million barrels last week. Reports of a possible release of U.S. strategic oil reserves also weighed on crude prices.

The Energy Index dived 1.50 percent with heavyweights Suncor Energy Inc. shedding 1.34 percent and Imperial Oil Limited (IMO.TO) down 2.98 percent. Encana Corp. (ECA.TO) dropped 0.35 percent, while Canadian Natural Resources Limited (CNQ.TO) fell 1.5 percent. Cenovus Energy (CVE.TO) shed 2.37 percent.

Transportation systems maker Bombardier (BBD.B.TO) dropped 1.18 percent, while Blackberry maker Research In Motion (RIM.TO) lost 1.16 percent.

Hydrocarbon resources focused energy company MGM Energy Corp. (MGX.TO) lost 2.44 percent after reporting a full-year 2011 loss that widened to C$160.9 million or C$0.51 per share from a year ago, due mainly to a C$150 million write-down in the book value of certain petroleum and natural gas properties.

Gold for April delivery dropped $27 or 1.6 percent to close at $1,657.90 an ounce Wednesday on the NYMEX. The Global Gold Index shed 1.73 percent.

Centerra Gold (CG.TO) rebounded with its stock gaining 5.91 percent. The stock plunged 15 percent yesterday after a revision of its 2012 production forecast for Kumtor Mine in central Asia.

Lake Shore Gold Corp. (LSG.TO) shed 6.56 percent, Eldorado Gold Corp. (ELD.TO) dropped 1.64 percent, and Kinross Gold Corp. (K.TO) lost 1.52 percent. Yamana Gold Inc. (YRI.TO) dropped 1.90 percent, while Barrick Gold Corp. (ABX.TO) fell 1.40 percent.

The Materials Index plummeted 1.80 percent with Potash Corporation of Saskatchewan Inc. (POT.TO) dropping 0.63 percent and Romarco Minerals Inc. (R.TO) shedding 2.02 percent. Mercator Minerals Ltd. (ML.TO) surrendered 5.37 percent.

The Financial Index slipped 0.06 percent with Manulife Financial Corp. (MFC.TO) shedding 0.72 percent and Sun Life Financial Inc. (SLF.TO) edging down 0.08 percent. Bank of Nova Scotia (BNS.TO) gained 0.25 percent, while the Royal Bank (RY.TO) edged up 0.07 percent.

Life sciences company Cardiome Pharma (COM.TO) shed 6.49 percent, despite reporting a fourth quarter loss that narrowed to $5.9 million or $0.10 per share, with analysts expecting a loss of $0.07 per share for the quarter.

Junior oil and natural gas company Crocotta Energy (CTA.TO) gained 4.53 percent after reporting a net loss of C$7.1 million or C$0.09 per share from a profit last year, with funds from operations rising to C$12.1 million or C$0.14 per share.

Pharmaceutical company Tekmira Pharmaceutical (TKM.TO) dropped 3.1 percent after reporting a full-year 2011 net loss of $9.9 million or $0.88 per share, compared to a loss of $12.4 million or $1.20 per share the previous year.

Helicopter transportation services provider Canadian Helicopters Group (CHL.A.TO) rose over 8 percent after reporting a swing to profit with net income of $10.2 million, while adjusted net income was $10.2 million or $0.78 per share from last year.

Mexico focused base-metals miner Primero Mining Corp. (P.TO) gained 5.81 percent notwithstanding its fourth quarter adjusted net income declining to $4.7 million or $0.05 per share from $10.2 million or $0.12 per share in the prior-year quarter.

Fortuna Silver Mines Inc. (FVI.TO) plunged over 18 percent after providing somewhat disappointing reserve and resource data.

In economic news, the U.S. Commerce Department said durable goods orders rose 2.2 percent in February following a revised 3.6 percent decrease in January. Economists had expected orders to increase by 2.9 percent compared to the 3.7 percent drop that had been reported for the previous month.

Excluding a 3.9 percent increase in orders for transportation equipment, durable goods orders increased by a modest 1.6 percent in February compared to a 3.0 percent decrease in January. The increase in ex-transportation orders came in slightly above economist estimates for a 1.5 percent increase.

From the euro zone, economic contraction in the U.K. during the fourth quarter was worse than estimated initially, revised data released by the Office for National Statistics showed. Gross domestic product fell 0.3 percent from the third quarter, compared to the previously estimated 0.2 percent decline.

Meanwhile, the third quarter U.K. GDP growth was revised up to 0.6 percent from 0.5 percent estimated previously. For the year 2011, GDP in volume terms increased 0.7 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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