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TSX Ends Lower On Commodity Stocks - Canadian Commentary

Canadian stocks closed moderately lower Tuesday, amid softness in resource stocks following some weak economic data from both Canada and U.S., although there were some signs of the eurozone crisis easing with successful bond auctions in the Netherlands, Spain and Italy.

Spain generated strong demand for its $2.6 billion auction of short-term debt, though yields were sharply higher. The yield on 10-year Dutch bonds dropped to 2.35 percent, while the French 10-year yield climbed down to 3.06 percent.

Toronto's main index, the S&P/TSX, closed Tuesday at 11,980.10, down 8.85 points or 0.07 percent. The S&P/TSX Composite Index touched an intraday high of 12,034.51 and a low of 11,957.59.

The TSX Venture Index closed at 1,365.77, down 5.26 points or 0.38 percent. The index opened at 1,371.46 compared to its previous close of 1,371.03.

Toronto stocks dropped sharply yesterday after some weak economic data showed manufacturing contracted in the eurozone and China. The recent political developments in France and Netherlands also rekindled concerns over the eurozone sovereign debt crisis escalating in the region.

Most major components of the S&P/TSX Index were in the red, with the exception of the Diversified Metals & Mining Index.

The Metals & Mining Index gained 0.03 percent, driven by First Quantum Minerals Ltd. (FM.TO) up 0.55 percent and Cline Mining Corp. (CMK.TO) down almost 8 percent.

Base-metals miner Teck Resources (TCK_B.TO) gained 1.73 percent after reporting adjusted first quarter profit of C$504 million or C$0.86 per share, up from C$450 million or C$0.76 per share n the prior-year quarter.

Baja Mining Corp. (BAJ.TO) plunged over 33 percent. It had lost over 37 percent yesterday after revealing cost increase of approximately $246 million, a 21.5% increase over the 2010 funding requirement.

Gold for June delivery gained $11.20 or 0.7 percent to close at $1,643.80 an ounce Tuesday on the NYMEX. The Global Gold Index dropped 0.29 percent.

Among gold stocks, Kinross Gold Corp. (K.TO) dropped 0.91 percent, while Eldorado Gold Corp. (ELD.TO) gained 1.08 percent. Goldcorp Inc. (G.TO) moved up 0.83 percent, while Lake Shore Gold Corp. (LSG.TO) slipped 6.25 percent. Barrick Gold Corp. (ABX.TO) shed 0.48 percent.

Light Sweet Crude Oil futures for June delivery, gained $0.44 or 0.4 percent to close at $103.55 a barrel on the NYMEX Tuesday.

The Materials Index shed 0.32 percent with Potash Corporation of Saskatchewan Inc. (POT.TO) dropping 0.94 percent, while Uranium One Inc. (UUU.TO) shed 1.39 percent. Cameco Corporation (CCO.TO) lost 0.66 percent.

The Energy Index dropped 0.26 percent with Canadian Natural Resources Limited (CNQ.TO) shedding 0.67 percent and Crew Energy Inc. (CR.TO) dropping 4.91 percent. Suncor Energy Inc. gained 0.10 percent, while Petrobakken Energy (PBN.TO) slipped 4.21 percent.

The Financial Index shed 0.08 percent, led by the Royal Bank of Canada (RY.TO) which was up 0.07 percent, while Bank of Nova Scotia (BNS.TO) was down 0.20 percent. The Toronto-Dominion Bank (TD.TO) lost 0.42 percent.

Smartphone maker Research In Motion (RIM.TO) was up 0.77 percent, while transportation systems maker Bombardier (BBD.B.TO) shed 0.74 percent.

Canfor Pulp Products (CFX.TO) dived over 10 percent after reporting a sharply lower first quarter earnings.

Electronics components maker Celestica Inc. (CLS.TO) jumped 5.62 percent after reporting first-quarter profit of $43.2 million or $0.20 per share, up from $30.0 million or $0.14 per share in the same quarter last year. Adjusted net earnings declined to $53.6 million or $0.25 per share, while analysts expected $0.21 per share

Canadian Pacific Railway (CP.TO) added 2.12 percent after raising its next quarterly dividend to C$0.35 per share from C$0.30 per share. Last Friday, Canadian Pacific Railway reported first-quarter profit of C$142 million or C$0.82 per share, up from a year ago.

In economic news, Canadian retails sales edged down 0.2 percent to $38.9 billion in February, after recording gains in the previous month, Statistics Canada said. Lower sales were reported in 5 of 11 sub-sectors, representing 57 percent of total retail sales. In volume terms, retail sales decreased 0.6 percent.

From south of the border, a report by Standard & Poor's revealed home prices in major U.S. metropolitan areas increased modestly in February. The report showed the S&P/Case-Shiller 20-City Composite Home Price Index edged up by 0.2 percent in February on a seasonally adjusted basis.

On an unadjusted basis, the S&P/Case-Shiller 20-city composite dropped 0.8 percent when compared to January, with the year-on-year decline at 3.5 percent. S&P believes the unadjusted stats as a more reliable indicator.

A report from the U.S. Commerce Department showed new sales of single-family houses came in at a seasonally adjusted annual rate of 328,000. This marks a notable 7.1 percent drop from the revised February rate of 353,000.

The Conference Board's consumer confidence index dropped for a second month to 69.2 in April from a downwardly revised March reading of 69.5. Economists expected the index to slip to 69.7 from the 70.2 originally reported for the previous month.

From the eurozone, the U.K.'s public sector net borrowing rose from a year-ago level in March, according to the Office for National Statistics. Public sector net borrowing excluding temporary effects of financial interventions, was GBP 18.2 billion in March, up from last year's GBP 17.95 billion. This was also higher than GBP 12.2 billion borrowing in February and above economists' forecast of GBP 16 billion.

by RTTNews Staff Writer

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