Canadian stocks rallied to end marginally higher Wednesday, led mostly by gold issues after the U.S. Federal Reserve Policy minutes showed signs that additional quantitative easing may be forthcoming in the near future. Earlier, Toronto stocks were down on some weak retail data from the country and soft existing home sales data from across the border.
Investor concerns over the eurozone resurfaced after some news attributed to the Greek prime minister indicated the requirement of extended time to enforce strict austerity measures as demanded by its major lenders.
The S&P/TSX Composite Index closed Wednesday at 12,118.99, up 2.07 points or 0.02 percent. The Index touched an intraday high of 12,125.84 and a low of 12,034.10.
The Federal Reserve said information reviewed at the July 31-August 1 meeting indicated economic activity to have increased at a slower pace in the second quarter than earlier in the year with little improvement in the labor market conditions in recent months.
The Fed seems to be losing patience with the pace of the fragile U.S. economic recovery, minutes of the recent policy meeting said. Several members of the Federal Reserve were of the opinion that additional monetary policy accommodation is likely warranted unless the economy improves substantially. This may pave the way for additional round of quantitative easing measures at their next meeting in September.
From the eurozone, a news report credited the Greek Prime Minister Antonis Samaras as suggesting his country requires more time to enforce the strict austerity measures and reforms demanded by its lenders, but does not need additional funding. Samaras remarks came in an interview with a German newspaper.
Jean-Claude Juncker, the Eurogroup chief, however, indicated the request for time would depend on the the three major lenders, namely the European Central Bank, the International Monetary Fund, and the EU. Samaras is slated to meet leaders from Germany and France later this week.
Data from the Energy Information Administration showed U.S. crude oil inventories to have dropped 5.4 million barrels and gasoline stocks down 1 million barrels in the week ended August 17. Analysts expected crude oil inventories to dip by 2 million barrels and gasoline stocks to shed 1.25 million barrels last week.
The Energy Index slipped 0.53 percent with U.S. crude oil futures for September delivery up $0.42 or 0.4 percent to close at $97.26 a barrel Wednesday on the NYMEX.
Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) dipped 0.98 percent, Suncor Energy Inc. (SU.TO) shed 1.43 percent, and Encana Corp. (ECA.TO) gained 0.59 percent.
The Metals & Mining Index edged down 0.01 percent, with Teck Resources Limited (TCK.B.TO) down 0.57 percent, while Lundin Mining Corp. (LUN.TO) moved up 0.64 percent. First Quantum Minerals Ltd. (FM.TO) gathered 0.36 percent and Inmet Mining Corp. (IMN.TO) gained 0.79 percent. Osisko Mining Corp. (OSK.TO) moved up 1.49 percent.
The Global Gold Index moved up 2.39 percent, despite gold futures for December delivery dropping $2.40 or 0.2 percent to close at $1,640.50 an ounce Wednesday on the NYMEX. The Capped Materials Index gained 1.78 percent.
Among gold stocks, Barrick Gold (ABX.TO) gained 2.19 percent, Yamana Gold Inc. (YRI.TO) was up 3.99 percent, Eldorado Gold Corp. (ELD.TO) surged 4.67 percent, and Kinross Gold (K.TO) gathered 3.93 percent.
The Financial Index shed 0.53 percent with Royal Bank of Canada (RY.TO) down 1.05 percent, Bank of Nova Scotia (BNS.TO) down 1.07 percent, and Toronto-Dominion Bank (TD.TO) edged down 0.19 percent. Manulife Financial Corp. (MFC.TO) gained 0.63 percent.
Among heavyweights, fertilizer maker Potash Corporation of Saskatchewan Inc. (POT.TO) dropped 0.07 percent, transportation systems maker Bombardier Inc. (BBD.A.TO, BBD.B.TO) edged down 0.55 percent. Smartphone maker Research In Motion (RIM.TO) surrendered 0.99 percent.
Telecommunications company Telus Corp. (T.TO) slipped 0.68 percent after putting a new proposal to exchange its non-voting shares into common shares on a one-for-one basis to a democratic vote of all its shareholders.
In economic news, Statistics Canada said retail sales in the country declined 0.4 percent to $38.7 billion in June, more than offsetting the gain in May. Lower sales were reported in 7 of 11 sub-sectors, representing 64 percent of retail trade. In volume terms, retail sales edged down 0.1 percent. Economists expected a 0.1 percent increase in sales.
In economic news from the U.S., the National Association of Realtors said existing home sales rose 2.3 percent to an annual rate of 4.47 million in July from 4.37 million in June. Economists had been expecting existing home sales to climb to an annual rate of 4.50 million.
Earlier today, data out of Japan revealed a wider-than-expected trade deficit for July, with merchandise deficit widening to 517.382 billion yen in the month compared with forecasts for a shortfall of 270.0 billion yen following the downwardly revised 60.3 billion surplus in June.
by RTT Staff Writer
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