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TSX Down On US Fiscal Cliff Anxiety - Canadian Commentary

TSX Down On US Fiscal Cliff Anxiety - Canadian Commentary
12/13/2012 11:10 AM ET

Snapping their four-session winning streak, Canadian stocks were lingering in the red Thursday morning as traders now look past another monetary stimulus from the Federal Reserve, turning their focus on the progress of budget discussions in the U.S.

Yesterday, the U.S. Federal Reserve announced that it will replace its "Operation Twist" program, which expires at the end of the year, with the purchase of longer-term Treasury securities at a pace of $45 billion per month. The central bank also said it will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.

Elsewhere, European finance ministers agreed on euro zone banking union, ahead of EU summit in Brussels later today. The ministers plan to make the supervisory system fully operational by March 2014 or 12 months after the entry into force of the legislation, whichever is later.

The S&P/TSX Composite Index lost 52.65 points or 0.43 percent to 12,300.44, after gaining just over 200 points or about 2 percent in the past four straight sessions.

The price of gold was moving lower Thursday morning on profit taking after the U.S. Federal Reserve announced additional bond purchase program. Gold for February lost $19.50 to $1,698.40 an ounce.

Among gold plays, Kirkland Lake Gold (KGI.TO) dived 15 percent.

Centamin Plc (CEE.TO) plunged nearly 50 percent after the precious and base metals miner said it is suspending operations at its principal asset Sukari Gold Mine mainly following issues with Egyptian General Petroleum Corp.

Agnico-Eagle Mines (AEM.TO), Allied Nevada Gold (ANV.TO) and Goldcorp. (G.TO) lost around 2 percent each.

The price of crude oil was lingering near a three-week low Thursday morning amid a generally steady U.S. dollar. Crude for January edged up $0.04 to $86.81 a barrel.

In the oil patch, Tahoe Resources Inc. (THO.TO) lost 3 percent, while Baytex Energy Corp. (BTE.TO) and Suncor Energy (SU.TO) were dipping close to 2 percent each.

Major household appliances and accessories company Coast Wholesale Appliances (CWA.TO) plummeted 28 percent after announcing that it will not be declaring a cash dividend for the month of December 2012.

Base-metals miner Primero Mining (P.TO) lost 9 percent after it said it would acquire Cerro Resources NL (CJO.V) for a total transaction value of approximately $119 million. Cerro shareholder will receive 0.023 of a Primero common share for each share held. On the other hand, shares of Cerro soared over 50 percent.

Oil and gas exploration and development company Angle Energy (NGL.TO) gained 7 percent after announcing that it would divest certain of its non-core natural gas-weighted assets in the Edson area of Alberta for $74 million.

Pharmaceutical company Cangene Corp. (CNJ.TO) swung to profit in first quarter, reporting profit of $4.5 million or $0.07 per share compared to a loss of $4.4 million or $0.07 per share in the same year-ago quarter. The stock gathered 4 percent

Software solutions provider Enghouse Systems (ESL.TO) reported lower fourth-quarter net income of C$8.35 million or C$0.32 per share compared to C$13.35 million or C$0.52 per share last year. Adjusted EBITDA for the quarter was C$10.2 million or C$0.39 per share compared to C$9.6 million or C$0.37 per share last year. Analysts expected the company to report profit per share of C$0.17 for the quarter. The stocks trading flat at C$17.290.

In economic news from Canada, the New Housing Price Index rose 0.2 percent in October, following similar increases throughout the year.

From the U.S., the Labor Department said that initial jobless claims fell to 343,000, a decrease of 29,000 from the previous week's revised figure of 372,000.

Meanwhile, a report from the Commerce Department showed that retail sales increased by 0.3 percent in November following a 0.3 percent decrease in October. Economists had been expecting retail sales to increase by about 0.6 percent. Excluding an increase in sales by motor vehicle and parts dealers, retail sales were unchanged for the second consecutive month, matching economist estimates.

From the euro zone, the Swiss National Bank decided to leave its minimum exchange rate of CHF 1.20 per euro unchanged as widely expected by economists. The target range for the three-month Libor was maintained at 0.0-0.25 percent.

by RTT Staff Writer

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