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TSX Poised To Extend Losses At Open - Canadian Commentary


Canadian stocks are poised for a lower open Friday as commodities were struggling to move higher after a setback in U.S. fiscal cliff negotiations. If no agreement can be reached by the end of the year, automatic spending cuts and tax increases will go into effect - measures that many analysts agree would push the country back into recession. The House has now gone into recess until after Christmas.

U.S stock futures were pointing to a sharply lower open.

On Thursday, the S&P/TSX Composite Index snapped its two-session winning streak to shed 14.92 points or 0.12 percent to 12,388.71.

The price of crude oil was moving lower Friday morning as traders were concerned over demand growth after a setback in U.S. fiscal cliff negotiations. Crude for February lost $0.94 to $89.17 a barrel.

The price of gold was lingering around its four-month low Friday morning as risk appetite waned amid a setback in U.S. fiscal cliff negotiations. Gold for February edged up $2.50 to $1,648.40 an ounce.

In corporate news from Canada, Research In Motion (RIM.TO) reported that its third-quarter GAAP net income plunged to $9 million, or $0.02 per share from $265 million or $0.51 per share, in the same quarter last year. Adjusted net loss for the latest-quarter was $114 million or $0.22 per share. Analysts expected the company to report a loss of $0.35 per share.

Base-metals miner Teck Resources (TCK_B.TO) said coal sales for the fourth quarter are expected to exceed prior guidance of 6.2 million tonnes, and that production for the first quarter of 2013 is not expected to be materially impacted by the damage to Berth 1 at Westshore Terminals.

Nigeria focused oil exploration and production company Oando Energy Resources (OER.TO) announced that it would acquire ConocoPhillips' (COP) Nigerian businesses for approximately $1.79 billion.

Precious metals miner Queenston Mining (QMI.TO) announced that its shareholders have approved the acquisition of the company by Osisko Mining Corp.(OSK.TO), in an all-stock deal valued at about C$550 million.

Uranium miner Ditem Exploration (DIT.TO) said it has sold its 2 percent NSR on an asset called, the Matoush Property to Strateco Resources for C$1 million. Yesterday, the stock jumped 25 percent

Cogeco Cable Inc. (CCA.TO) announced that it would acquire PEER 1 Network Enterprises (PIX.TO) by way of takeover bid of C$3.85 in per share, in cash. The purchase price values PEER 1's equity at approximately $526 million on a fully diluted basis.

In economic news, Statistics Canada said inflation recorded its smallest year-over-year gain, rising just 0.80 percent in November. The consumer price index (CPI) rose 1.2 percent in October. On a seasonally adjusted monthly basis, the CPI decreased 0.2 percent in November after increasing 0.2 percent in October.. Meanwhile, The Bank of Canada's core index rose 1.2 percent in the 12 months to November, following a 1.3 percent increase in October.

Separately, the agency said real gross domestic product edged up 0.1 percent in October, after stalling in September. The output of service industries advanced 0.1 percent in October, largely due to increases in wholesale and retail trade. Goods production was unchanged in October. Increases in mining and oil and gas extraction and utilities were offset by declines in manufacturing and construction

From the U.S, the Commerce Department said that durable goods orders increased by 0.7 percent in November following a 1.1 percent increase in October. Economists had expected orders to increase by 0.5 percent, matching the increase that had been reported for the previous month. Excluding a 1.1 percent drop in orders for transportation equipment, durable goods orders surged up by 1.6 percent in November compared to a 1.9 percent jump in October.

From the euro zone, Germany's consumer sentiment is set to deteriorate in January, survey results from market research group GfK showed. The forward-looking index fell to 5.6 from a revised value of 5.8 in December. The index was forecast to remain unchanged at 5.9 points, the originally estimated figure for December.

Meanwhile, the U.K. economy grew 0.9 percent sequentially in the third quarter instead of previously estimated 1 percent expansion, final data from the Office for National Statistics showed. The third quarter growth reversed three straight quarters of contraction. Gross domestic product slipped 0.4 percent in the second quarter and by 0.2 percent in the first quarter of 2012.

by RTTNews Staff Writer

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