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TSX Settles Higher On Economic Data, Fed - Canadian Commentary

Canadian stocks settled smartly higher Wednesday, on some upbeat macroeconomic data out of the U.S. and Europe, led by resource stocks, offsetting a decline in gold prices. Investors also weighed the U.S. Federal Reserve Chairman Ben Bernanke's comments that the central bank will continue in its efforts to keep borrowing costs low.

In economic news, pending home sales in the U.S. rebounded more than expected in January, a report from the National Association of Realtors showed Wednesday. Meanwhile, new orders for U.S. manufactured durable goods dropped more than expected in January, although orders actually rose much more than expected when excluding orders for transportation equipment. Meanwhile, an European Commission survey showed eurozone economic confidence to have improved for the fourth straight month in February.

In his semi-annual testimony before the U.S. Senate Banking Committee, Bernanke said the Fed's $85 billion per-month asset-buying program is needed to preserve a nascent housing recovery and modest improvement in the jobs market. He indicated economic activity in the United States has continued to expand at a moderate if somewhat uneven pace. Bernanke blamed the stagnant fourth quarter economy on weather-related disruption and temporary declines in a few volatile categories of spending, presumably as a result of the fiscal cliff crisis.

The S&P/TSX Composite Index closed Wednesday at 12,732.39, up 71.85 points or 0.57 percent. The index touched an intraday high of 12,738.03 and a low of 12,628.240 .

The Global Gold Index plunged 2.21 percent, with gold futures for April delivery dropping $19.80 or 1.2 percent to close at $1,595.70 an ounce Wednesday on the Nymex.

The Capped Materials Index shed 0.38 percent, although Potash Corporation of Saskatchewan Inc.(POT.TO) gained 1.85 percent.

Among gold stocks, Goldcorp. Inc. (G.TO) shed 1.57 percent, Kinross Gold Corp. (K.TO) dropped 0.86 percent, and Barrick Gold Corp. (ABX.TO) surrendered 1.37 percent. Yamana Gold Inc. (YRI.TO) dropped 2.65 percent, while Eldorado Gold Corp. (ELD.TO) lost 3.39 percent.

The Diversified Metals & Mining Index gained 0.95 percent, with Teck Resources Limited (TCK.B.TO) up 1.62 percent, Osisko Mining Corp. (OSK.TO) down 1.95 percent, and First Quantum Minerals Ltd. (FM.TO) gained 2.12 percent. Lundin Mining Corp.(LUN.TO) surrendered 1.47 percent.

Latest data from the EIA revealed that US crude oil inventories moved up 1.1 million barrels, while gasoline stocks shed 1.90 million barrels in the week ended February 22. Analysts expected crude oil inventories to add 2.5 million barrels and gasoline stocks to decline 1 million barrels last week.

The Energy Index moved up 0.98 percent, with U.S. crude oil futures for April delivery gaining $0.13 or 0.1 percent, to close at $92.76 a barrel Wednesday on the Nymex.

Among energy stocks, Suncor Energy (SU.TO) gained 0.42 percent, Canadian Natural Resources Limited (CNQ.TO) was up 1.81 percent, and Husky Energy Inc. (HSE.TO) gathered 3.52 percent. Talisman Energy Inc.(TLM.TO) shed 0.24 percent, while Encana Corp. (ECA.TO) added 0.92 percent.

The Financial Index added 0.49 percent, with TD Bank Group (TD.TO) up 0.23 percent, Bank of Nova Scotia (BNS.TO) gained 0.17 percent, and Royal Bank of Canada (RY.TO) moved up 0.36 percent. Manulife Financial Corp. (MFC.TO) gathered 1.95 percent, while Bank of Montreal (BMO.TO) edged up 0.03 percent,

The Information Technology Index gathered 0.91 percent, with BlackBerry Inc. (BB.TO) up 0.89 percent.

The Capped Industrials Index gained 1.23 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 2.49 percent.

Oil and gas industry services company Trican Well Service (TCW.TO) lost 1.88 percent after slipping into the red in the fourth-quarter, reporting an adjusted loss of C$5.4 million or C$0.04 per share, compared to a profit of C$117.9 million or C$0.80 per share last year. Analysts expected earnings of C$0.04 per share for the quarter.

Power generation company TransAlta Corp. (TA.TO) shed 4.40 percent despite reporting improved fourth-quarter profit of C$38 million or C$0.15 per share compared to C$24 million or C$0.11 per share in the same period last year.

Sears Canada Inc. (SCC.TO) reported that its fourth-quarter net earnings were C$39.9 million or C$0.39 per share versus C$41.0 million or C$0.39 per share in the same quarter last year. The stock wad down 4.84 percent.

In economic news from the U.S., the Commerce Department said durable goods orders tumbled by 5.2 percent in January after jumping by a revised 3.7 percent in December. Economists had expected orders to fall by 4.0 percent compared to the 4.3 percent increase that had been reported for the previous month. Excluding the sharp drop in orders for transportation equipment, durable goods orders actually rose by 1.9 percent in January compared to a 1.0 percent increase in December. Ex-transportation orders had been expected to edge up by 0.2 percent.

The National Association of Realtors said its pending home sales index rose by 4.5 percent to 105.9 in January after falling by 1.9 percent to 101.3 in December. Economists had expected the index to increase by 3.0 percent.

From the euro zone, confidence among German households is set to improve for the second straight month in March, with expectations turning more optimistic as the financial crisis in the euro area is calming down, fueling hopes that recovery will gather momentum in the early months of the year, a monthly survey revealed. The results of a forward-looking survey by the GfK showed that the consumer confidence index based on the survey will rise to 5.9 in March from 5.8 in February, marking the second consecutive monthly growth. The projected figure matched economists' forecast.

The British economy contracted 0.3 percent quarter-on-quarter in the fourth quarter, unrevised from the previous estimate, the latest figures from the Office for National Statistics showed. The third quarter GDP figures were revised up to show a 1 percent growth for the period compared to 0.9 percent growth reported initially.

Eurozone economic confidence improved for the fourth straight month in February, survey data from the European Commission showed. The economic sentiment index came in at 91.1, up from 89.5 in the prior month. The reading stayed above the consensus forecast of 89.9.

by RTT Staff Writer

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