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TSX Settles Higher On Data, Bank Earnings - Canadian Commentary

Canadian stocks settled higher Thursday, tracking rising global markets on some positive economic data out of the U.S. and Europe, led by energy and financial stocks even as gold shares declined. Investors also weighed 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, U.S. GDP for the fourth quarter grew, albeit lesser than anticipated, while initial jobless claims dropped more than expected last week. An Institute for Supply Management - Chicago report showed business activity in the area to have increased more than expected to its highest level in more than a year.

The European markets ended in positive territory, after European Central Bank President Mario Draghi indicated that monetary stimulus would be continued. Draghi said the central bank is in no hurry to exit stimulus as he anticipates inflation to come significantly below the bank's target this year, giving room for maintaining an accommodative monetary stance.

The S&P/TSX Composite Index closed Thursday at 12,820.90, up 88.51 points or 0.70 percent. The index touched an intraday high of 12,820.90 and a low of 12,725.98.

The Financial Index added 0.68 percent, with Bank of Nova Scotia (BNS.TO) gaining 1.37 percent, Manulife Financial Corp. (MFC.TO) up 0.72 percent, and Bank of Montreal (BMO.TO) moved up 0.69 percent,

In corporate news among financial stocks, Royal Bank (RY.TO) gathered 0.85 percent after reporting improved first-quarter net income of C$2.045 billion or C$1.36 per share compared to C$1.830 billion or C$1.22 per share in the same quarter last year. Analysts expected the bank to report earnings of C$1.31 per share for the quarter.

Canadian Imperial Bank Of Commerce (CM.TO) shed 0.88 percent after reporting a lower first-quarter profit of C$796 million or C$1.91 per share compared with C$832 million or C$1.93 per share for the same quarter last year. Excluding items, adjusted earnings per share were C$2.15, compared with adjusted earnings per share of C$1.97 a year ago. Analysts expected the bank to report earnings of C$2.08 per share for the quarter.

Toronto-Dominion Bank (TD.TO) gained 0.66 percent after posting higher first-quarter net income of C$1.79 billion or C$1.86 per share compared with last year's C$1.48 billion or C$1.55 per share. Adjusted net income for the period was C$1.92 billion or C$2.00 per share. Analysts expected earnings per share of C$1.92 for the quarter.

The Capped Materials Index shed 0.32 percent, although Potash Corporation of Saskatchewan Inc.(POT.TO) gained 1.67 percent.

The Global Gold Index shed 1.36 percent, with gold futures for April delivery dropping $17.60 or 1.1 percent to close at $1,578.10 an ounce Thursday on the Nymex.

Among gold stocks, B2Gold Corp. (BTO.TO) shed 1.58 percent, Goldcorp. Inc. (G.TO) shed 0.71 percent, Kinross Gold Corp. (K.TO) dropped 2.79 percent, and Barrick Gold Corp. (ABX.TO) slipped 1.14 percent. Yamana Gold Inc. (YRI.TO) dropped 1.43 percent, while Eldorado Gold Corp. (ELD.TO) lost 0.88 percent.

The Diversified Metals & Mining Index edged up 0.02 percent, with Teck Resources Limited (TCK.B.TO) up 0.03 percent, Osisko Mining Corp. (OSK.TO) down 1.00 percent, and First Quantum Minerals Ltd. (FM.TO) shed 0.31 percent. Lundin Mining Corp.(LUN.TO) surrendered 0.43 percent.

The Energy Index moved up 1.12 percent, although U.S. crude oil futures for April delivery dropped $0.71 or 0.8 percent, to close at $92.76 a barrel Thursday on the Nymex.

Among energy stocks, Suncor Energy (SU.TO) gained 0.64 percent, Canadian Natural Resources Limited (CNQ.TO) was up 1.74 percent, and Husky Energy Inc. (HSE.TO) gathered 0.67 percent. Talisman Energy Inc.(TLM.TO) gained 2.05 percent, while Encana Corp. (ECA.TO) slipped 0.64 percent.

The Information Technology Index gathered 1.80 percent, with BlackBerry Inc. (BB.TO) up 2.95 percent.

The Capped Industrials Index gained 1.20 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 0.97 percent.

Information solutions provider MacDonald Dettwiler (MDA.TO) gained 4.04 percent after reporting fourth-quarter net earnings of C$12.6 million or C$0.40 per share compared with C$29 million or C$0.91 per share last year. Excluding items, operating earnings for the quarter totaled C$40.6 million or C$1.27 per share, compared with C$31 million or C$0.97 per share a year ago. Analyst estimated earnings of C$1.14 per share

In economic news, Statistics Canada said the nation's current account deficit, on a seasonally adjusted basis, decreased $0.8 billion to $17.3 billion in the fourth quarter. However, the reduction to the goods deficit was partially offset by the increase of the investment income deficit.

Separately, the agency said the Industrial Product Price Index remained at the same level in January as in December. Lower prices for chemical products largely offset gains elsewhere, including an advance in petroleum and coal products. Meanwhile, the Raw Materials Price Index rebounded with a 3.8 percent gain, mostly because of higher prices for crude oil.

In economic news from the U.S., a Commerce Department report on Thursday showed the country's GDP increased at an annual rate of 0.1 percent in the fourth quarter compared to the 0.1 percent drop that was originally reported. Economists had been expecting a more substantial upward revision, with the consensus estimate for the revised report to show 0.5 percent growth.

Separately, the U.S. Labor Department said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000. Economists expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.

Chicago-area business activity unexpectedly increased at a faster rate in February, a report from the Institute for Supply Management - Chicago showed Thursday. The business barometer, at its highest in almost a year, rose to 56.8 in February from 55.6 in January, with a reading above 50 indicating an increase in business activity. Economists expected the barometer to edge down to 55.0.

Elsewhere, inflation in the euro area, as per the harmonized index of consumer prices, weakened in January as estimated earlier, final data from statistical office Eurostat showed. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in January, after rising 2.2 percent in December. The latest figure matched preliminary estimates.

German unemployment declined unexpectedly by 3,000 in February from the prior month, the Federal Labor Agency said. However, the jobless rate held steady at 6.9 percent in February, above the consensus forecast to 6.8 percent.

Germany's EU harmonized inflation slowed less than economists expected in February, latest data showed. Inflation as per the harmonized index of consumer prices dropped to 1.8 percent in February from 1.9 percent in January, preliminary data from the Federal Statistical Office showed. Economists had forecast a faster deceleration to 1.7 percent.

by RTTNews Staff Writer

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