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Canadian Stocks Are Paring Early Gains - Canadian Commentary

The Canadian stock market got off to a positive start Friday, but has since come off its early highs. Gold and energy stocks are climbing this morning, as commodity prices rise. However, the weak performance of the healthcare and financial stocks is limiting the market's upside.

Markets in Europe have recovered from early losses Friday and are now trading slightly to the upside. Eurozone short-dated bond yields hit five-week highs after ECB policymaker Ewald Nowotny signaled that the European Central Bank could hike its deposit rate, currently below zero, before or after it ends its bond-buying stimulus program.

Markets in the United States are basically flat in early trade Friday. Investors appear to be taking a bit of a breather at the end of an eventful week. A meeting of G20 finance ministers and central bank governors being held in Germany over the next two days may also keep some traders on the sidelines.

The benchmark S&P/TSX Composite Index is up 24.82 points or 0.16 percent at 15,587.23.

On Thursday, the index closed up 41.50 points or 0.27 percent, at 15,562.41. The index scaled an intraday high of 15,607.12 and a low of 15,556.56.

The Capped Telecommunication Services Index is up 0.74 percent. BCE (BCE.TO) is rising 1.02 percent and Manitoba Telecom Services (MBT.TO) is advancing 0.61 percent. TELUS (T.TO) is climbing 0.30 percent and Rogers Communication (RCI-B.TO) is adding 1.04 percent.

The Gold Index is advancing 0.65 percent. Gold prices are up slightly Friday morning, preserving yesterday's strong gains in the wake of the surprisingly sanguine Federal Reserve statement.

Goldcorp (G.TO) is rising 0.34 percent and Barrick Gold (ABX.TO) is gaining 0.95 percent. IAMGOLD (IMG.TO) is climbing 1.74 percent and Eldorado Gold (ELD.TO) is adding 0.12 percent. Yamana Gold (YRI.TO) is increasing 0.40 percent.

The Capped Materials Index is also up 0.47 percent. Franco-Nevada (FNV.TO) is rising 0.24 percent and Agnico Eagle Mines (AEM.TO) is climbing 0.82 percent. Agrium (AGU.TO) is higher by 0.65 percent and Potash Corp. of Saskatchewan (POT.TO) is gaining 0.91 percent.

The Energy Index is rising 0.44 percent. Crude oil prices are little changed Friday morning, holding just below $49 a barrel.

Husky Energy (HSE.TO) is climbing 1.41 percent and Encana (ECA.TO) is increasing 0.90 percent. Crescent Point Energy (CPG.TO) is advancing 0.14 percent and Suncor Energy (SU.TO) is gaining 0.66 percent. Canadian Natural Resources (CNQ.TO) is rising 0.37 percent and Imperial Oil (IMO.TO) is adding 0.07 percent.

The Capped Industrials Index is up 0.38 percent. Canadian National Railway (CNR.TO) is gaining 0.54 percent and Canadian Pacific Railway (CP.TO) is adding 0.11 percent. Finning International (FTT.TO) is also rising 1.02 percent.

The Capped Information Technology Index is gaining 0.20 percent. Constellation Software (CSU.TO) is rising 0.51 percent and Descartes Systems Group (DSG.TO) is climbing 0.59 percent.

The Capped Healthcare Index is lower by 0.55 percent. Extendicare (EXE.TO) is down 0.19 percent and Concordia International (CXR.TO) is falling 3.80 percent.

The heavyweight Financial Index is decreasing 0.12 percent. Toronto-Dominion Bank (TD.TO) is down 0.17 percent and Royal Bank of Canada (RY.TO) is slipping 0.09 percent. Bank of Nova Scotia (BNS.TO) is dipping 0.03 percent and Bank of Montreal (BMO.TO) is declining 0.08 percent.

Stella-Jones (SJ.TO) is rising 0.39 percent. The company reported fourth quarter EPS of C$0.27, compared to C$0.48 last year and increased its quarterly dividend by 10 percent.

Onex Corp. (OCX.TO) is falling 0.34 percent after it agreed to sell USI Insurance Services to an affiliate of KKR & Co. L.P. (KKR) and CDPQ for an enterprise value of US$4.3 billion.

On the economic front, Statistics Canada reported this morning that Canadian manufacturing sales unexpectedly increased by 0.6 percent in January. Economists had been expecting an decrease of 0.2 percent.

Eurozone's visible trade surplus eased more-than-expected in January from the previous month, as exports declined and imports increased, figures from Eurostat showed Friday. The seasonally adjusted trade surplus dropped to EUR 15.7 billion from EUR 23.1 billion in December. Economists had forecast EUR 22 billion surplus.

Eurozone construction output declined for the second straight month in January, data from Eurostat showed Friday. Construction output fell a seasonally adjusted 2.3 percent month-over-month in January, faster than the 0.6 percent drop in December, which was revised from a 0.2 percent decrease reported earlier.

With a steep drop in utilities output offsetting a jump in mining output, the Federal Reserve released a report on Friday showing that U.S. industrial production came in flat in the month of February. The Fed said industrial production was unchanged in February after edging down by a revised 0.1 percent in January.

Economists had expected production to rise by 0.2 percent compared to the 0.3 percent drop originally reported for the previous month.

After reporting a pullback in U.S. consumer sentiment in the previous month, the University of Michigan released a report on Friday showing that sentiment has rebounded by more than expected in March. The preliminary report showed that the consumer sentiment index rose to 97.6 in March after dropping to 96.3 in February. Economists had expected the index to rise to 97.0.

A report released by the Conference Board on Friday showed that its index of leading U.S. economic indicators climbed to its highest level in over a decade in February. The Conference Board said its leading economic index rose by 0.6 percent in February, matching the increases seen in the two previous months. The index had been expected to rise by 0.4 percent.

In commodities, crude oil futures for April delivery are up 0.08 or 0.16 percent at $48.83 a barrel.

Natural gas for April is up 0.028 or 0.96 percent at $2.93 per million btu.

Gold futures for April are up $3.50 or 0.29 percent at $1,230.60 an ounce.

Silver for May is up $0.04 or 0.23 percent at $17.37 an ounce.

by RTTNews Staff Writer

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