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Canadian Stocks Have Slipped Into Negative Territory - Canadian Commentary

The Canadian stock market got off to a positive start Thursday, but has since pared its gains and slipped into the red. The market finished little changed yesterday, after the Bank of Canada raised interest rates for the first time in seven years.

"Governing Council judges that the current outlook warrants today's withdrawal of some of the monetary policy stimulus in the economy. Future adjustments to the target for the overnight rate will be guided by incoming data as they inform the bank's inflation outlook, keeping in mind continued uncertainty and financial system vulnerabilities," the bank said in its statement.

Gold stocks are among the weakest performers this morning, while prices of the precious metal are only slightly lower. Telecommunication services and industrial stocks are also under pressure.

The majority of the European markets are up slightly Thursday, but are little changed overall. After the strong gains of the previous session, the markets are having difficulty advancing further. Wednesday's rally was driven by dovish comments from Federal Reserve Chair Janet Yellen.

Markets in the United States are little changed Thursday morning. Investors reacted positively to Federal Reserve Chair Janet Yellen's semiannual testimony before Congress yesterday. Yellen told Congress additional gradual rate hikes are likely to be appropriate over the next few years. The Fed Chief is continuing her testimony today before the Senate Banking Committee.

The benchmark S&P/TSX Composite Index is down 19.73 points or 0.13 percent at 15,124.26.

On Wednesday, the index closed down 5.15 points or 0.03 percent, at 15,143.99. The index scaled an intraday high of 15,297.04 and a low of 14,137.98.

The Gold Index is declining 1.19 percent. Gold prices are down slightly Thursday morning after Federal Reserve Chair Janet Yellen's dovish remarks to Congress yesterday.

B2Gold (BTO.TO) is losing 2.35 percent and Barrick Gold (ABX.TO) is declining 0.40 percent. Eldorado Gold (ELD.TO) is down 0.97 percent and Kinross Gold (K.TO) is weakening by 2.41 percent. IAMGOLD (IMG.TO) is falling 1.39 percent and Yamana Gold (YRI.TO) is surrendering 1.65 percent.

The Capped Materials Index is down 0.42 percent. Agnico Eagle Mines (AEM.TO) is weakening by 1.37 percent and Franco-Nevada (FNV.TO) is losing 0.32 percent.

The Capped Telecommunication Services Index is down 0.50 percent. Rogers Communications (RCI-B.TO) is losing 0.40 percent and BCE (BCE.TO) is falling 0.33 percent. TELUS (T.TO) is also decreasing 0.69 percent.

The Capped Industrials Index is down 0.25 percent. Canadian National Railway (CNR.TO) is lower by 0.07 percent and Bombardier (BBD-B.TO) is declining 0.64 percent. Finning International (FTT.TO) is falling 0.44 percent and Air Canada (AC.TO) is weakening by 1.01 percent.

WestJet Airlines (WJA.TO) is rising 0.48 percent after it reported a June load factor of 82.9 percent.

The Capped Healthcare Index is higher by 0.20 percent. Extendicare (EXE.TO) is gaining 0.90 percent and Valeant Pharmaceuticals International (VRX.TO) is climbing 1.39 percent. Concordia International (CXR.TO) is also climbing 5.37 percent.

The Capped Information Technology Index is gaining 0.10 percent. Descartes Systems (DSG.TO) is up 0.25 percent and Constellation Software (CSU.TO) is adding 0.11 percent.

The Energy Index is rising 0.18 percent. Crude oil prices are little changed Thursday morning, even after U.S. government data confirmed a sharp decline in domestic crude supplies for a second week in a row.

Suncor Energy (SU.TO) is gaining 0.27 percent and Encana (ECA.TO) is rising 0.77 percent.

Cenovus Energy (CVE.TO) is climbing 1.52 percent. The company has hired investment banks to sell the Weyburn and Palliser oil assets in hopes of getting $2.5 billion, Reuters reports.

The heavyweight Financial Index is increasing 0.06 percent. National Bank of Canada (NA.TO) is advancing 0.14 percent and Canadian Imperial Bank of Commerce (CM.TO) is climbing 0.45 percent and Bank of Montreal (BMO.TO) is adding 0.27 percent.

Sears Canada Inc. (SCC.TO) majority shareholders including Edward Lampert, ESL Investments Inc. and Fairholme Capital Management LLC are "seeking access to internal documents related to its restructuring," according to Reuters. Shares are currently unchanged.

On the economic front, a report from Statistics Canada this morning showed that the Canadian house price index climbed 0.7 percent in May. Economists had been expecting an increase of only 0.3 percent.

China's exports grew more than expected in June on robust global demand, official data showed Thursday.

In dollar terms, exports increased 11.3 percent year-on-year in June, the General Administration of Customs said. Shipments were expected to gain 9 percent.

Likewise, imports logged an annual growth of 17.2 percent versus the expected growth of 14 percent.

Consequently, the trade surplus totaled $42.8 billion in June. The surplus was forecast to rise to $42.6 billion from $40.8 billion in May.

Germany's consumer price inflation increased as initially estimated in June, latest figures from Destatis showed Thursday. The consumer price index rose at a slightly faster pace of 1.6 percent year-over-year in June, following a 1.5 percent climb in May. That was in line with the flash data published on June 26.

France's inflation slowed as estimated in June, final results from the statistical office Insee showed Thursday. Consumer prices advanced 0.7 percent on a yearly basis, following a 0.8 percent rise in May.

The average asking price for a house in the United Kingdom dropped precipitously in June, the Royal Institution of Chartered Surveyors said on Thursday with an index score of +7. That was well shy of forecasts for a +15 and down sharply from +17 in May.

First-time claims for U.S. unemployment benefits saw a modest decrease in the week ended July 8th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims dipped to 247,000, a decrease of 3,000 from the previous week's revised level of 250,000.

Economists had expected jobless claims to edge down to 245,000 from the 248,000 originally reported for the previous week.

A report released by the Labor Department on Thursday showed a modest increase in U.S. producer prices in the month of June. The Labor Department said its producer price index for final demand inched up by 0.1 percent in June after coming in flat in May. Economists had expected prices to remain unchanged.

In commodities, crude oil futures for August delivery are up 0.28 or 0.62 percent at $45.77 a barrel.

Natural gas for August is down 0.006 or 0.20 percent at $2.979 per million btu.

Gold futures for August are down 1.79 or 0.15 percent at $1,217.30 an ounce.

Silver for September is down 0.102 or 0.64 percent at $15.785 an ounce.

by RTTNews Staff Writer

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