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Canadian Stocks Are Extending Recent Weakness - Canadian Commentary

The Canadian stock market is declining again Wednesday morning. Trade tensions continue to weigh on investor sentiment, as well as rising bond yields. As yields rise, riskier investments like equities become less attractive. Commodity prices are also struggling in early trade.

Markets in Europe are declining Wednesday, as investors worry about slowing Chinese growth and watched developments around Brexit and Italy's budget.

Markets on Wall Street are falling in early trade Wednesday. The sell-off on Wall Street comes as treasury yields moved higher following the release of the Labor Department's report on producer prices, adding to recent concerns about the outlook for interest rates.

The benchmark S&P/TSX Composite Index is down 209.65 points or 1.32 percent at 15,644.40.

On Tuesday, the index closed down by 92.12 points or 0.58 percent, at 15,854.05. The index scaled an intraday high of 15,917.82 and a low of 15,853.87.

The Capped Information Technology Index is losing 2.58 percent. BlackBerry (BB.TO) is falling 3.64 percent and Sierra Wireless (SW.TO) is dropping 2.16 percent. Constellation Software (CSU.TO) is weakening by 1.53 percent and Descartes Systems Group (DSG.TO) is declining 3.31 percent.

The Capped Industrials Index is down 2.57 percent. Air Canada (AC.TO) is declining 2.99 percent and WestJet Airlines (WJA.TO) is lower by 5.85 percent. Canadian Pacific Railway (CP.TO) is falling 3.49 percent and Canadian National Railway (CNR.TO) is losing 2.66 percent. Finning International (FTT.TO) is surrendering 2.56 percent.

The Energy Index is falling 1.99 percent. Cenovus Energy (CVE.TO) is weakening by 3.97 percent and Suncor Energy (SU.TO) is losing 1.37 percent. Encana (ECA.TO) is down 3 percent and Crescent Point Energy (CPG.TO) is declining 4.30 percent. Canadian Natural Resources (CNQ.TO) is dropping 1.71 percent and Husky Energy (HSE.TO) is decreasing 1.95 percent. Imperial Oil (IMO.TO) is surrendering 0.79 percent and Enbridge (ENB.TO) is lower by 0.85 percent.

The Capped Materials Index is down 1.54 percent. Agnico Eagle Mines (AEM.TO) is losing 1.08 percent and Franco-Nevada (FNV.TO) is weakening by 1.12 percent. Nutrien (NTR.TO) is falling 1.33 percent.

The Gold Index is decreasing 0.84 percent. Kinross Gold (K.TO) is lower by 1.41 percent and Goldcorp (G.TO) is losing 0.78 percent. IAMGOLD (IMG.TO) is down 2.31 percent and B2Gold (BTO.TO) is surrendering 0.64 percent. Barrick Gold (ABX.TO) is declining 1.16 percent. Eldorado Gold (ELD.TO) is falling 0.87 percent and Yamana Gold (YRI.TO) is dropping 1.25 percent.

The heavyweight Financial Index is decreasing 0.54 percent. Bank of Montreal (BMO.TO) is lower by 0.35 percent and Bank of Nova Scotia (BNS.TO) is losing 0.01 percent. Royal Bank of Canada (RY.TO) is weakening by 0.45 and Canadian Imperial Bank of Commerce (CM.TO) is down 0.23 percent. Toronto-Dominion Bank (TD.TO) is surrendering 0.48 percent.

Parkland Fuel Corporation (PKI.TO) and SOL Limited have entered into an agreement to complete a business combination between Parkland and SOL Investments Limited and its subsidiaries. SOL is the largest independent fuel marketer in the Caribbean and a wholly-owned subsidiary of SOL Limited. Shares of Parkland are surging 6.73 percent.

International Petroleum Corp. and BlackPearl Resources Inc. (PXX.TO) announced that they have entered into an agreement to acquire all of the shares of BlackPearl based upon a share exchange ratio of 0.22 shares of IPC for each BlackPearl share. BlackPearl is rising 10 percent.

On the economic front, a report from Statistics Canada this morning showed that Canadian building permits rose 0.4 percent in August.

France's industrial production grew at the slowest pace in three months in August, the statistical office Insee showed Wednesday. Industrial production climbed 0.3 percent from July, the weakest since May when it remained flat. Production had increased 0.8 percent in July.

The UK economy stagnated in August as the increase in industrial production was offset by a contraction in construction and farm sectors, the Office for National Statistics reported Wednesday. Gross domestic product remained unchanged after expanding 0.4 percent in July. GDP was forecast to climb 0.2 percent.

The UK's merchandise trade deficit widened in August from the previous month and was bigger than economists expected, preliminary data from the Office for National Statistics showed on Wednesday. The visible trade deficit widened to GBP 11.19 billion from GBP 10.38 billion in July. Economists had expected a shortfall of GBP 10.8 billion.

With an increase in prices for services offsetting a modest drop in prices for goods, the Labor Department released a report on Wednesday showing producer prices in the U.S. rose in line with economist estimates in the month of September.

The Labor Department said its producer price index for final demand increased by 0.2 percent in September after edging down by 0.1 percent in August. Economists had expected prices to rise by 0.2 percent.

A report released by the Commerce Department on Wednesday showed a bigger than expected increase in wholesale inventories in the U.S. in the month of August. The Commerce Department said wholesale inventories jumped by 1.0 percent in August after rising by 0.6 percent in July. Economists had expected wholesale inventories to climb by 0.8 percent.

In commodities, crude oil futures for November delivery are down 0.85 or 1.13 percent at $74.11 a barrel.

Natural gas for November is up 0.038 or 1.16 percent at $3.304 per million btu.

Gold futures for December are down 0.20 or 0.02 percent at $1,191.30 an ounce.

Silver for December is down 0.08 or 0.56 percent at $14.32 an ounce.

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