TSX Ends Higher On Mixed Economic Data -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a fourth straight session Wednesday, on some mixed global economic data with both the U.S. and China showing a better than expected uptick in non-manufacturing activity in May.

Investors also look ahead to the European Central Bank's policy announcement, due Thursday. It is widely expected that the bank will offer stimulus to spur inflation and jump-start the region's sluggish economy.

Canada recorded an unexpected trade deficit in April, with the U.S. also showing a deficit for the same period. U.S. service sector survey showed the index of activity rose more than anticipated in May, while China's non-manufacturing sector also expanded at its fastest for the year in May.

Meanwhile, the Bank of Canada kept its policy rate unchanged at 1 percent, as was widely expected.

The S&P/TSX Composite Index closed Tuesday at 14,796.79, up 62.10 points or 0.42 percent. The index scaled an intraday high of 14,805.96 and a low of 14,670.03.

On Tuesday, the Index closed up higher on some positive economic news from the U.S. notwithstanding a contraction in China's manufacturing activity.

The Financial Index gained 0.64 percent with the Canadian Imperial Bank of Commerce (CM.TO) up 0.61 percent, Bank of Montreal (BMO.TO) up 0.47 percent, National Bank of Canada (NA.TO) added 0.48 percent, Toronto-Dominion Bank (TD.TO) gathered 0.64 percent, and Bank of Nova Scotia (BNS.TO) gained 0.41 percent.

Royal Bank of Canada (RY.TO) added 0.46 percent, while Manulife Financial Corp. (MFC.TO) gained 0.93 percent.

The Capped Healthcare Index dropped 0.82 percent with Catamaran Corp. (CCT.TO) up 0.66 percent and Extendicare Inc. (EXE.TO) down 0.94 percent. Valeant Pharmaceuticals International Inc. (VRX.TO) dropped 2.15 percent.

Crude oil ended lower after the official weekly crude inventory data from the Energy Information Administration showed stockpiles to have declined much more than anticipated and the dollar trending lower following some mixed global economic data.

The U.S. Energy Information Administration said U.S. crude oil inventories declined 3.4 million barrels in the week ended May 30, with analysts anticipating a drop of 2.0 million barrels.

Gasoline stocks rose by 0.2 million barrels last week, while analysts anticipated a jump of 2.0 million barrels. Inventories of distillate, including heating fuel, jumped 2.0 million barrels, with analysts anticipating a decrease of 1.0 million barrels.

The Energy Index added 0.63 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, edging down $0.02 to close at $102.64 a barrel Wednesday on the Nymex.

Among other energy stocks, Encana Corp. (ECA.TO) gained 0.39 percent, while Husky Energy Inc. (HSE.TO) slipped 0.08 percent.

Canadian Natural Resources Ltd. (CNQ.TO) rose 0.80 percent, while Talisman Energy Inc. (TLM.TO) down 0.53 percent. Enbridge Inc. (ENB.TO) dropped 0.19 percent, Pacific Rubiales Energy Corp. (PRE.TO) up 1.22 percent, Cenovus Energy Inc. (CVE.TO) added 0.15 percent, and Suncor Energy Inc. (SU.TO) advanced 0.78 percent.

Gold futures ended lower ahead of the monthly U.S. jobs data and the European Central Bank policy meet, with investors digesting some positive economic data from the U.S. and China

The Global Gold Index moved up 0.18 percent, with gold futures for August delivery dipping $0.20 to close at $1,244.30 an ounce Wednesday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) slipped 1.23 percent, Osisko Mining Corp. (OSK.TO) added 0.62 percent, Barrick Gold Corp. (ABX.TO) shed 0.23 percent, and Agnico Eagle Mines Limited (AEM.TO) dropped 0.15 percent.

The Capped Materials Index gained 0.09 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) edging up 0.03 percent.

The Diversified Metals & Mining Index dropped 0.27 percent, with Lundin Mining Corp. (LUN.TO) down 1.02 percent, First Quantum Minerals Ltd. (FM.TO) down 1.91 percent, and Teck Resources Limited (TCK.B.TO) down 1.49 percent.

The Information Technology Index gained 1.01 percent, with BlackBerry Limited (BB.TO) adding 3.19 percent, Constellation Software Inc (CSU.TO) down 0.28 percent, Celestica Inc. (CLS.TO) up 1.03 percent, and Avigilon Corp. (AVO.TO) advancing 2.60 percent.

The Capped Industrials Index added 0.87 percent, with Bombardier Inc. (BBD.B.TO) down 0.27 percent and Air Canada (AC.B) up 3.59 percent.

TransCanada Corp. (TRP.TO) dipped 0.44 percent after indicating that its unit NOVA Gas Transmission Ltd. has signed agreements with Chevron Canada Ltd.(CVX) and Apache Canada Ltd. for nearly 1.9 billion cubic feet per day of firm natural gas transportation services to strengthen the development of a major extension of TransCanada's NGTL System.

DragonWave Inc. (DWI.TO) shares jumped 16.42 percent after the company raised its revenue expectations for the first quarter by over 60 percent from the fourth quarter.

Westjet Airlines Ltd. (WJA.TO) gained 1.45 percent after reporting a 4.8 percent increase in traffic during May 2014, on a capacity increase of 4.1%.

Mandalay Resources Corp. (MND.TO) dropped 1.11 percent after indicating it would acquire Elgin Mining Inc. (ELG.TO) for a total value of C$70 million, to get hold of Eligin's Bjorkdal gold mine in Sweden. Elgin Mining Inc. shares soared 62.50 percent.

On the economic front, Canadian exports stood at C$42.83 billion in May, down from a revised C$43.63 billion in the previous month. Meanwhile, imports were up in April, coming in at $43.46 billion, compared to a revised C$42.86 billion in April. Trade deficit at C$638 million follows a revised surplus of C$766 million in March, according to Statistics Canada.

In economic news, a report from payroll processor ADP on Wednesday showed the pace of job growth slowed by more than expected in May, after having reported a strong post-winter rebound in U.S. private sector employment in April. Private sector employment rose by 179,000 jobs in May following a downwardly revised increase of 215,000 jobs in April. Economists expected an increase of about 210,000 jobs compared to the addition of 220,000 jobs originally reported for the previous month.

The Institute for Supply Management's non-manufacturing index for the U.S. climbed to 56.3 in May from 55.2 in April, with a reading above 50 indicating growth in the service sector. Economists expected the index to show a modest increase to a reading of 55.5. This is the highest level of the the non-manufacturing index since reaching 57.9 in August 2013.

Labor productivity in the U.S. fell much more than previously estimated in the first quarter, with rough winter weather negatively impacting output, a report from the Labor Department showed Wednesday. Productivity tumbled by a revised 3.2 percent in the first quarter compared to the previously reported 1.7 percent drop. Economists expected productivity to fall by a revised 2.9 percent.

A Commerce Department report on Wednesday showed the U.S. trade deficit to have widened much more than expected in April, reflecting a drop in the value of exports and an increase in the value of imports. U.S. trade deficit widened to $47.2 billion in April from a revised $44.2 billion in March. Economists expected the deficit to edge up to $41.0 billion from the $40.4 billion originally reported for the previous month. This is the biggest U.S. trade deficit since the $47.8 billion deficit recorded in April 2012.

A report from Eurostat showed gross domestic product in the 18-nation currency bloc eurozone grew 0.2 percent sequentially, slower than the revised 0.3 percent expansion posted in the fourth quarter of 2013. Nonetheless, the slowdown in first quarter growth and signals of weaker recovery in the quarter-ahead, amid falling producer prices, boosted hopes of policy action from the European Central Bank as early as tomorrow.

The non-manufacturing Purchasing Managers' Index for China climbed to 55.5 in May from 54.8 in April, a report from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed Wednesday.