News Column

Canadian Stocks In Limbo Ahead Of Fed Rate Call -- Canadian Commentary

April 30, 2014

WASHINGTON (Alliance News) - Canadian stocks are little changed Wednesday morning with investors digesting a slew of economic and earnings reports.

While positive U.S private sector employment data and some upbeat results from Canadian companies are aiding sentiment, data showing a slower than expected pace of first quarter US GDP growth appears to be forcing investors to tread cautiously.

Weaker commodity prices are weighing on the market. Also, investors appear a bit wary of making significant moves ahead of the US Federal Reserve's monetary policy statement due at 2 pm ET.

Economists widely expect the Fed to leave the rates unchanged at 0-0.25% and announce a USD10 billion taper to its bond purchase program.

Energy and gold stocks are weak, tracking lower crude oil and bullion prices.

The benchmark S&P/TSX Composite Index is down 3.40 points or 0.02% at 14,579.71.

On Tuesday, the index ended up 52.20 points or 0.36% at 14,583.11, after scaling a high of 14,613.03 intraday.

In corporate news, Thomson Reuters Corp. (TRI.TO) shares are up more than 2%, after the company reported first-quarter earnings to shareholders of USD282 million or USD0.34 per share, compared to a loss of USD31 million or USD0.04 per share, previous year.

CGI Group Inc. (GIB-A.TO) is rising over 4% after its second-quarter net earnings increased to CAD230.9 million or CAD0.73 per share, from CAD114.2 million or CAD0.36 per share, a year ago.

Barrick Gold Corp. (ABX.TO) reported adjusted net earnings of USD238 million or USD0.20 per share for the first quarter, compared to USD923 million or USD0.92 per share in the prior year. The stock is down marginally.

Canfor Pulp Products Inc (CFX.TO) shares are up 5.5% following the company reporting net income of USD25.7 million, or USD0.36 per share, for the first quarter, compared to USD10.9 million, or USD0.15 per share, for the first quarter of 2013.

Cenovus Energy Inc (CVE.T) is down 1.2% despite a surge in earnings. Cenovus reported a net profit of CAD247 million, or 33 Canadian cents per share, in the quarter ended March 31, up 44% from the same period last year.

Jean Coutu Group Inc (PJC.A.TO) reported a net profit of USD0.30 per share for the fourth quarter, compared to USD0.25 for the same period of the previous fiscal year. The stock is modestly lower.

Loblaw Companies Limited (L.TO) is higher by about 1.5% after it said adjusted net earnings per common share rose 2.1% to USD0.49 for the first quarter.

Sherritt International Corporation (S.TO) is up more than 1% despite posting a first-quarter loss of USD48.2 million or USD0.16 per share, compared to earnings of USD23.1 million or USD0.08 per share last year.

In the energy space, Long Run Exploration Ltd. (LRE.TO) is down nearly 3%. TORC Oil & Gas Ltd. (TOG.TO) is down 2%.

Suncor Energy Inc. (SU.TO), Canadian Natural Resources Limited (CNQ.TO), Encana Corporation (ECA.TO) and ARC Resources Ltd. (ARX.TO) are lower by 0.6 to 1.8%.

Among gold stocks, Yamana Gold Inc. (YRI.TO) is down 2% and Eldorado Gold Corporation (ELD.TO) is declining 1.5%. Detour Gold Corporation (DGC.TO) and Osisko Mining Corporation (OSK.TO) are losing about 1%, while New Gold Inc. (NGD.TO) is down 0.8%.

Healthcare stock Catamaran Corporation (CCT.TO) is down 1.3%. Meanwhile, Valeant Pharmaceuticals International, Inc. (VRX.TO) and Extendicare Inc. (EXE.TO) are little changed from their last closing levels.

Among big six banks, Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO) and Canadian Imperial Bank Of Commerce (CM.TO) are up 0.3 to 0.6%.

In the industrial space, Canadian National Railway Company (CNR.TO), Canadian Pacific Railway Limited (CP.TO), SNC-Lavalin Group Inc. (SNC.TO) and Bombardier Inc. (BBD.B.TO) are higher by 0.8 to 2%, while MacDonald, Dettwiler and Associates Ltd. (MDA.TO) is losing about 1.2%.

In commodities, crude oil futures for June are down USD1.79 or 1.77% at USD99.49 a barrel.

According to the data released by the US Energy Information Administration crude stockpiles rose by lower than expected 1.7 million barrels to 399.4 million barrels for the week ended April 25.

Gasoline supplies climbed by 1.6 million barrels, while distillate stockpiles added 1.9 million barrels, the report from EIA showed.

Natual gas for June is down USD0.074 or 1.54% at USD4.757 per million btu.

Gold futures for June are down USD8.00 or 0.62% at USD1,288.30 an ounce.

Silver for July is down USD0.423 or 2.17% at USD19.115 an ounce. Meanwhile, copper is down USD0.034 or 1.10% at USD3.039 per pound.

In the currency market, the Canadian loonie is trading at 1.0970 against the US dollar, down 0.23% from previous close.

On the economic front, Statistics Canada said, the Canadian economy grew by 0.2% in February.

In economic news from the US, ADP said private sector employment surged up by 220,000 jobs in April following an upwardly revised jump of 209,000 jobs in March. Economists had expected an increase of about 210,000 jobs compared to the addition of 191,000 jobs originally reported for the previous month.

The US Commerce Department's report showed gross domestic product inched up by just 0.1% in the first quarter of 2014 compared to the 2.6% increase in GDP in the fourth quarter of 2013. While economists had anticipated a notable slowdown in the pace of GDP growth, they still expected an increase of about 1.2%.

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Source: Alliance News

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