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Canadian Stocks Lower On China Slowdown -- Canadian Commentary


(RTTNews.com) - Canadian stocks are lower Monday morning, weighed down by a weak reading on Chinese manufacturing activity in April.

Worries about the unrest in Eastern Ukraine and likelihood of more sanctions on Russia from the U.S. are also contributing to the market's decline.

Energy, mining, industrial and financial stocks are weak. Despite slightly higher bullion prices, interest in gold stocks is somewhat subdued.

The benchmark S&P/TSX Composite Index is down 65.99 points or 0.44 percent at 14,699.16.

On Friday, the index closed up 101.08 points or 0.69 percent at 14,765.15.

In corporate news, HudBay Minerals Inc. (HBM.TO) has announced that it has extended its offer to acquire all of the outstanding common shares of Augusta Resource Corp., and that the offer will be open for acceptance until 5:00 p.m. on May 16, 2014. The stock is down more than 1 percent.

Alaris Royalty Corp (AD.TO) is advancing 2.3 percent on reporting revenue of $ 0.55 per share for the first quarter, up 25 percent from $0.44 per share, for the same period last year.

Ritchie Bros Auctioneers Inc (RBA.TO) is down more than 4 percent. The company reported net earnings of $14.3 million, or $0.13 per diluted share for the first quarter, up 2 percent from net earnings of $14.0 million, or $0.13 per diluted share, in the same quarter last year.

Nordion Inc (NDN.TO) shares are up nearly 7 percent after the company said its shareholders will receive $12.25 a share, up from $11.75, under the previously announced takeover by Sterigenics.

WestJet (WJA.TO) reported that its April Revenue passenger miles (RPMs), or traffic, increased 6.5 percent year-over-year to 1.774 billion, from 1.666 billion. Capacity, measured in available seat miles, grew 7.1 percent to 2.155 billions from 2.013 billions. The stock is up more than 1 percent.

Tuckamore Capital Management Inc. (TX.TO) shares are up 19 percent, after the company agreed to be acquired by senior management and Birch Hill Equity Partners for 75 Canadian cents a share.

PNI Digital Media (PN.TO) shares are up as much as 33 percent following Staples Inc. (SPLS.US) reaching an agreement to acquire the company for C$1.70 per share in cash, a hefty 31.8 percent premium to the stock's closing price last Friday.

CGI Group Inc. (GIB.A.TO) announced that it has received a contract from Desjardins Group. As per the contract, CGI will support Desjardins by performing work to adapt systems and convert data in areas related to vehicle and home insurance.

Methanex Corp (MX.TO) is modestly lower. The company announced on Friday that it reached a settlement agreement with Argentina'sTotal Austral SA related to the latter company's natural gas delivery obligation under a supply agreement between the two companies.

In the energy sector, Twin Butte Energy Ltd. (TBE.TO) is down more than 2 percent and Ithaca Energy is losing over 4 percent.

Bellatrix Exploration Ltd. (BXE.TO), DeeThree Exploration Ltd. (DTX.TO), Encana Corporation (ECA.TO), Cenovus Energy Inc. (CVE.TO), Imperial Oil Limited (IMO:TO), Canadian Oil Sands Limited (COS.TO), Husky Energy Inc. (HSE.TO) and ARC Resources Ltd. (ARX.TO) are down 1 to 2 percent.

In the materials space, Teck Resources Limited (TCK.B.TO), Turquoise Hill Resources Ltd. (TRQ.TO), Lundin Mining Corporation (LUN.TO) and Nevsun Resources Ltd. (NSU.TO) are down in negative territory, losing 1 to 2.5 percent.

Among gold stocks, Barrick Gold Corporation (ABX.TO), B2Gold Corp. (BTO.TO) and Detour Gold Corporation (DGC.TO) are up 1 to 1.6 percent, while Osisko Mining Corporation (OSK.TO) and Goldcorp Inc. (G.TO) are up marginally.

Among healthcare stocks, Catamaran Corporation (CCT.TO) is lower by over 1 percent, while Extendicare Inc. (EXE.TO) and Valeant Pharmaceuticals International, Inc. (VRX.TO) are down 0.5 percent and 0.7 percent, respectively.

Industrial stocks Canadian Pacific Railway Limited (CP.TO), SNC-Lavalin Group Inc. (SNC.TO), Bombardier Inc. (BBD.B.TO), CAE Inc. (CAE.TO) and MacDonald, Dettwiler and Associates Ltd. (MDA.TO) are down 1 to 2.2 percent.

The big six banks are down 0.3 to 0.7 percent.

In the consumer staples space, Alimentation Couche-Tard Inc. (ATD.B.TO), Saputo Inc. (SAP.TO) and Maple Leaf Foods Inc. (MFI.TO) are down 1 to 2 percent, while Jean Coutu Group (PJC) Inc. (PJC.A.TO) is plunging more than 5 percent.

In commodities, crude oil prices are down marginally amid speculation about a likely fall in Chinese demand for oil. Crude oil futures for June delivery are down $0.06 or 0.16 percent at $99.60 a barrel, after having advanced to $100.43 a barrel earlier.

Natural gas for June is up $0.037 or 0.80 percent at $4.712 per million btu.

Gold prices are modestly higher, extending previous session's gains as investors continue to seek the safe-haven investment amid mounting tensions between Russia and Ukraine.

Gold futures for June are up $8.00 or 0.61 percent at $1,310.90 an ounce.

Silver for July is up $0.041 or 0.21 percent at $19.587 an ounce. Meanwhile, copper is down $0.010 or 0.33 percent at $3.060 per pound.

In the currency market, the Canadian loonie is trading at 1.0963 against the U.S. dollar, up 0.09 percent from previous close.

In economic news from the U.S., a report the Institute for Supply Management showed that the U.S. service sector expanded at a faster than expected rate in April, rising to 55.2, from 53.1 in March.

Economists had been expecting the index to show a more modest increase to a reading of 54.2.

Investors will be looking ahead to the speeches by several central bank officials, including Fed Chair Janet Yellen this week.

The weekly U.S. jobless claims report and the U.S. Commerce Department's preliminary reports on first quarter productivity and costs will also be eyed, besides the official crude inventory data from the U.S. Energy Information Administration.

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