Falling commodity stocks drag TSX to two-week lows

By Nikhil Sharma

(Reuters) -Canada's main stock index on Thursday fell to its lowest in two weeks, led by precious metal miners as gold and silver prices weakened, while investors digested a host of corporate earnings and U.S. economic data.

At 10:18 a.m. ET (1418 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 124.64 points, or 0.55%, at 22,515.87, to its lowest level since July 11.

An index of Canadian gold miners dropped 3.1% and the materials index fell 2.2%, as gold prices touched a two-week low after data showed the world's largest economy expanded faster than expected and inflation slowed in the second quarter. [GOL/]

Silver prices also skidded, while copper dipped below $9,000 per metric ton for the first time since April. [MET/L]

U.S. gross domestic product (GDP) grew faster than expected to a 2.8% annualized rate in the second quarter, but inflation subsided, leaving intact expectations for a September rate cut by the Federal Reserve.

"The narrative we've heard in recent days and weeks about a cooling U.S., seems like it's quite the opposite based on the GDP numbers", said Douglas Porter, chief economist at BMO Capital Markets.

"It's certainly a surprise that the economy was as strong as it was in the second quarter."

Separately, U.S. weekly jobless claims fell lower than expected in the week ended July 20, while unemployment rate rose to a two-and-half year high of 4.1% in June.

The Bank of Canada (BoC) on Wednesday lowered its interest rates by 25 basis points and indicated chances of more cuts if inflation continues to ease in line with forecasts. The central bank also reduced its 2024 economic growth outlook.

Among single stocks, Loblaw Companies dropped 1.5% after the retailer missed estimates for second-quarter revenue, hurt by soft demand for some household items and non-essential products such as apparel.

Mullen Group jumped 8% to the top of TSX index, after logistics provider's earnings beat estimates.

(Reporting by Nikhil Sharma in Bengaluru; Editing by Shailesh Kuber)