I think that there are two ways of reading this passage:
(1) Each living being was created ex nihilo
(2) Everything in the world was created ex nihilo.
#1 can’t be right, because it wouldn’t just undermine theistic evolution, it would undermine procreation. You’re not created ex nihilo, you’re formed from your parents’ DNA, infused with a soul from God. I think that regardless of one’s view on evolution, the correlation between sex and babies is pretty solidly established.
#2 is the view that I take, and it doesn’t contradict evolution at all. It just means that God is the origin of all life, physical and material, and of all matter. I think you could actually say much more than this passage is saying, and still not say anything contrary to evolution.
For example, you could say that God personally creates each of us, which is exactly what Psalm 139:13 says. Yet, the fact that God knitted our DNA in our mothers’ womb doesn’t mean we were created ex nihilo.
I think an intelligent Catholic stance on evolution would be one which kept a firm view of God in the picture. I understand that the Virgin Birth and the creation of Adam from mud and Eve from Adam are miraculous and show direct signs of God’s creative involvement. I just think we shouldn’t let that distract us from the miraculous involvement He shows in creating each of us, and fashioning us with souls. Material evolution doesn’t (or shouldn’t) mean that God is out of the Creation picture, any more than physical procreation does. Does any of that make sense? Sorry if it was long-winded.
Merry Christmas, by the way!