Canada's main stock index pulled back on Thursday as stronger-than-expected earnings from three of the country's biggest lenders early in the day failed to dispel market doubts about bank performance in the future.
The S&P/TSX composite index dipped 71.80 points to greet noon at 15,038.67
The Canadian dollar fell 0.26 cents to 80.05 cents U.S.
Among the three banks that reported on Thursday, Canadian Imperial Bank of Commerce also raised its dividend, joining two of Canada's Big Six banks that hiked their payouts earlier this week.
While increased dividends will help them win favor, the question for Canada's banks now is how they will deal with a higher interest rate environment
Among the Big Six, only Bank of Nova Scotia is left to report quarterly earnings, on Friday.
Of those that reported on Thursday, shares of Royal Bank of Canada were down 0.7% at $79.35, Toronto-Dominion Bank gave back 1.3% to $55.25, and Canadian Imperial Bank of Commerce slipped 0.7% to $94.38.
Oil prices steadied on Thursday after a two-day slide as investors awaited data from the U.S. Energy Information Administration (EIA) to see how U.S. oil production was responding to a recent surge in prices.
Among oil shares, Suncor Energy Inc slipped 0.6% to $36.12, while Canadian Natural Resources was up 0.2% at $38.02.
On the economic slate, Statistics Canada said its Industrial Product Price Index declined 0.9% in April, mainly because of lower prices for energy and petroleum products.
The agency’s Raw Materials Price Index increased 3.8% in the same month, largely as a result of higher prices for crude energy products.
Gross Domestic Product figures for March are due Friday.
ON BAYSTREET
The TSX Venture Exchange squeezed out a gain of 0.60 points to 690.02
All but three of the 14 Toronto subgroups were negative by noon, most notably industrials, off 1.4%, global base metals, floundering 1.2%, and the metals and mining sector, down 1%.
The three gainers were gold, up 0.4%, materials, up 0.04%, and real-estate, just a jot above breakeven.
ON WALLSTREET
U.S. stocks traded mostly lower on Wednesday as lack of resolution on Greece debt talks and a massive selloff in Shanghai stocks weighed on investor sentiment.
The Dow Jones Industrials dropped 78.11 points by noon to 18.084.88, with Caterpillar leading laggards and Intel the greatest advancer.
The S&P 500 index slumped 9.60 points to 2,113.88, with industrials and energy leading all sectors lower.
The NASDAQ retreated 20.53 points from Wednesday’s all-time high to 5,086.07
Companies reporting on Thursday include Abercrombie & Fitch.
Abercrombie lost 53 cents U.S. per share for its latest quarter, wider than the 34-cent U.S. consensus estimate. Revenue missed forecasts amid an 8% drop in comparable store sales. The apparel retailer did say it sees sales improving, and that it will see continued headwinds from foreign currency fluctuations.
Avago Technologies will buy chip maker Broadcom for $37 billion U.S. in cash and stock, consisting of $54.50 U.S. in cash and 0.4378 Avago shares for each share of Broadcom.
Costco reported quarterly earnings of $1.17 U.S. per share, two cents above estimates, though revenue and comparable store sales were below forecasts. The warehouse retailer was hurt by lower gasoline prices and a stronger dollar.
Futures were little changed after weekly initial jobless claims came in at 282,000, up slightly from last week's 274,000 read.
Pending home sales rose 3.4% in April, to their highest levels in nine years.
In China, stocks plunged 6.5% on Thursday, with traders citing the tightening of marginal lending rules as an explanation. Despite the selloff, the Shanghai Composite is still up more than 40% year-to-date.
Meanwhile, U.S. officials were at the Group of Seven meeting of finance ministers and central bank chiefs in Dresden, Germany, on Thursday, which will continue until Friday. Greece is on the agenda, as well as reviving global growth.
Prices for 10-year U.S. Treasuries lost some strength, raising yields to 2.14% from Wednesday’s 2.13%. Treasury prices and yields move in opposite directions.
Oil prices dropped 26 cents a barrel to $57.25 U.S.
Gold prices regained $2.40 to $1,188.90 U.S. an ounce.
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