The Toronto stock market finished in the red Thursday, pressured by the financial sector as the latest batch of bank earnings disappointed, giving traders an excuse to take some more profits from a sector that has delivered solid returns all year.
The S&P/TSX composite index jettisoned 104.52 points to close Thursday at 13,200.40
The Canadian dollar regained 0.36 cents at 93.97 cents U.S.
Toronto-Dominion Bank shares fell $1.20 to $94.55 after it reported a quarterly profit of $1.622 billion, up from $1.597 billion a year ago. On an adjusted basis, TD earned $1.90 per share, up from $1.83 a year ago but nine cents less than analysts had expected.
The bank also raised its dividend by a penny to 86 cents a share and announced a two-for-one stock split.
Most of TD's major units showed increases but net income from wholesale banking fell by 61% to $122 million from a year earlier.
Meanwhile, Royal Bank of Canada had $2.119 billion of quarterly net income, up 11% from last year. Adjusted diluted earnings per share were $1.42, four cents higher than analysts had forecast.
But its shares fell 66 cents to $68.34 as Barclays analyst John Aiken pointed to both the wealth management and retail banking divisions as performing weaker than he expected.
RBC also announced that president and chief executive Gordon Nixon will retire next summer.
CIBC shares dropped $1.08 to $88.97 as it reported a profit of $836 million in net income in its latest quarter, down from $852 million a year ago. After adjusting for one-time items, earnings were $2.22 per share, seven cents ahead of estimates and up 8.8% from a year ago.
Analysts pointed out that despite the pressure on the bank stocks Thursday the financial sector was still up almost 20% year to date.
On the TSX, the financial sector was down but still ahead about 18% year to date.
Scotiabank shares fell 24 cents to $63.46 ahead of its earnings report coming out on Friday.
The gold sector fell as Goldcorp fell 77 cents to $22.16.
Metals were lower as March copper declined two cents to $3.23 U.S. a pound. The base metals sector fell and HudBay Minerals gave back 13 cents to $7.71.
The energy sector declined while Suncor Energy gave back 74 cents to $36.37.
A major mover on the TSX was Precision Drilling. Its stock fell 92 cents, or 9%, to $9.34 on huge volume of 69.5 million shares. Most of the volume came from a block trade of 56 million shares by Alberta Investment Management Company.
On the economic beat, Statistics Canada reported this morning that building permits hiked 7.4% in October to $7.2 billion, in contrast with a projected rise of 1%, and follows a 4.1% rise in the previous month.
StatsCan adds the total value of permits showed a slight upward trend on the strength of eight monthly increases since the beginning of the year.
The IVEY Purchasing Managers’ Index report rolled in this morning for November from Western University in London, and showed a reading of 53.7, compared to 62.8 for October, and 47.5 for November 2012. .
The PMI measures business spending month-to-month. A figure above 50 shows an increase while a figure below 50 shows a decrease.
ON BAYSTREET
The TSX Venture Exchange lost 4.84 points to 914.72
All 14 TSX subgroups were lower, weighed mostly by gold, retreating 3%, materials, down 1.9%, and the metals and mining group, off 1.3%.
ON WALLSTREET
Good economic news is once again putting pressure on the stock market as investors brace for the Federal Reserve to begin dialing down its stimulus.
The Dow Jones Industrials was off 68.26 points, to 15,821.50.
The S&P 500 index skidded 7.77 points to 1,785.04. The NASDAQ was down 4.84 points to 4,033.17. The Dow and S&P 500 have fallen for the past five trading days.
On the corporate front, Apple shares rose following a report that the company is nearing a deal with China Mobile to sell Apple's iPhone. China Mobile is the world's largest mobile carrier.
Shares of Apple have bounced back over the past few months, rebounding more than 50% from this year's lows in April.
Microsoft shares tumbled on news that Ford CEO Alan Mullaly is not planning to leave the company anytime soon.
Mulally had emerged as one of the frontrunners to replace current Microsoft CEO Steve Ballmer once he officially steps down. The stock, which is up 40% this year, has gained 15% since Ballmer announced plans to retire in August.
J.C. Penney shares were down nearly 10%, extending Wednesday's losses as investors worry about the retailer's turnaround plan.
J.C. Penney is still the worst performing stock in the S&P 500 this year, but shares rallied in the runup to Black Friday.
Shares of discount retailer Dollar General rose after reporting quarterly earnings that beat analysts' expectations and raising the lower end of its outlook for full-year profits.
Electronic Arts shares fell on continuing worries about technical problems with the video game maker's "Battlefield 4" game.
Jos. A Bank reported a decline in quarterly net sales and net income, compared with the prior year. The clothing retailer has been in a bizarre takeover battle with Men's Wearhouse, which originally rebuffed a hostile bid from Jos. A Bank before turning the tables and offering to buy its smaller rival.
On matters economic, the U.S. government revised its initial report on third-quarter economic growth to 3.6%, up from the previous estimate of 2.8%. The improvement was largely driven by inventory growth as companies restocked their shelves ahead of the holiday shopping season.
And the number of Americans filing first-time claims for unemployment benefits fell more than expected last week, the U.S. Labor Department said. Economists said the decline may have been distorted by the Thanksgiving holiday.
But the upbeat economic news failed to boost the market. Many investors believe that good economic news makes it more likely that the Federal Reserve will begin scaling back, or tapering, its monthly bond purchases.
The government's November jobs report is due Friday. Economists expect that report to show 183,000 jobs were added last month.
Prices for 10-year U.S. Treasuries sagged, raising yields to 2.86% from Wednesday’s 2.84%. Treasury prices and yields move in opposite directions.
Oil prices gained seven cents to $97.47 U.S. a barrel.
Gold prices slid $22.30 to $1,224.90 U.S. an ounce.
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