An earnings miss from Bank of Montreal weighed on the Toronto stock markets Tuesday, particularly financials. What’s more, resource stocks backed off as folks fretted about the pace of an economic recovery.
The S&P TSX Composite Index shed 161.28 points, or 1.4%, to end a tumultuous day at 11,557.35
Financials suffered after Bank of Montreal kicked off the big banks’ quarterly earnings season by announcing a profit of $669 million or $1.14 per share of cash earnings, or about seven cents short of analyst estimates.
"The First Canadian Bank’s" capital markets division was hit particularly hard with a 58% decrease in profits to $130 million as it contended with lower trading revenues due to the economic uncertainty in Europe.
BMO shares fell $3.56 or 6% to $55.50.
CIBC reports earnings Wednesday. Its shares fell 2% or $1.36, to $66.81. National Bank and Royal Bank hand in results on Thursday. National stocks slipped $1.78 or 3.1% to $55.53, while Royal issues stepped back $1.60 or 3.1% to $50.09.
In the oil patch, Suncor Energy lost 44 cents to $32.11 while Canadian Natural Resources was down 88 cents to $32.91.
The September copper contract on the Nymex, meanwhile, was down six cents to $3.23 U.S. Teck Resources fell $1.01 to $32.95 while Lundin Mining dropped nine cents to $4.12.
Among consumer staples issues, Alimentation Couche-Tard jumped $1.71, or 8.2%, to $22.69 as the convenience store owner earned a record $129.5 million U.S. in its first quarter.
Gold stocks shone brighter, among them, Kinross Gold Corp., which advanced 30 cents to $16.25.
Shares in PotashCorp eased 37 cents to $157.80 amid reports the fertilizer giant is in talks with other international companies in a bid to trump a $38.6-billion U.S. hostile takeover offer from Australian mining company BHP Billiton. The Globe and Mail reported that Anglo-Australian firm Rio Tinto is considering a bid alongside a Chinese player.
The board of PotashCorp formally rejected BHP Billiton’s $130-U.S.-a-share offer on Monday, calling it inadequate.
Meanwhile, Calgary-based farm products company Agrium Inc. said the board of Australian grain marketer AWB Ltd. is recommending its shareholders approve a takeover by the company. Agrium will pay A$1.50 per share for AWB, or approximately $1.1 billion, a 37% premium to AWB’s trading price on Aug. 13, before it agreed to a deal. Agrium shares slid $2.23 to $70.65.
Elsewhere, HudBay Minerals Inc. said it has bought 10.9 million shares in Augusta Resource Corp. for about $30 million, increasing its stake in the base metals miner to 11%. HudBay shares fell 49 cents to $13.85.
Penn West Energy Trust said it has struck a deal with a unit of Japan’s Mitsubishi Corp., forming a 50-50 joint venture to develop the Calgary company’s gas assets in northeastern British Columbia. Its units gave back four cents to $20.44.
On the economic desk, Statistics Canada said retail sales improved only 0.1% to $35.9 billion in June, mostly through higher sales of cars and electronics. Experts figured sales would jump by 0.4%, after falling 0.2% in May.
The Canadian dollar skidded 0.75 cents to 94.28 cents U.S.
ON BAYSTREET
All but four of the 14 TSX subgroups ended the day negative. Financials took the biggest pasting, at 2.9%, while global base metals were down 2.8%, and metals and mining collapsed 2.7%.
The four gainers were led by consumer staples, up 1.8%, while telecoms and health-care issues climbed 0.7%.
The TSX Venture Exchange gave back 18.50 points to 1,456.85, while the Nasdaq Canada index removed 7.80 points to close at 571.33.
ON WALLSTREET
In New York, stocks closed sharply lower Tuesday after a report showing a worse-than-expected plunge in existing home sales reignited fears about an economic slowdown.
The Dow Jones industrial average jettisoned 133.96 points, or 1.3%, to 10,040.45.
The S&P 500 index surrendered 15.49 points to 1,051.87. The tech-rich Nasdaq composite index gave back 35.87 points to 2,123.76
Disappointing economic news has sent investors flocking to the perceived safety of Treasurys and the Japanese yen, which hit a 15-year high against the dollar early Tuesday.
Declines were led by tech, finance and health-care stocks, with General Electric and Sony sliding more than 2%, Citigroup and Bank of America dropping more than 1% and Pfizer slipping 2%. Among the biggest losers, Medtronic shares sank 11% after the medical device maker booked disappointing quarterly earnings and lowered its full-year outlook.
Wall Street struggled through another choppy session Monday, with stocks finishing lower as ongoing worries about the global economy pushed excitement about deal-making talks to the backburner.
Economically speaking, the National Association of Realtors said existing home sales plummeted 27% last month, marking the lowest sales pace since NAR began tracking the figure in 1999.
Meanwhile, a report released Tuesday showed that disagreements among the 17 key Federal Reserve officials about how to handle the economy peaked at a meeting earlier this month, according to The Wall Street Journal.
Treasury prices leaped, lowering yields for the benchmark 10-year note to 2.50% from Monday’s 2.61%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil subtracted $1.55 to $71.55 U.S.
Gold prices gained four dollars to $1,232 U.S. an ounce.
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