The Toronto stock market headed for a lower open Thursday despite solid earnings reports and dividend hikes from three big Canadian banks as doubts remain about whether the U.S. Federal Reserve will take more measures to boost growth.
The S&P/TSX Composite index dropped 0.11 points to end Wednesday at 12,009.79
The Canadian dollar fell 0.21 cents Thursday morning to 100.86 cents U.S.
The TSX could find support from the financial sector in the wake of reports from Royal Bank, TD Bank and CIBC.
Royal Bank’s earnings grew to $2.24 billion or $1.47 per share, partly on strength in its Canadian consumer banking operations, from $1.29 billion a year ago. Excluding certain items, the bank earned $1.31 a share in the quarter against analyst estimates of $1.18. RBC also raised its quarterly dividend by 5% to 60 cents per share.
TD Bank’s quarterly net income rose to $1.7 billion, or $1.78 per share, from $1.49 billion a year ago. After adjustments, the bank’s net income was $1.82 billion or $1.91 per diluted share, seven cents better than estimates. TD also upped its dividend, which will rise five cents to 77 cents.
CIBC says its net income in the quarter ended July 31 was $841 million, compared with net income of $591 million for the same period last year. Excluding one-time items, the bank earned $2.06 a share, a dime better than forecast. CIBC also announced a quarterly dividend increase of four cents a share.
National Bank is scheduled to report its results Thursday after markets close.
Both Bank of Montreal and Scotiabank also handed in earnings which beat expectations on Tuesday.
And Scotiabank announced after the market close Wednesday that it has reached an agreement to buy ING Bank of Canada from Netherlands-based parent ING Group for $3.13 billion in cash.
The deal is expected to result in a net investment by Scotiabank of $1.9 billion, after deducting the excess capital currently at ING Direct. Scotiabank also announced a public offering of 29 million common shares at $52 — for gross proceeds of $1.5 billion — to fund the acquisition. Its shares closed Wednesday at $53.60, up 70 cents.
On the economic slate, Statistics Canada reported that this country’s current account deficit (on a seasonally adjusted basis) expanded $5.9 billion to $16.0 billion in the second quarter, mainly on lower exports and higher imports of goods.
ON BAYSTREET
The TSX Venture Exchange fell 12.72 points to 1,229.18. The Nasdaq Canada erased 3.04 points to 344.84
ON WALLSTREET
U.S. stocks were poised for a weak open Thursday as investors await the latest reading on jobless claims, and personal income and spending.
Futures for the Dow Jones Industrials sagged 30 points, or 0.2%, to 13,054, about 30 minutes before the opening bell.
Futures for the S&P 500 sank 5.2 points, or 0.4%, to 1,402, and for the Nasdaq, futures dipped 9.75 points, or 0.4%, to 2,771.50.
Europe is once again in focus following an auction of five- and 10-year Italian bonds Thursday morning. Italy's borrowing costs fell, signaling that investors are more confident that the European Central Bank will stage a major intervention in the bond market.
An op-ed by E.C.B. President Mario Draghi published Wednesday helped solidify that optimism, as he reiterated that "exceptional measures" are justified to stabilize financial markets.
Energy markets will also be in focus, with Hurricane Isaac curtailing oil production along the Gulf of Mexico.
European stocks slid in morning trading. Britain's FTSE 100 shed 0.2%, the DAX in Germany fell 0.8% and France's CAC 40 edged lower 0.1%.
Asian markets ended lower. The Shanghai Composite was flat, while the Hang Seng in Hong Kong lost 1.2%, and Japan's Nikkei fell 1%.
The U.S. Labor Department will have released data on initial jobless claims for the week ended August 25 this morning. Claims are expected to total 370,000, according to a survey of analysts by Briefing.com, down from 372,000 in the week prior.
Also before the bell, the Bureau of Economic Analysis will release data on personal income and spending for July. Personal spending is expected to have increased by 0.5%, while personal income is expected to have risen by 0.3%.
Barclays named Antony Jenkins as the bank's new chief executive Thursday morning. Jenkins currently leads Barclays retail and business banking business. Former Barclays CEO Bob Diamond resigned in July amid a scandal over the manipulation of Libor rates. Shares of the bank were lower in pre-market trading.
Same-store sales data are expected from several leading retailers before the opening belle, including Macy's, Costco Wholesale, Target and Kohl's.
Pandora shares jumped more than 13% in pre-market trading, as the music streaming service said it broke even in its most recent quarter.
Oil for October delivery fell 21 cents to $95.28 U.S. a barrel.
Gold futures for December delivery edged lower $6.70 to $1,663 U.S. an ounce.
