The Toronto stock market got bruised 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 stumbled 47.09 points to begin Thursday at 11,962.70
The Canadian dollar backtracked 0.14 cents to 100.93 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. Royal shares gained 75 cents at the outset to $55.35
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. TD shares dipped 47 cents to $81.05
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. CIBC shares registered at $76.20, down 18 cents from yesterday’s close.
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. Scotiabank shares sank $1.26 to $52.34.
On the economic slate, Statistics Canada reported that this country’s current account deficit expanded $5.9 billion to a seasonally-adjusted $16.0 billion in the second quarter, mainly on lower exports and higher imports of goods.
ON BAYSTREET
The TSX Venture Exchange fell 5.11 points to 1,224.05. The Nasdaq Canada erased 2.10 points to 342.74
All but two of the 14 Toronto subgroups were lower at the beginning of the session. Global base metals headed earthward 1.5%, while their cousins in the metals and mining sector dropped 1.3% and information technology shed 0.7%.
The two gainers were gold, up 0.4%, and consumer staples, up 0.2%.
ON WALLSTREET
U.S. stocks fell at the open Thursday as disappointing economic news out of the United States renewed worries about a global slowdown.
The Dow Jones industrial average let go of 65.39 points to open at 13,042.09
The S&P 500 index faltered 7.96 points to 1,402.53, and the tech-heavy Nasdaq Composite Index was lower by 20.30 points to 3,060.89.
In company news, 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 edged lower.
Same-store sales data from several leading retailers, including Macy's, Costco Wholesale, Target and Gap Inc., exceeded expectations.
After the closing bell on September 4, Sears Holdings Corp will no longer be trading in the S&P 500, since the number of public shares in the hands of investors has been well below the 50% threshold required for inclusion for some time. It will be replaced by LyondellBasell, which manufactures chemicals and refines crude oil.
Shares of network equipment maker Ciena were down more than 13% following disappointing second-quarter earnings.
Pandora shares jumped nearly 20%, as the music streaming service said it broke even in its most recent quarter.
Many investors have been holding off on making any big bets before Friday, when Federal Reserve Chairman Ben Bernanke speaks in Jackson Hole, Wyo. Observers will be looking for hints from Bernanke about the possibility of new stimulus measures.
Energy markets will also be in focus, with Hurricane Isaac curtailing oil production along the Gulf of Mexico.
Economically speaking, the U.S. Labor Department reported that number of Americans filing for first-time unemployment totaled 374,000 during the week ending August 25, unchanged from the previous week's revised figure. Claims were expected to total 370,000, according to a survey of analysts by Briefing.com.
The Bureau of Economic Analysis said personal income increased $42.3 billion U.S., or 0.3%, in July, in line with Briefing.com's consensus.
Personal consumption expenditures increased $46 billion U.S., or 0.4%, for the month. That was slightly below the 0.5% increase expected by economists polled by Briefing.com.
The price on the benchmark 10-year U.S. Treasury gained ground, pushing the yield down to 1.62% from 1.66% late Wednesday. Treasury prices and yields move in opposite directions.
Oil prices for September delivery fell 28 cents to $95.21 U.S. a barrel.
Gold futures for December delivery rose 40 cents to $1,665.50 U.S. an ounce.
