The Toronto stock market headed for a lower open Thursday amid a mixed bag of earnings from three of Canada's big banks while traders looked to U.S. jobs data that could provide a clue about when the Federal Reserve might start to cut back on key stimulus measures.
The S&P/TSX composite index dropped 54.95 points to end Wednesday’s session at 13,264.92.
The Canadian dollar gained 0.13 cents at 93.74 cents U.S. early Thursday
Toronto-Dominion Bank had $1.622 billion of net income in the fourth quarter, up from $1.597 billion a year ago. On an adjusted basis, TD earned $1.90 per share, up from $1.83 in the fourth quarter of 2012 but nine cents less than analysts had expected. TD also raised its dividend by a penny to 86 cents a share and a two-for-one stock split effective early next month.
Most of TD's major units showed increases but net income from wholesale banking fell by 61% to $122 million from a year earlier, due to lower security gains and higher non-interest expenses.
Royal Bank of Canada had $2.119 billion of net income in its fiscal fourth quarter, an 11% increase from last year. Adjusted diluted earnings per share were $1.42. Its main Canadian banking arm had $1.08 billion of net income, up 5% from a year ago.
Its capital markets and its investor and treasury units also had increases while profit at RBC Insurance was down and wealth management was flat. Its dividend remains unchanged.
RBC also announced that Gordon Nixon intends to retire effective Aug. 1, 2014, after 13 years as president and chief executive.
CIBC made $836 million in net income in its fiscal fourth quarter, down from $852 million in the same period last year. 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. Revenue of $3.2 billion fell short of estimates of $3.26 billion.
CIBC says its results were impacted in part by a $39-million restructuring charge relating to FirstCaribbean International Bank and a $35-million impairment of an equity position tied to its U.S. leveraged finance portfolio. A dividend increase had been expected but its dividend was unchanged.
Traders will also look to Barrick Gold a day after Peter Munk announced he will retire next year from the board of the world's largest gold producer. Former Goldman Sachs executive John Thornton, who has shared the chairman's duties with Munk since 2012, will be named chairman.
Munk's departure is part of broad changes at the gold miner, including the hiring of a chief operating officer and the nomination of four new independent directors.
The TSX financial sector has been a drag so far this week following earnings from Bank of Montreal and National Bank. BMO beat earnings expectations but investors were disappointed with, among other things, weakness in its U.S. operations. National Bank also lost ground even as it met analyst forecasts and upped its dividend.
Still, the TSX financial sector started this week up more than 20% year to date.
Scotiabank posts earnings on Friday.
In other earnings news, Dollarama Inc. says its third-quarter overall sales increased by 14.2% to $522.9 million while comparable-store sales were up 4.8%.
Net income was $61.7 million, up from $51.48 million a year earlier, while diluted earnings per share for the Montreal-based discount retail chain rose to 87 cents per share from 68 cents.
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.
Later on this morning, the IVEY Purchasing Managers’ Index report rolls in for November from Western University in London. Projections call for a reading of 59.5.
ON BAYSTREET
The TSX Venture Exchange gained 4.23 points Wednesday to 919.52
ON WALLSTREET
Stocks were treading water Thursday ahead of a busy day of global economic news.
Ahead of the opening bell, futures for the Dow Jones Industrials retreated four points to 15,882. Futures for the S&P 500 inched up 2.20 points, or 0.1%, to 1,794, and futures for the NASDAQ gained seven points, or 0.2%, to 3,489.50
On the corporate front, 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 tug-of-war of sorts with Men's Wearhouse, which rebuffed a hostile bid from Jos. A Bank. Most recently, Men's Wearhouse offered to buy its smaller rival.
On the economic slate, the U.S. government will release its weekly report on initial jobless claims as well as its second estimate of third-quarter GDP this morning.
At 10 a.m., the Census Bureau will publish its monthly report on factory orders.
The government's November jobs report is due Friday. An estimate by economists expects that report to show 183,000 jobs were added last month.
European markets inched higher as traders digested the interest rate decision from the European Central Bank and the Bank of England. The ECB decision – to keep rates at 0.25% -- was to be followed by a press conference with the central bank's president Mario Draghi.
Asian markets ended mostly lower, with Japan's Nikkei 225 slumping 1.5% and Hong Kong's Hang Seng down 0.1%.
Oil prices picked up 19 cents to $97.39 U.S. a barrel
Gold prices fell $17.10 at $1,230.10 U.S. an ounce.
