The Toronto stock market was lower Thursday amid a poorly received earnings report from CIBC, while data showed the U.S. economy performing worse than expected earlier this year.
The S&P/TSX composite index dropped 59.01 points to greet noon at 14,551.95
The Canadian dollar gained 0.36 cents to 92.29 cents U.S.
CIBC said that poor results in its Caribbean operations were responsible for net income dropping to $306 million from $862 million a year ago. CIBC's adjusted net income came in at $887 million, or $2.17 per share, beating analysts' expectations of $2.07 per share.
CIBC also raised its quarterly dividend by two cents to $1 per common share. However, its shares dropped $1.57 to $97.47.
In other corporate developments, Bank of Nova Scotia is selling more than two-thirds of its interest in CI Financial Inc. in a deal worth at least $2.27 billion, making it one of the largest public offerings in Canada.
Scotiabank will sell 72 million common shares of CI at $31.50 per share, reducing its current 37 per cent interest to about 11.4%. CI shares climbed 23 cents to $33.88 and Scotiabank added 14 cents to $68.96.
The debut of shares in Encana Corp. subsidiary PrairieSky was a huge success Thursday. The energy giant earlier in the morning announced the completion of the initial public offering of 52 million common shares of PrairieSky at an offering price of $28 and by mid-morning, the shares were trading at $36.40 on the TSX.
Encana is spinning off some of its Alberta land holdings through PrairieSky.
Former prime minister Brian Mulroney is expected to be elected as board chairman of telecom and media giant Quebecor Inc. next month.
Pierre Karl Peladeau stepped down as board vice-chairman of Quebecor in March and chairman of subsidiaryQuebor Media when he announced plans to enter politics.
Mulroney is currently vice-chairman and the move could signal an attempt by Quebecor to put some distance between itself and Peladeau. Quebecor shares slipped 43 cents to $26.32.
Financials declined with all the major banks save Scotiabank giving back some of the gains racked up over the last week as most of the banks delivered strong results.
Techs led advancers with BlackBerry jumped 45 cents, or 5.7%, to $8.37 after CEO John Chen told a conference in California Wednesday that he reckons the chances of turning around the smartphone maker have risen to 80-20. He had previously been placing the recovery odds at 50-50.
Canada’s current account deficit narrowed to $12.39 billion in the first quarter of 2014 thanks to a stronger performance by exporters, Statistics Canada said on Thursday.
Market analysts had expected a shortfall of $13.1 billion.
ON BAYSTREET
The TSX Venture Exchange fell 1.10 points to 980.42.
Eight of the 14 Toronto subgroups were negative by noon, as financials toppled 0.8%, and the metals and mining group as well as telecoms each slid 0.7%.
There were five gainers, led by gold, up 0.7%, health-care, up 0.4%, and global base metals, inching up 0.2%. Materials were flat by noon
ON WALLSTREET
All U.S. major markets were modestly higher in late-morning trading. The S&P 500 shot to nearly 1,916 after the opening bell, another intraday trading record for the index. But the gains did not hold.
The Dow Jones Industrial Average had recovered 20.48 points to 16,653.66
The S&P 500 gained 4.45 points to 1,914.23, and the NASDAQ composite index moved ahead 12.64 points to 4,237.72
Shares of Hillshire Brands surged 15% after Tyson Foods unveiled a $6.8-billion U.S. buyout offer. The move comes days after Pilgrim's Pride launched a bid to buy Hillshire for $6.4 billion U.S. The packaged food companies are hungry to form one of the world's largest producers of meat, chicken and pork products.
Apple shares were modestly higher after the technology giant announced that it was buying headphone-maker Beats for $3 billion U.S. News of the deal had been circulating for nearly three weeks.
Shares of BlackBerry gained as investors welcomed comments from CEO John Chen at Recode's Code Conference. He said the company has an 80% chance of coming back (higher than his previous 50-50 estimate) and reiterated that BlackBerry isn't dead yet.
Costco issued its latest quarterly results, showing that sales increased but profit came in slightly below expectations. The stock is up modestly.
Abercrombie & Fitch shares surged more than 5% in early trading, even though the clothing retailer reported a quarterly loss.
Retailers Guess and Pacific Sunwear will report after the close. Despite a 27% drop in share price yesterday, DSW stock stabilized today
The U.S. economy shrank at a 1% annual rate in the first three months of the year, according to revised data released Thursday. That was much worse than the initial 0.1% reading, and reflected a sharp drop in inventory spending by businesses.
But economists downplayed the report, saying more recent indicators suggest the economy has improved in the current quarter. For example, the latest report on weekly jobless claims showed a sharp drop in the number of people filing for unemployment benefits.
Prices for 10-year U.S. Treasuries gained a bit, lowering yields to 2.42% from Wednesday’s 2.44%. Treasury prices and yields move in opposite directions
Oil prices acquired 67 cents to $103.39 U.S. a barrel.
Gold prices shed $3.40 to $1,255.90 U.S. an ounce.
