Bay Street was little changed Tuesday with commodity stocks providing some lift following news of a surprise jump in U.S. consumer confidence.
The S&P TSX Composite Index eked out a gain of 18.31 points to close at 11,913.86
Scotiabank said Tuesday its third-quarter profit rose 14% from a year ago to $1.06 billion. Cash earnings came in at 99 cents a share, one cent less than analysts expected as earnings in the capital markets division tumbled 35% to $305 million due to a decline in trading revenues.
But the bank also reported a 21% increase in net income from its Canadian banking business. Its shares were down 61 cents to $51.29.
Performance in the rest of the sector was mixed as TD Bank, which reports earnings on Thursday, was ahead 36 cents to $71.97 and Bank of Montreal gained 59 cents to $58.92.
The base metals sector rose as September copper on the Nymex lost five cents to $3.37 U.S. a pound. Western Coal Corp. gained 20 cents to $3.96 and Equinox Minerals climbed 15 cents to $4.74.
The telecom sector was higher after the CRTC ruled that the big phone and cable companies that own the nation’s Internet infrastructure must offer their highest speeds when they sell wholesale access to smaller competitors.
The federal regulator said Monday that traditional telephone companies such as Bell will be permitted to charge an additional 10% markup on the costs of providing access to their highest speeds. But it said that cable companies, such as Rogers or Videotron are already charging a sufficient markup for their service. BCE was up nine cents to $33.33.
In other corporate news, Alimentation Couche-Tard Inc. Canada’s largest convenience store operator, has extended its hostile bid to acquire U.S.-based Casey’s General Stores Inc. until Sept. 30 amid dwindling committed support from Casey’s shareholders. The Montreal-area company’s shares were even at $23.00.
Women’s clothing retailer Reitmans Ltd. posted a profit of $39.8 million in its most recent quarter, up from $26.4 million a year ago. Its shares were off 40 cents to $18.88.
On the economic front, Statistics Canada reported that the Canadian economy continued to grow in the second quarter but at a much slower pace from the January-March period. The agency said Tuesday that the Gross Domestic Product grew at an annualized rate of 2% after expanding by 5.8% in the first quarter.
Q2 economic growth was led by mining, particularly oil and gas extraction. Manufacturing also contributed to this gain as did the banking sector and the public sector through health, education, and public administration. Declines in the home resale market and in retail and wholesale trade contributed to the slower growth.
The Canadian dollar settled back 0.50 cents to 93.85 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups were higher at the close. Gold and global base metals tied for the overall lead 1.9%, while materials advanced 1.4%.
The laggards were weighed mostly by information technology, sagging 0.9%, consumer staples, down 0.8%, and energy, off 0.6%.
The TSX Venture Exchange advanced 2.46 points to 1,499.63, while the Nasdaq Canada index slipped 17.19 points to 548.27.
ON WALLSTREET
In New York, stocks fell off a bit late in the day, as investors weighed meeting minutes from the Federal Reserve and a surprise increase in consumer confidence.
The Dow Jones industrial average clung to a gain of 4.99 points to close at 10,014.72.
The S&P 500 index gained 0.41 points to 1,054.83. The tech-rich Nasdaq composite index stepped backward 5.94 points to 2,114.03.
Stocks were supported earlier in the session by a larger-than-expected rise in an index of consumer confidence and a jump in U.S. home prices. But the tone turned bearish late in the day after Fed released minutes from its Aug. 10 meeting.
The minutes raised concerns that the central bank may not take steps to support the faltering economic recovery unless conditions deteriorate significantly, according to some experts.
They also said the market will probably remain volatile as investors await key economic reports due later this week, including the government's closely watched non-farms payroll report on Friday.
Investors have been focused on the outlook for the U.S. economy recently, as the nation's growth has slowed. In particular, they are worried that the weak job market will continue to weigh on consumer spending -- which drives the bulk of economic activity.
Meanwhile, trading volume continued to be light with many traders are on vacation this week. Stocks dropped more than 1% in thin trading Monday
Shares of Saks Inc. spiked 23% after a report from England’s Daily Mail said a group of U.S. and U.K. private equity companies may soon bid $1.7 billion U.S., or $11 U.S. per share, for the high-end retailer.
The report said due diligence on the deal is nearly complete, but billionaires Carlos Slim and Diego Della Valle -- who hold significant stakes in the company -- may want more for their shares.
Shares of 3PAR slipped 0.7% as a Reuters survey revealed that most analysts and investors expect that Dell will bow out of the bidding war with Hewlett-Packard Co. for the data-storage company.
Dell has until Wednesday to match HP's $2-billion bid for 3PAR.
On the economic front, a report from the U.S. Conference Board showed that consumer confidence improved during August.
The business research group's index showed consumer confidence rose to a reading of 53.5 in August, from 51 in July. Economists were expecting the index to come in at 50, according to consensus estimates from Briefing.com.
The rebound in confidence numbers was attributed mostly to an improvement in how consumers view the short-term economic outlook, the Conference Board said. Meanwhile, the weak job market continues to darken their long-term view.
Separately, the Chicago PMI, a regional reading on manufacturing activity, fell to 56.7 in August. That's down from 62.3 in July, and was worse than expected. Economists were looking for a smaller dip to 57 in August.
Before the market opened, a report showed that national home prices jumped a substantial 3.6% in the past year. Economists had expected a year-over-year increase of 3.1% in June. The S&P/Case-Shiller Home Price Index also said that prices climbed 4.4% in the second quarter, compared to a 2.8% plunge in the first quarter.
Treasury prices continued to rally, lowering yields for the benchmark 10-year note to 2.48% from Monday’s 2.54%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil swooned three dollars to $71.70 U.S.
Gold prices strengthened $10 to $1,250 U.S. an ounce.
