Newspaper article The Canadian Press

TSX Lower amid Solid Bank Earnings: Strong Economic Data Dampens Stimulus Hopes

Newspaper article The Canadian Press

TSX Lower amid Solid Bank Earnings: Strong Economic Data Dampens Stimulus Hopes

Article excerpt

TSX down amid Fed concerns, strong bank earns

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TORONTO - The Toronto stock market closed sharply lower Thursday as solid earnings and dividend hikes from three big Canadian banks took a back seat to increasing doubts about whether the U.S. Federal Reserve will take more measures to boost growth.

The S&P/TSX composite index tumbled 123.13 points to 11,886.65 and the TSX Venture Exchange gave back 11.19 points to 1,217.96.

Falling prices for oil and copper helped push the Canadian dollar down 0.28 of a cent at 100.78 cents US.

U.S. markets were also lower as another batch of positive economic data served to raise uncertainty over whether Fed chairman Ben Bernanke would use a much-anticipated speech Friday to hint at further stimulus measures.

American retailers reported strong sales gains for August. Target, Costco Wholesale and Limited Brands all reported results that beat estimates. And the U.S. Commerce Department reported that consumer spending rose 0.4 per cent in July, the best showing in five months.

The Dow Jones industrials dropped 106.77 points to 13,000.71. The Nasdaq composite index declined 32.48 points to 3,048.71 and the S&P 500 index was off 11.01 points at 1,399.48.

Thursday's positive data followed the release of the Fed's latest regional survey Wednesday, which showed the pace of economic growth expanding. Another report Wednesday showed the U.S. economy grew faster than earlier reported in the April-June quarter, at a 1.7 per cent annual pace.

The TSX found very slight support from the financial sector in the wake of positive earnings reports from Royal Bank (TSX:RY), TD Bank (TSX:TD) and CIBC (TSX:CM).

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 five per cent to 60 cents per share and its stock rose 36 cents to US$54.96.

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, but its stock lost 87 cents to $80.65.

CIBC shares also backed off, down $1.03 at $75.35 despite a big increase in net income in the quarter ended July 31 to $841 million from $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 (TSX:NA) is scheduled to report its results after markets close and its shares declined 81 cents to $71. …

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