Newspaper article The Canadian Press

TSX Closes Lower, Financials Lead Decliners amid Sharply Lower CIBC Earnings

Newspaper article The Canadian Press

TSX Closes Lower, Financials Lead Decliners amid Sharply Lower CIBC Earnings

Article excerpt

Financials take Toronto stock market lower

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TORONTO - The Toronto stock market closed lower Thursday amid a poorly received earnings report from CIBC (TSX:CM) and data showing the U.S. economy performing worse than expected earlier this year.

However, the market closed well off session lows as energy stocks turned positive and the S&P/TSX composite index moved down just 22.01 points to 14,588.95.

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 $2.17 per share, beating analysts' expectations of $2.07 per share and the bank also raised its quarterly dividend by two cents to $1 per common share. However, its shares dropped $1.36 to $97.68.

Financials led TSX decliners with all of 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.

"You've seen banks outperform as a group, about three per cent over the last week or so -- not surprising we're having a bit of a profit-taking on them," said Stephen Lingard, managing director of Franklin Templeton Solutions.

"There is a slowing momentum in mortgage products and they're having to be pretty competitive with each other. But they have had other segments that have offset this, notably wealth (management) and business loans so all in all a good quarter."

The Canadian dollar was up 0.33 of a cent to 92.28 cents US.

U.S. indexes were higher as the first revision to first-quarter gross domestic product showed that GDP actually shrank at an annualized rate of one per cent in the period, largely because of severe winter weather. That was much higher than the 0.5 per cent drop that economists had expected, but they anticipate the weakness to be short-lived. …

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