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Stocks down in early trading amid strong bank earnings, geopolitical worries

Canadian Press, The Canadian Press
0 Comments| August 28, 2014

TORONTO _ The Toronto stock market was lower Thursday amid rising tensions between Russia and Ukraine and Canadian bank earnings that beat expectations.

The S&P/TSX composite index lost 46.23 points to 15,556.33.

CIBC (TSX: T.CMStock Forum) posted a quarterly net income of $921 million or $2.26 per share, compared with $878 million, or $2.13 per share, in the same quarter last year. Adjusted earnings were $2.23 a share, two cents ahead of estimates. CIBC's wealth management services reported net income up 19 per cent from a year ago to $121 million. However, there was some disappointment with results from its domestic retail business and its shares fell $2.33 to $103.18.

Meanwhile, Toronto-Dominion Bank (TSX: T.TDStock Forumshares dipped 24 cents to $57.58 after it reported a third-quarter net profit of $2.1 billion, or $1.11 per share, compared with $1.52 billion, or 79 cents per share, in the same quarter last year. Adjusted net income was $2.16 billion, or $1.15 per share, beating estimates of $1.09. Total revenue was $7.5 billion compared with $7.1 billion year-over-year.

The Canadian dollar inched down 0.02 of a cent to 92.1 cents US.

The greenback strengthened while U.S. markets were lower despite data showing the American economy turned in a better than expected performance during the second quarter.

The latest revision shows gross domestic product grew by 4.2 per cent, versus the original reading of four per cent. Economists had generally expected a dip to 3.8 per cent.

The showing was a huge improvement from the first quarter, when GDP contracted 2.1 per cent, largely because of severe winter weather.

Statistics Canada is expected to release the June reading on Canadian gross domestic product on Friday. Economists expect that GDP grew by 0.2 per cent in June, which would translate into annualized growth of 2.6 per cent.

The Dow Jones industrials fell 97.76 points to 17,024.25, the Nasdaq lost 21.49 points to 4,548.13 and the S&P 500 index was up 9.05 points to 1,991.07.

There was nervousness that Russia was escalating its role in the Ukraine conflict, a move that could provoke the U.S. and European Union to impose further sanctions on Russian businesses and individuals.

The strategic southeastern Ukraine town of Novoazovsk appeared firmly under the control of Russia-backed separatists. The southeastern portion of Ukraine along the Azov Sea previously had escaped the fighting engulfing areas to the north.

Investors looking for safe havens pushed gold prices higher with the December contract up $8.70 to US$1,292.10 an ounce, pushing the gold sector up 1.2 per cent.

Financials led decliners, down 0.6 per cent but there was weakness in most other sectors.

The energy sector gave back 0.2 per cent with October crude 70 cents higher at US$94.58 a barrel.

The base metals group decline one per cent while December copper was three cents lower to US$3.15 a pound.


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