The Toronto stock market stepped back Thursday, amid strong earnings reports from three of the big Canadian banks along with hopes that American lawmakers are getting closer to an agreement that would avert a fiscal crisis at the end of the year.
The S&P/TSX composite index dipped 18.57 points to 12,138.72
The Canadian dollar was up 0.09 cents to 100.90 cents U.S.
TD Bank's quarterly profit amounted to $1.66 per share before adjustments, down two cents per share from the same time last year. On an adjusted basis, TD had $1.83 per share of diluted earnings, up from $1.75 per share a year earlier and two cents a share above a consensus estimate.
TD also announced it is buying the U.S.-based Epoch investment management business for $668 million U.S. in cash.
CIBC had $852 million or $2.02 of net income in the fourth quarter, an increase of nearly $100 million from the same time last year. On an adjusted basis, CIBC’s fourth-quarter profit amounted to $2.04 per share, six cents above estimates.
And National Bank’s quarterly earnings ran ahead 20 per cent from a year ago to $351 million or $1.97 per share. Ex-items, the bank earned $1.93 a share, which matched expectations.
Air Canada and WestJet Airlines flew more passengers in November as demand for air travel remains robust, while regional carrier Porter Airlines reported a slump from last year's levels.
Husky Energy Inc. and the United Steelworkers union have reached a tentative agreement on a new contract for the 235 hourly workers at the company's 155,000 barrel per day Lima, Ohio refinery, the union and company said on Wednesday.
In other corporate news, grocer Loblaw Companies Ltd. says it wants to unlock shareholder value by creating create one of the largest real estate investment trusts in Canada. It plans to contribute a significant portion of its real estate assets to a planned REIT, which is expected to be sold in an initial public offering expected to be completed in mid-2013. Those assets have a current market value of more than $7 billion.
Bombardier Inc.’s aerospace division said American carrier Delta Air Lines has placed a firm order for 40 of its CRJ900 NextGen regional jets. Delta has also taken options on an additional 30 planes.
Montreal-based Bombardier said that, based on the list price, the firm order is valued at approximately $1.85 billion U.S. and could reach approximately $3.29 billion if the 30 options are exercised.
Rona Inc. said it is planning to sell non-core assets to focus the business and improve profitability. Rona is Canada’s largest home-improvement retailer.
On the economic calendar, Statistics Canada reported this morning that the total value of building permits in this country rose 15.0% to $7.5 billion in October, following a 12.7% decline in September, mostly due to higher construction intentions for non-residential buildings, mostly in Ontario and Quebec.
Purchasing activity in Canada unexpectedly fell in November, according to Ivey Purchasing Managers Index data released on Thursday, the latest report to suggest economic weakness has carried into the fourth quarter.
The seasonally adjusted index fell to 47.5 in November from 58.3 in October. Analysts polled by Reuters had expected an adjusted reading of 58.6.
ON BAYSTREET
The TSX Venture Exchange backtracked 1.17 points to 1,183.37.
Eight of the 14 Toronto subgroups were lower in early morning trading Thursday. Financials stepped back 0.8%, while the metals and mining stocks as well as their cousins in global base metals faded 0.4% each.
The half-dozen gainers were led by consumer staples, up 1.8%, gold, up 0.7%, and materials, advancing 0.4%.
ON WALLSTREET
U.S. stocks opened little changed Thursday, after markets finished mostly higher Wednesday.
The Dow Jones Industrials dropped 12 points to 13,022.50
The S&P 500 skidded 1.86 points to 1,407.42, while the Nasdaq Composite Index inched up 1.86 points to 2,975.56
Apple shares continued to decline, falling almost 3% in morning trading. In an interview, Apple CEO Tim Cook said Apple will begin manufacturing one of its existing Mac lines exclusively in the United States next year.
Yoga apparel maker lululemon athletica reported third-quarter earnings that topped expectations, but its guidance for the fourth quarter fell short of forecasts. Still, shares gained 5% in early trading.
Investors refrained from making big bets as the fiscal cliff remains unresolved. President Obama told members of the Business Roundtable Wednesday that there has been "some movement" on the Republican side toward allowing rates to rise on high-income taxpayers. If this continues, he said, "we can probably solve this in about a week."
Obama was adamant that going over the fiscal cliff for political purposes would harm the economy by jeopardizing America's credit rating.
Meanwhile, investors also continued to keep an eye on the latest jobs data leading up to the monthly jobs report due Friday. The U.S. Labor Department reported that the number of Americans filing for first-time unemployment benefits dropped 25,000 to 370,000 last week.
Economists predict the department's report on Friday will show the U.S. economy added only 77,000 jobs in November, which would mean a major hiring slowdown after 171,000 jobs were created a month earlier.
Treasury prices picked up ground, lowering yields on the 10-year note to 1.57% from Wednesday’s 1.59%. Treasury prices and yields move in opposite directions.
Oil prices gave back $1.11 to $86.77 U.S. a barrel.
Gold prices regained $1.60 an ounce to $1,695.40 U.S.
