TSX dropS 105 poinTS; bank profiTS miXed

TORONTO • The Toronto stock market closed lower Thursday, pressured by the financial sector as the latest batch of bank earnings disappointed, giving traders an excuse to take some more profits from a sector that has delivered solid returns all year.

The S&P/TSX composite index fell 104.52 points to 13,200.40 with extra selling pressure coming from mining stocks amid falling commodity prices.

The Canadian dollar erased early losses to rise US0.33¢ to US93.98¢.

Toronto-Dominion Bank shares fell $1.35 to $94.40 after it reported a quarterly profit of $1.62-billion, up from $1.6-billion a year ago. On an adjusted basis, TD earned $1.90 per share, up from $1.83 a year ago but 9¢ less than analysts had expected.

The bank also raised its dividend by 1¢ to 86¢ a share and announced a two-forone stock split.

Most of TD’s major units showed increases but net income from wholesale banking fell by 61% to $122-million from a year earlier.

Meanwhile, Royal Bank of Canada had $2.12-billion of quarterly net income, up 11% from last year. Adjusted diluted earnings per share was $1.42, 4¢ higher than analysts had forecast. But its shares fell 83¢ to $68.17 as Barclays analyst John Aiken pointed to both the wealth management and retail banking divisions as performing weaker than he expected.

RBC also announced that president and chief executive Gordon Nixon will retire next summer.

Canadian Imperial Bank of Commerce shares dropped $1.23 to $88.82 as it reported a profit of $836-million in net income in its latest quarter, down from $852-million a year ago. After adjusting for one-time items, earnings were $2.22 per share, 7¢ ahead of estimates and up 8.8% from a year ago.

Analysts pointed out that despite the pressure on the bank stocks Thursday, the financial sector was still up about 18% year to date.

U.S. indexes were lower as concerns about what the Federal Reserve will do with a key stimulus measure grew in the wake of more positive economic data.

The Dow Jones industrial average lost 68.26 points to 15,821.51 amid further positive news on the U.S. jobs front a day before the release of the government’s employment report. The U.S. Labor Department reported that applications for jobless benefits, which are a proxy for layoffs, dropped 23,000 last week to 296,000.

Nasdaq declined 4.83 points to 4,033.17 and the S&P 500 index was down 7.78 points to 1,785.03.

On the TSX, the financial sector was down about 0.66% but still ahead about 18% year to date. Bank of Nova Scotia shares fell 38¢ to $63.32 ahead of its earnings report Friday.

The gold sector was the biggest percentage decliner, falling almost 3%. December bullion declined US$15 to US$1,233.20. Base metals were also lower as March copper declined US2¢ to US$3.23 a pound.

The energy sector declined 0.32% while the January crude contract on the New York Mercantile Exchange gained US18¢ to US$97.38 a barrel.