The Toronto stock market was slightly higher Tuesday as the financial sector supplied some lift after Bank of Montreal and Scotiabank released quarterly earnings that beat expectations.
The S&P/TSX composite index gained 24.07 points to 12,072.9, with strength also coming from miners, while the TSX Venture Exchange dipped 2.22 points to 1,244.6.
BMO shares ran ahead 68 cents to $58.38 as the bank posted net income of $970–million or $1.42 per share, up 37 per cent from a year ago. On an adjusted basis, the bank’s earnings were $1.49 per share, beating analyst expectations by 10 cents. BMO also increased its dividend by two cents to 72 cents a share.
Scotiabank’s quarterly profits grew by 57 per cent to $2.05-billion or $1.69 a share, three cents higher than expectations. The bank also said it is raising its quarterly dividend by two cents to 57 cents per share.
The Scotiabank results were helped by an after-tax gain of $614-million from the sale of its headquarters in Toronto’s financial district and its shares climbed 33 cents to $53.27.
The Canadian dollar rose 0.45 of a cent to 101.36 cents (U.S.).
New York markets were generally listless despite the release of some positive data on house prices and the Dow Jones industrials edged 3.66 points lower to 13,121.01.
The Nasdaq composite index gained 2.05 points to 3,075.24 and the S&P 500 index was off 0.49 of a point to 1,409.95.
The Standard & Poor’s/Case-Shiller home price index shows prices rose in June from May in every city it tracked. It showed increases in all of the 20 cities tracked for a second consecutive month. A measure of national prices rose 2.3 per cent in June from May, the third straight increase. And home prices jumped nearly seven per cent in the April-June quarter from the previous quarter.
Elsewhere on the economic front, the Conference Board will release its latest reading on U.S. consumer confidence. Economists expect the index to show a slight improvement from July’s reading of 65.9.
Traders also looked ahead to a speech Friday by U.S. Federal Reserve chairman Ben Bernanke at the central bank’s annual retreat at Jackson Hole, Wyo. Markets have registered solid gains in August, in large measure from expectations that global central banks will step in with further stimulus measures to maintain the momentum of the economic revival and preserve the euro zone monetary union.
But some analysts caution Bernanke is unlikely to tip his hand ahead of a slew of key economic data next week, particularly the non-farm payrolls report for August. This past month has seen a string of positive economic data, starting with better than expected job creation in July, rising retail sales and consumer confidence and positive housing reports.
Meanwhile, European Central Bank head Mario Draghi has called off his trip to the Fed conference, due to a heavy workload as top ECB officials shape their plans to intervene in bond markets and lower borrowing costs for indebted governments.
The ECB plan remains subject to debate ahead of the bank’s monthly meeting on Sept. 6, when it is expected to announce more details. Germany’s central bank is still opposed to the plan to buy government bonds.
On the TSX, the financial sector gained about 0.5 per cent with Royal Bank ahead 51 cents to $54.42.
The base metals sector was up 0.6 per cent while September copper was off two cents at $3.45 (U.S.) a pound. Teck Resources climbed 31 cents to $29.24.
The energy sector was ahead 0.15 per cent as oil prices rose ahead of the consumer confidence data and threats to production in the Gulf of Mexico from tropical storm Isaac appeared to lessen. Forecasts for Isaac have been toned down, easing concerns that the storm could damage key oil and gas operations along the U.S. Gulf Coast.
Weather forecasters now say the storm will grow to a Category 1 hurricane instead of a stronger Category 2.
Another factor pushing up prices was an intense fire at the Amuay refinery in western Venezuela. The fire has been burning since a huge explosion at the refinery on Saturday caused a suspension of operations there.
The October crude contract on the New York Mercantile Exchange rose 70 cents to $96.17 (U.S.) a barrel and Canadian Natural Resources was ahead seven cents to $30.75.
The gold sector was down slightly as December gold backed off $7.20 to $1,668.40 (U.S.) an ounce.
Meanwhile, Spain saw some good news from a bond auction. Spain’s Treasury sold nearly $4-billion (Canadian) in short-term debt auctions that saw investors accepting much lower interest rates, reflecting easing concern that the country will need a full-blown bailout.
The Spanish Treasury sold $1.67-billion in three-month bills at an average interest rate of 0.95 per cent, down from 2.43 per cent in the last such auction July 24. And it sold $1.93-billion in six-month bills on a yield of 2.03 per cent, down from 3.69 per cent.
European bourses were lower with London’s FTSE 100 down 0.46 per cent, Frankfurt’s DAX declined 0.98 per cent and the Paris CAC 40 stepped back 0.87 per cent.
Earlier in Asia, the Tokyo Stock Exchange’s benchmark Nikkei lost 0.6 per cent, South Korea’s Kospi index was down nearly 0.1 per cent while the Hang Seng index inched up marginally.
Key indexes dipped in Singapore, Indonesia and Taiwan, while rising in New Zealand, mainland China and Australia.