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The Scotiabank branch at 2080 Queen St. East in Toronto's Beach neighbourhood is photographed on March 5, 2014. (Fred Lum/Fred Lum/The Globe and Mail)
The Scotiabank branch at 2080 Queen St. East in Toronto's Beach neighbourhood is photographed on March 5, 2014. (Fred Lum/Fred Lum/The Globe and Mail)

At the open: TSX dips; Scotiabank beats expectations Add to ...

Falling gold stocks pushed the Toronto stock market slightly lower Tuesday, but the TSX found some lift from financials after Scotiabank posted earnings that beat analysts’ forecasts.

The S&P/TSX composite index was down 18.09 points to 14,697.6 as Scotiabank boosted its second-quarter net profit by 14 per cent to $1.8-billion, helped by its Canadian banking and global wealth and insurance segments. Adjusted diluted earnings per share were $1.40, beating analysts’ estimates of $1.31 a share. However, the provision for credit losses was up $32-million to $375-million in the quarter, primarily due to higher provisions in its international banking segment. Scotiabank shares were up 76 cents to $68.76.

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The strong showing followed reports last week from Royal Bank and TD Bank, which also beat expectations. The rest of the banks report this week and National Bank was set to hand in earnings Tuesday after the market close.

The Canadian dollar was up 0.15 of a cent to 92.23 cents (U.S.).

U.S. indexes were higher amid a mixed reading on U.S. durable goods orders as traders get back to work following the Memorial Day holiday weekend.

The Dow Jones industrials were ahead 57.92 points to 16,664.19, the Nasdaq ran up 22.15 points to 4,207.96 and the S&P 500 index gained 8.29 points to 1,908.82.

The U.S. Commerce Department reported Tuesday that orders for durable manufactured goods rose 0.8 per cent after a 3.6 per cent gain in March. But the April strength came from a big jump in demand for defence goods, including airplanes. Excluding defence, orders would have fallen 0.8 per cent in April.

Orders for core capital goods, a category viewed as a good proxy for business investment plans, fell 1.2 per cent in April.

Other data showed the Case-Shiller house price index showed that prices rose 0.9 per cent in March.

There was also major buying activity in the food business as Pilgrim’s Pride offered to acquire meat producer Hillshire Brands in a deal worth about $5.58-billion (U.S.). The poultry producer is offering $45 per share for Hillshire, which makes Hillshire Farm lunch meats and Jimmy Dean sausages, which is a 24 per cent premium to Hillshire’s closing price Friday.

Pilgrim’s Pride says the deal is a better offer than Hillshire’s plan to buy Pinnacle Foods for $4.23-billion. Pinnacle makes Birds Eye frozen vegetables and Duncan Hines cake mixes.

The Scotiabank results sent the financial index on the TSX up 0.3 per cent.

The gold sector was the biggest drag, down 2.24 per cent with June bullion down $14.90 to $1,276.80 an ounce.

The base metals sector weakened 0.45 per cent, while July copper was up a penny at $3.18 a pound.

The energy sector dipped 0.25 per cent as July crude in New York declined 49 cents to $103.86 a barrel.

Markets are also keeping a wary eye on developments in Ukraine after Sunday’s presidential elections.

Russia’s acceptance of-billionaire businessman Petro Poroshenko as Ukrainian president had raised hopes for an easing of tensions. But hours after he was declared the victor, pro-Russian rebels escalated the Ukrainian conflict by occupying a major airport in the country’s east and Kiev retaliated with an air strike.

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