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At midday: TSX falls as upbeat bank earnings fail to entice buyers

A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.

Mark Blinch/Reuters

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 43.12 points to 15,559.53.

CIBC (TSX:CM) 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. However, there was some disappointment with results from its domestic retail business and its shares fell $2.63 to $102.88.

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TD Bank (TSX:TD) says its third-quarter net profit was $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. TD shares dipped 23 cents to $57.59.

Both banks had been very close to 52-week highs before the results came out and the financials sector is still up 11 per cent year to date.

"What we've grown to recognize with the Canadian banks is that they are excellent operators of their model," said Brian Belski, Chief Investment Strategist BMO Capital Markets.

"We can nitpick on a cent here or there, I just don't think that's the right way to be thinking about this. You have a company that is generating cash and continuing on with their dividends, being prudent in terms of their operations — that's a company I want to own in my portfolio."

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

The greenback strengthened while U.S. indexes 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.

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

The Dow Jones industrials fell 57.34 points to 17,064.67, the Nasdaq lost 10.74 points to 4,558.88 and the S&P 500 index was down 4.33 points to 1,995.79.

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 $6.60 to US$1,290 an ounce, pushing the gold sector up 0.5 per cent.

Financials led decliners, down 0.7 per cent but there was weakness in most other sectors.

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The energy sector gave back 0.15 per cent with October crude 61 cents higher at US$94.49 a barrel.

The base metals group declined 1.2 per cent, while December copper was five cents lower to US$3.15 a pound.

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