TSX lower amid China concerns; BMO, National Bank post solid earnings
Asian stocks were mostly higher Tuesday despite jitters about China's housing market after Wall Street's unexpectedly strong showing.
Malcolm Morrison, The Canadian Press
Published Tuesday, February 25, 2014 5:54AM EST
Last Updated Tuesday, February 25, 2014 2:18PM EST
TORONTO -- The Toronto stock market was lower Tuesday as concerns about China's economy depressed commodity prices and resource stocks while two major banks posted solid earnings reports.
The S&P/TSX composite index dropped 14.94 points to 14,212.14.
Bank of Montreal (TSX:BMO) had $1.06 billion or $1.58 of net income in the first quarter, up two per cent from a year earlier and five cents higher than forecast. Adjusted net income was $1.08 billion or $1.61 a share, which was also ahead of estimates.
National Bank's (TSX:NA) quarterly net income totalled $405 million or $1.15 per diluted share, up from $373 million or $1.05 per share in the same 2013 period. Ex-items, earnings were $384 million or $1.09 per share, well above expectations of $1.05 per share.
Bank of Montreal stock rose 46 cents to $73.03 while National Bank edged up 64 cents to $44.25.
"Wealth management and capital markets have been a real driver in year-over-year earnings growth for the banks, which they needed," said Kash Pashootan, portfolio manager and vice-president at First Avenue Advisory in Ottawa, a Raymond James company.
"They needed some catalyst to replace the fact that personal and commercial banking has been fairly sluggish and slowing, especially with consumer loan growth decelerating."
The Canadian dollar slipped 0.13 of a cent to 90.23 cents US.
U.S. indexes were mainly positive amid data showing the latest weather-related impact on economic data. U.S. home prices fell for the second straight month in December as severe winter weather, tight supply and higher costs combined to slow sales.
The Standard & Poor's/Case-Shiller 20-city home price index declined 0.1 per cent from November to December.
The Dow Jones industrials was up 16.25 points to 16,223.39, the Nasdaq dipped one point to 4,291.96 while the S&P 500 index was ahead 1.15 points to 1,848.76.
Other data showed a dip in American consumer confidence. The Conference Board's index showed the index declined to 78.1 in February from 79.4 in January because of adverse weather conditions.
Commodity prices declined with markets rattled by a deceleration in the rise of Chinese housing prices in January and weakness in China's currency.
Last week's decline in the tightly controlled yuan prompted suggestions that Beijing might be trying to support exporters and help offset weakening domestic demand. That came after a HSBC survey showed Chinese manufacturing activity in February tumbled to a seven-month low.
The energy sector drifted 0.53 per cent lower as the April crude contract on the New York Mercantile Exchange fell $1.27 to US$101.55 a barrel.
The base metals component was off 0.49 per cent while March copper fell for a second day, down one cent to US$3.25 a pound.
The gold sector was flat while April bullion gained $4.70 to US$1,342.70 an ounce.
BlackBerry (TSX:BB) was a major gainer, up 91 cents or 8.37 per cent to $11.78 as the smartphone maker continued to benefit from a report from Bloomberg that automaker Ford will base its next-generation Sync system on the smartphone maker's QNX and no longer use a system from Microsoft. The strong showing followed a run-up of almost seven per cent on Monday.