News Column

Toronto stock market to open little changed, National Bank beats expectations

August 27, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was set to open little changed following another record-high close as traders continued to digest earnings reports from the Canadian banking sector, in this case a solid report from National Bank (TSX:NA).

The Canadian dollar was up 0.38 of a cent to 91.69 cents US.

U.S. futures were flat with the Dow Jones industrial futures up nine points to 17,106, the Nasdaq futures added 1.5 points to 4,073.8 and the S&P 500 futures ticked 0.6 of a point higher to 1,999.2.

Quebec-based National Bank posted net earnings of $441 million, up 10 per cent from a year ago. Adjusted earnings came in at $1.20 a share, nine cents ahead of estimates.

Total revenues for the country's sixth largest lender were $1.42 billion, up from $1.29 billion in the same period last year.

The bank's return on equity for the quarter was 19.4 per cent compared with 20.1 per cent year-over-year.

National Bank's earnings followed reports from Royal Bank (TSX:RY), which on Friday posted a record quarterly profit that beat expectations and a dividend increase. Bank of Montreal (TSX:BMO) and Scotiabank (TSX:BNS) reported mixed results Tuesday. None of the results have resulted in big stock moves with expectations elevated for a sector that is up 12 per cent year to date. CIBC (TSX:CM) and TD Bank (TSX:TD) report on Thursday.

In the U.S., luxury retailer Tiffany & Co. reported earnings of $124.1 million or 96 cents a share in its fiscal second quarter, beating estimates by a dime. The company posted revenue of $992.9 million in the period, also surpassing expectations.

The Toronto stock market rose 20 points Tuesday, boosted in part by major corporate deal making as Burger King announced it's buying Tim Hortons (TSX:THI). The cash and stock deal is worth about US$11 billion and will create the world's third-largest quick service restaurant company.

In other corporate news, workers at Bombardier (TSX:BBD.B) in Thunder Bay, Ont., have rejected the latest offer from the transportation company. Unifor says the company’s demands for concessions would hit all workers and retirees enrolled in the company's benefit plan. The workers have been on strike since July 14. The Thunder Bay light rail facility builds new subway and streetcars for the Toronto Transit Commission, as well as cars for Ontario's GO train commuter service.

On the commodity markets, October crude in New York was up 35 cents to US$94.21 a barrel.

December copper was down a cent to US$3.21 a pound, while December bullion gained $2.40 to US$1,287.60 an ounce.

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Source: Canadian Press DataFile

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