News Column

TSX set to open lower amid strong bank earnings, geopolitical worries

August 28, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market headed for a lower open Thursday amid rising tensions between Russia and Ukraine and Canadian bank earnings that beat expectations.

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. CIBC's wealth management services reported net income up 19 per cent from a year ago to $121 million.

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.

The Canadian dollar was up 0.04 of a cent to 92.16 cents US.

U.S. futures were lower as traders also anticipated the latest reading of American economic growth. It is expected that U.S. second quarter gross domestic product will be revised to 3.8 per cent from four per cent amid weaker than expected business inventories. That is still a big improvement from the first quarter's 2.1 per cent decline that was largely blamed on severe winter weather.

The Dow Jones industrial futures declined 39 points to 17,054, the Nasdaq futures shed 8.8 points to 4,064 and the S&P 500 futures were down 4.5 points to 1,992.5.

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 $10.30 to US$1,293.70 an ounce.

Elsewhere on commodity markets, October crude was unchanged at US$93.88 a barrel and December copper inched a penny lower to US$3.19 a pound.

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Source: Canadian Press DataFile

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