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TSX closes lower financials lead decliners amid sharply lower CIBC earnings

by Malcolm Morrison, The Canadian Press Posted May 29, 2014 6:56 am MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email TORONTO – The Toronto stock market closed lower Thursday amid a poorly received earnings report from CIBC (TSX:CM) and data showing the U.S. economy performing worse than expected earlier this year.However, the market closed well off session lows as energy stocks turned positive and the S&P/TSX composite index moved down just 22.01 points to 14,588.95.CIBC said that poor results in its Caribbean operations were responsible for net income dropping to $306 million from $862 million a year ago. CIBC’s adjusted net income came in at $2.17 per share, beating analysts’ expectations of $2.07 per share and the bank also raised its quarterly dividend by two cents to $1 per common share. However, its shares dropped $1.36 to $97.68.Financials led TSX decliners with all of the major banks, save Scotiabank, giving back some of the gains racked up over the last week as most of the banks delivered strong results.“You’ve seen banks outperform as a group, about three per cent over the last week or so — not surprising we’re having a bit of a profit-taking on them,” said Stephen Lingard, managing director of Franklin Templeton Solutions.“There is a slowing momentum in mortgage products and they’re having to be pretty competitive with each other. But they have had other segments that have offset this, notably wealth (management) and business loans so all in all a good quarter.”The Canadian dollar was up 0.33 of a cent to 92.28 cents US.U.S. indexes were higher as the first revision to first-quarter gross domestic product showed that GDP actually shrank at an annualized rate of one per cent in the period, largely because of severe winter weather. That was much higher than the 0.5 per cent drop that economists had expected, but they anticipate the weakness to be short-lived.The Dow Jones industrials rose 65.56 points to 16,698.74, the Nasdaq climbed 22.88 points to 4,247.95 and the S&P 500 index was ahead 10.25 points at 1,920.03.In other corporate developments, Bank of Nova Scotia (TSX:BNS) is selling more than two-thirds of its interest in CI Financial Inc. (TSX:CIX) in a deal worth at least $2.27 billion, making it one of the largest public offerings in Canada. Scotiabank will sell 72 million common shares of CI at $31.50 per share, reducing its current 37 per cent interest to about 11.4 per cent. CI shares climbed 35 cents to $34 and Scotiabank added 31 cents to $69.13.The debut of shares in Encana Corp. (TSX:ECA) subsidiary PrairieSky was a huge success Thursday. The energy giant earlier in the morning announced the completion of the initial public offering of 52 million common shares of PrairieSky (TSX:PSK) at an offering price of $28 and, by the close, the shares were trading at $37 on the TSX. Encana is spinning off some of its Alberta land holdings through PrairieSky.Elsewhere on the TSX, the base metals sector dropped 0.64 per cent as July copper slipped three cents to US$3.14 a pound.The energy sector was up 0.2 per cent as July crude oil gained 86 cents to US$103.58 a barrel.The gold sector was ahead about 0.45 per cent as August bullion lost $2.60 to US$1,257.10 an ounce.The tech sector was the biggest advancer, up 0.7 per cent as BlackBerry (TSX:BB) jumped 48 cents or 6.06 per cent to $8.40 after CEO John Chen told a conference in California Wednesday that he reckons the chances of turning around the smartphone maker have risen to 80-20. He had previously been placing the recovery odds at 50-50. “I am quite positive that we will be able to save the patient,” Chen said. TSX closes lower, financials lead decliners amid sharply lower CIBC earnings read more