Mar. 9, 2010 (Baystreet.ca) --
The Toronto stock market found it hard to gain traction Tuesday as commodity prices fell and a better than expected earnings report from Scotiabank failed to encourage buyers.
The S&P/TSX composite index was still behind 20.55 points by the lunch break to 11,943.29.
With a light economic calendar this week, traders are is likely to look to the movements in commodity prices and earnings reports from corporations.
Scotiabank turned in a first-quarter profit of $988-million, up 17% from a year earlier.
Scotiabank said that was the equivalent of 93 cents on a cash basis, five cents a share better than analysts had forecast. Revenue came in at $3.9 billion, also above expectations.
Provisions for credit losses were $371 million, down from $420 million in the prior quarter and its shares were down 37 cents at $49.73. However, its shares have risen over the past week as other banks' earnings reports lifted financials.
Scotiabank was the last of the big banks to report quarterly earnings. All save Royal Bank handed in earnings that beat analyst expectations.
Canada's five biggest banks saw their profits soar in the first quarter compared to a year before when the recession battered away at earnings, raking in a combined $5.09 billion.
Among energy issues, Suncor Energy declined 58 cents to $31.45.
The gold sector was down as Barrick Gold Corp. dropped 35 cents to $49.49 while Kinross Gold Corp. faded 18 cents to $19.18.
The base metals sector eased as May copper slipped a penny to $3.40 U.S. a pound. Teck Resources was down 66 cents to $40.91.
The tech sector was supportive with Research In Motion Ltd. up 70 cents to $76.18. The stock was up about 5% Monday after BMO Capital Markets upgraded the BlackBerry maker to "outperform" from "market perform".
The cautious trading on markets Tuesday came 12 months after the market hit bottom in the depths of the financial crisis, which was sparked by the collapse of the U.S. housing sector. Stocks have surged since hitting multi-year lows on March 9 of last year, with the turnaround starting a day later when U.S. bank Citigroup said it was turning a profit.
Since then, evidence of so-called "green shoots" and signs of a tentative recovery have sent indexes surging. The S&P/TSX composite is up 58% from a year ago.
But the markets have found it harder to gain traction since the beginning of this year as investor expectations have grown, while stocks are seen as more fairly valued now. That means it will take more than just an occasional upbeat economic report or earnings release to send stocks higher.
In other corporate news, Bombardier Inc. has cancelled a plan to buy back up to $550 million U.S. of its outstanding debt securities and issue new notes. The transportation giant said that "current market conditions are such that the offering is unattractive and unsatisfactory to Bombardier at this time." Its shares were down 23 cents to $5.86.
Major Drilling Group International Inc. shares were down 93 cents to $26.99 as the company narrowed its fiscal 2010 third-quarter loss to $4.5 million or 19 cents a share from $5.1 million or 21 cents in the comparable 2009 period. Revenue for the three months ended Jan. 31 was $72.5 million, down from $87.4 million the previous year.
The Canadian dollar progressed 0.23 cents to 97.53 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, 10 were lower at midday. Global base metals were off 0.6%, health-care stocks dipped 0.5% and energy issues trailed yesterday's close by 0.4%.
The gainers were led by information technology and telecoms, ahead 0.2% each, and utilities nosed up 0.1%.
The TSX Venture Exchange gave back 1.17 points to 1,560.76, while the Nasdaq Canada index added 7.23 points to 793.52.
ON WALLSTREET
In New York, stocks churned Tuesday as investors were cautious following several weeks of gains and ahead of some key economic reports due out later in the week.
The Dow Jones industrial average picked up 30.98 points by noon to 10,583.50. The S&P 500 index moved up 3.86 points to 1,142.36, and the Nasdaq composite ran ahead 12.12 points to 2,344.33
Stocks ended little changed Monday after AIG sold its American Life Insurance unit to MetLife in a $15.5 billion U.S. cash-and-stock deal. Typically, such deals would spark a bigger stock market advance, but investors were wary after pushing stocks higher for three of the last four weeks.
Tuesday marked the one-year anniversary of what is widely considered the bear-market low, when the Dow and broader S&P 500 finished at their lowest level in 12 years.
Stocks have recovered since then, but investors remain wary about which way markets will go.
Those concerns caused U.S. stocks to drift Monday. Wall Street finished the session barely changed, although the tech-heavy Nasdaq ended at an 18-month high.
With little in the way of economic news until unemployment claims and retail sales come out later this week, markets will once again take their cues from the commodities markets.
Northrop Grumman pulled out of a bid late Monday to supply the U.S. Air Force with tanker planes, putting Boeing one step closer to snaring the contract that could be worth up to $50 billion U.S.
Merck and French drug maker Sanofi-Aventis announced plans to create one of the world's largest animal health-care businesses.
Treasury prices were static, keeping yields for the benchmark 10-year note at Monday's 3.70%.
The price of a barrel of oil dropped a dime to $81.77 U.S.
Gold prices were flat at $1,124 U.S.