Continued relief on the oil front helped keep U.S. markets in the black Tuesday morning, but pushed Toronto stocks lower.

Toronto’s S&P/TSX composite index struggled to hold on to early gains, ending the morning more or less where it started the day. At midday, it was up 2.95 points or 0.04% at 8318.42, while the TSX Venture Exchange was off 5.34 points or 0.35% at 1,512.18.

In New York, the Dow Jones industrial average was slipping back after morning gains; it was ahead just 12.75 points, or 0.13 to 10085.8. The Standard & Poor’s 500 index was down 0.78 of a point or 0.07% at 1,094.9, while the Nasdaq composite index was off 6.36, or 0.35% to 1832.34.

The Canadian dollar was up 0.29 of a cent to US76.74¢.

Oil prices traded lower for the third straight day after setting a series of record highs. Light crude oil for October delivery traded down 27¢ at US$45.78 a barrel in trading in New York.

Energy and gold stocks held back Bay Street. Energy issues were off 0.64% as oil prices continued to drift lower; gold stocks were down 1.73% after news Statistics Canada reported a slight drop in the consumer price index.

Bank stocks, meanwhile, were one of the few sub-indices in the black. They were up 0.96% as a whole in morning trading as the big banks began reporting third-quarter results. First off the mark was Bank of Montreal, which said its Q3 earnings were up 30% to $654 million, prompting the bank to boost its dividends and full-year outlook. BMO shares were up 2.28%. Most of the TSX financials sector was ahead, including TD Bank up, 2.31% and CIBC, up 1.54%.

In economic news, Statistics Canada reported that the annual inflation rate dipped to 2.3% in July, from 2.5% in June. But the core rate, which excludes most volatile food and energy prices, rose to 1.9% from 1.7% in June. That increase was widely expected and could add to pressures on the Bank of Canada to begin nudging up interest rates in early September.

The C$ dollar ignored the inflation figures but instead got a boost from Bank of Canada comments late Monday that suggested a September rate hike.

Analysts agreed a hike appears to be in the offing.
“[Monday] night, Bank of Canada Deputy Governor Longworth reiterated that the central bank would be tightening soon, but was, as usual, vague on timing and magnitude,” BMO Nesbitt Burns Inc. chief economist Sherry Cooper said in a report Tuesday. “Other things equal, today’s 1.9% core CPI points to a September move because inflation is running too close to the 2% target (although the Bank believes it could drift down closer to 1.5% over the remainder of this year).”

In overseas markets, London’s FTSE 100 was up 13.7 points at 4,419.0. Frankfurt’s DAX 30 was up 0.66%, while the CAC 40 was up 0.45% in Paris.

Tokyo’s Nikkei Stock Average of 225 issues rose 24.36 points, or 0.22%, to 10,985.33. High-technology shares including Canon, Kyocera, Sony and Matsushita ended higher as did automakers Nissan and Toyota.

In Hong Kong, the key Hang Seng Index rose 214.72 points, or 1.72%, to 12,646.49. Brokers said prices were boosted by Monday’s government announcement that renewed domestic demand and rising import prices have snapped nearly six years of deflation in Hong Kong.