Source: The Canadian Press

The Toronto stock market will likely find pressure from the financial sector at the open after Canada’s biggest bank missed earnings expectations.

However, resource stocks could provide some lift as buyers waded in following a series of losses in oil and metal prices.

U.S. futures pointed to a weak open with the Dow Jones industrial average up one point to 10,048, the Nasdaq futures rose 0.75 of a point to 1,790.5 and the S&P 500 futures ticked 0.4 of a point higher to 1,055.

The quarterly earnings season from the big Canadian banks picked up the pace Thursday as two of the big five institutions reported.

Royal Bank of Canada (TSX:RY) reported its third-quarter net profits fell 18% to $1.28 billion with results pulled down by a weaker capital markets business during a period when performance on equity markets stalled because of worries about the pace of economic recovery.

Diluted earnings per share dropped to 84 cents from $1.05, while return on equity — a broad measure of bank efficiency — fell to 14.3% from 19.4%. Analyst estimates for Royal had forecast a profit of $1.02 per share, according to Thomson Reuters.


National Bank Financial Group (TSX:NA), Canada’s sixth-biggest bank, said net profits fell to $271 million from $303 million for the same period last year. Like the other big banks, performance was held back by a weak showing in the capital markets operations.

National Bank of Canada Q3 profits falls to $271 million


The Montreal-based bank said it earned $1.57 a share excluding extraordinary items for the third quarter ended July 31, which was five cents better than analysts expected.

It has been a mixed start to the banks’ quarterly earnings reports this week. Bank of Montreal (TSX:BMO) reported profits on Tuesday that were up by 20% during the quarter but missed estimates.

And on Wednesday, CIBC (TSX:CM) reported earnings of $640 million Wednesday, which beat expectations and was up 47% from a year ago.

The Canadian dollar moved up 0.3 of a cent to 94.57 cents US.

Meanwhile, commodity prices rose following a series of declines on demand worries. The October crude contract on the New York Mercantile Exchange rose 53 cents to US$73.05 a barrel.

The September copper contract on the Nymex rose six cents to US$3.27 a pound while December gold in New York climbed $2.60 to US$1,243.90 an ounce.

Meanwhile, traders uncertain about the strength of the economy are driving American government bond yields lower.

The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.50% from 2.54% late Wednesday. Its yield is often used to set interest rates on mortgages and other consumer loans.

U.S. long-term bond yields are hovering around levels not recorded since early 2009 when the country was in the depths of the recession and stocks hit 12-year lows.

Investors could get a better idea about the economy with the government’s latest reading on new claims for unemployment benefits due out Thursday.

The Labour Department is expected to report initial claims for unemployment benefits fell by just 10,000 to 490,000 last week, according to Thomson Reuters. That would snap three straight weeks of rising claims, but still fall well short of where claims need to be to indicate significant hiring.

In overseas trading, Japan’s Nikkei 225 stock average advanced 0.7%, China’s Shanghai Composite rose 0.3%, Australia’s S&P/ASX 200 added 0.8% and Hong Kong’s Hang Seng closed 0.1% lower.

London’s FTSE 100 index gained 0.46%, Frankfurt’s DAX gained 0.17% and the Paris CAC 40 was ahead 0.31%.