The Canadian Press

Malcolm Morrison

The Toronto stock market closed higher Thursday with the help of a good lift from the financial sector after earnings from two of the big Canadian banks beat expectations, which helped take investors’ minds off growing worries about European debt and poor U.S. economic data.

The S&P/TSX composite index got off to a negative start, falling about 100 points in the early going but ended closing up 109.61 points at 11,631.44.

Concerns that Greece will struggle to cut its budget and get debt problems under control were again worrying investors after Standard & Poor’s said the country’s credit rating could be cut one to two notches within a month.

A two-notch downgrade would take S&P’s rating on Greece to BBB-, the lowest level accepted by the European Central Bank as collateral for loans. Moody’s current rating on Greece is A2, although that may be lowered soon.

“It’s not surprising they’re talking about downgrading the banks and so on and downgrading Greece,” said Norman Raschkowan, chief investment officer, Mackenzie Financial Corp.

“I think what’s interesting is that the credit rating agencies — in part because of all the problems during the credit bubble — they’re being much more diligent in saying, `Well it doesn’t make sense to have a company rated higher than the country in which it is resident’ and especially if its business is so tied to that country.”

The new round of worry pushed the U.S. dollar higher and the Canadian dollar down 0.48 of a cent to 94.4¢ US.

The financial sector was up 1.08%. Canadian Imperial Bank of Commerce (TSX:CM) shares rose $2.13 to $69.95 after it reported its fiscal first-quarter profit was $652 million or $1.58 per diluted share, up from $147 million or 29¢ per share a year ago.

Revenue also grew by about $1 billion to $3.06 billion. The provision for credit losses of $365 million was up from $278 million a year ago — but provisions were down from the previous quarter.

National Bank Financial Group (TSX:NA) shares gained $1.12 to $59.73 as it reported net income of $215 million or $1.22 per share for the first quarter, up from a year-earlier profit of $69 million or 36¢ per share. Revenues totalled $1.08 billion, up 23% from $876 million last year.

“CIBC and National results exceeded the consensus so now it’s getting everybody more optimistic about what the bank numbers might look like,” Raschkowan said.

The gold sector was the biggest percentage gainer, up 3.15% as the April bullion contract on the Nymex ticked $11.30 higher to US$1,108.50 an ounce. Barrick Gold Corp. (TSX:ABX) was ahead 98¢ at C$39.69 and Goldcorp Inc. (TSX:G) rose $1.43 to C$39.79.

The industrials sector rose 1.05%. Bombardier Inc. (TSX:BBD.B) shares jumped 39¢ to $5.87 after the transportation company received a firm order for 40 of its new CSeries airliners. The contract with Republic Airways Holdings Inc. of Indianapolis is valued at about US$3.06 billion.

The stronger greenback also depressed oil prices with the April crude contract on the New York Mercantile Exchange down $1.83 to US$78.17 a barrel. On the TSX, the energy sector was flat. EnCana Corp. (TSX:ECA) was ahead $1.12 at C$59.73 while Husky Energy (TSX:HSE) gave back 31¢ to C$26.84.

The base metals sector was up 1.05% as May copper dipped 4¢ to US$3.21 a pound. Teck Resources (TSX:TCK.B) advanced 71¢ to C$39.04, while Equinox Minerals (TSX:EQN) stepped back 5¢ to C$3.33.

Elsewhere, auto parts giant Magna International (TSX:MG.A) reported a net loss of US$139 million or $1.25 per share, an improvement on a year-earlier loss of US$148 million or $1.33 per diluted share. The Ontario-based company’s overall sales grew to US$5.4 billion from $4.8 billion, with most of the growth coming in Europe. Its shares shook off early losses and were up 21¢ at C$60.62.

The TSX Venture Exchange moved 1.47 points lower to 1,517.94.

New York markets were lower as jobless insurance claims rose by 22,000 to a seasonally adjusted 496,000. Economists polled by Thomson Reuters had forecast a drop in claims to 455,000. It was the second straight week that such claims have unexpectedly jumped.

And the U.S. Commerce Department said that durable goods orders rose 3% in January because of a jump in commercial aircraft orders. But orders fell by 0.6 excluding volatile transportation orders. Economists had been expecting those orders to rise one%.

@page_break@The Dow Jones industrial average was down 53.13 points at 10,321.03. The Nasdaq composite index lost 1.68 points to 2,234.22 and the S&P 500 index fell 2.3 points to 1,102.94.

In other earnings news, Tim Hortons Inc. (TSX:THI) handed in net income of $91 million, or 51¢ per diluted share, in the fourth quarter — up 32% from last year. Revenue increased by 9.2% to $615.3 million. Its shares added 24¢ to $32.26 as it also increased its dividend rate, with the quarterly payout rising by 30% to 13¢ per common share.

Uranium miner Cameco Corp. (TSX:CCO) reported fourth-quarter net earnings of $598 million, or $1.52 per share, compared to $31 million, or 8¢ per share, in the fourth quarter of 2008. The significantly higher net earnings were primarily due to the sale of its stake in Centerra Gold (TSX:CG), resulting in an after-tax gain of $374 million. Its shares fell 35¢ to $29.42.

SFK Pulp Fund (TSX: SFK.UN) units tumbled 37¢ or 25.52% to $1.08 as lower pulp prices helped push the company to a $15.7-million loss in the latest quarter, compared with a profit of $3.96 million a year ago.