TORONTO - The Toronto stock market closed little changed Wednesday as investors balanced disappointing earnings from CIBC (TSX:CM) with oil prices pushed lower by demand concerns.
The S&P/TSX composite index inched 8.36 points lower to 10,912.17.
A day after a better than expected earnings report from Bank of Montreal (TSX:BMO) sent the TSX up 131 points, CIBC disappointed investors with net earnings of $434 million or $1.02 per share for the quarter ended July 31, up sharply from profits of $71 million or $1.02 per share booked a year ago.
But the bank's adjusted earnings came in at $1.36 per share, three cents short of forecasts from Thomson Reuters.
The shortfall came as provision for bad loans totalled $547 million, up sharply from $203 million in the same quarter a year ago and CIBC shares were down $3.64 or 5.3 per cent to $65.01.
"Everybody had expected that loan loss provisions would really be very much smaller in this quarter and theirs were huge," said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.
"And at this point, they have a larger exposure to credit cards than most of their peers, and that's the area where they had the biggest problem."
Damage in the financial sector was largely limited to CIBC. TD Bank (TSX:TD), Royal Bank (TSX:RY) and Scotiabank (TSX:BNS) report earnings Thursday.
The energy sector was flat as the October crude contract on the New York Mercantile Exchange dropped 62 cents to US$71.43 a barrel even as a report showed U.S. crude inventories rose by a far less than expected 200,000 barrels last week.
The Canadian dollar continued to lose ground in the wake of a warning by the Bank of Canada that it is prepared to intervene to ensure the Canadian dollar doesn't continue its recent rise and possibly derail an economic recovery. The currency closed down 1.01 cents to 91.09 cents US after falling three quarters of a cent on Tuesday.
"While it does not appear that the BOC will step in to stem the strength of the Canadian dollar at current levels, they are certainly giving the market a 'shot across the bow'," observed John Curran, senior vice-president at Canadian ForEx.
"When central banks speak it is usually prudent to pay attention."
The TSX Venture Exchange gained 2.42 points to 1,186.09.
U.S. markets were also listless despite data showing that new U.S. home sales surged 9.6 per cent in July, rising for the fourth straight month.
In New York, the Dow Jones industrial average added 4.23 points to 9,543.52 as the housing report showed that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000.
It was the strongest sales pace since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units. The median sales price of US$210,100, however, was still down 11.5 per cent from a year earlier.
The Nasdaq composite index added a fifth of a point to 2,024.43 while the S&P 500 index inched up 0.12 of a point to 1,028.12.
Another report from the U.S. Commerce Department said durable goods orders jumped 4.9 per cent in July, the biggest increase since 2007. However, orders excluding transportation goods grew at 0.8 per cent, just below economists' expectations.
After a lengthy run-up in stocks, with little break, investors are unsure how much further the market can go without seeing actual economic growth.
Matt King, chief investment officer at Bell Investment Advisors in New York said much of the improving economic data has already been factored into stocks.
"We're just moving on momentum more than anything else," he said.
The TSX tech sector was the strongest group, up 0.7 per cent as Celestica (TSX:CLS) improved 22 cents to $9.61.
Other commodity prices were mixed with the December gold contract down 20 cents to US$945.80 an ounce while September copper was off a tenth of a cent at US$2.857 a pound.
The gold sector was flat while the base metals sector moved down 1.12 per cent with Teck Resources (TSX:TCK.B) down 36 cents to $27.58.
In other corporate news, chancellor Angela Merkel said Wednesday that Germany's talks with General Motors Co. over the future of its Opel unit are focused on Berlin's preferred bid, by Canadian auto parts giant Magna International Inc. But she has softened her insistence that the deal be reached swiftly, saying substance -- not speed -- was paramount. Magna shares were ahead $1.51 to $51.08
Shares in Eldorado Gold Corp. (TSX:ELD) lost 58 cents to $11.38 after it said Wednesday it has reached a deal to acquire all remaining shares of Australia's Sino Gold Mining Ltd., a company with interests in China. The all-stock deal is valued at $2 billion.