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TSX Flat Amid Bank Earnings, Data - Canadian Commentary


Canadian stocks were little changed Thursday morning amid a mixed batch of earnings reports and macroeconomic data. A report from the US Commerce Department revealed that the economy grew at a slowest pace in nearly two years, while the Labor Department said that first-time claims for unemployment benefits fell by much more than anticipated last week.

The European markets are in positive territory, after European Central Bank President Mario Draghi indicated that monetary stimulus would be continued. Draghi indicated that the central bank is in no hurry to exit stimulus as he anticipates inflation to come significantly below the bank's target this year, giving room for maintaining an accommodative monetary stance.

The S&P/TSX Composite Index edged down 2.72 points or 0.02 percent to 12,729.67.

Among financial stocks, Royal Bank (RY.TO) gathered around 0.50 percent after reporting improved first-quarter net income at C$2.045 billion or C$1.36 per share compared to C$1.830 billion or C$1.22 per share in the same quarter last year. Analysts expected the bank to report earnings of C$1.31 per share for the quarter.

CIBC (CM.TO) shed over 1 percent after reporting lower first-quarter net income of C$796 million or C$1.91 per share compared with C$832 million or C$1.93 per share for the same quarter last year. Excluding items, adjusted earnings per share were C$2.15, compared with adjusted earnings per share of C$1.97 a year ago. Analysts expected the bank to report earnings of C$2.08 per share for the quarter.

TD Bank (TD.TO) slipped 0.40 percent even after posting higher first-quarter net income of C$1.79 billion or C$1.86 per share compared with last year's C$1.48 billion or C$1.55 per share. Adjusted net income for the period stood at C$1.92 billion or C$2.00 per share. Analysts expected earnings per share of C$1.92 for the quarter.

Information solutions provider MacDonald Dettwiler (MDA.TO) gained 0.60 percent after reporting fourth-quarter net earnings of C$12.6 million or C$0.40 per share compared with C$29 million or C$0.91 per share last year. Excluding items, operating earnings for the quarter totaled C$40.6 million or C$1.27 per share, compared with C$31 million or C$0.97 per share a year ago. Analyst estimated earnings of C$1.14 per share

Research In Motion (BB.TO) moved up over 2 percent.

The price of crude oil was ticking down Thursday morning amid a generally steady U.S. dollar, with traders awaiting more cues from the next round of talks, scheduled for March 18, between Iran and world powers over the Middle East country's controversial nuclear program. Crude for April edged down $0.48 to $92.28 a barrel.

In the oil patch, Baytex Energy Corp. (BTE.TO) and Niko Resources (NKO.TO) shed around 2 percent each.

The price of gold was extending losses Thursday morning on profit taking, with the U.S. dollar and equity markets steady despite euro zone worries. Gold for April delivery shed $9.50 to $1,586.20 an ounce.

Among gold space, Agnico-Eagle Mines (AEM.TO) and Detour Gold (DGC.TO) lost around 1 percent each.

In economic news, Statistics Canada said the nation's current account deficit, on a seasonally adjusted basis, decreased $0.8 billion to $17.3 billion in the fourth quarter. However, the reduction to the goods deficit was partially offset by the increase of the investment income deficit.

Separately, the agency said the Industrial Product Price Index remained at the same level in January as in December. Lower prices for chemical products largely offset gains elsewhere, including an advance in petroleum and coal products. Meanwhile, the Raw Materials Price Index rebounded with a 3.8 percent gain, mostly because of higher prices for crude oil.

From the U.S, a report released by the Commerce Department on Thursday said GDP increased at an annual rate of 0.1 percent in the fourth quarter compared to the 0.1 percent drop that was originally reported. Economists had been expecting a more substantial upward revision, with the consensus estimate calling for the revised report to show 0.5 percent growth.

Separately, the Labor Department said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000. Economists had expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.

Elsewhere, inflation in the euro area, as per the harmonized index of consumer prices, weakened in January as estimated earlier, final data from statistical office Eurostat showed. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in January, after rising 2.2 percent in December. The latest figure matched preliminary estimates.

German unemployment declined unexpectedly by 3,000 in February from the prior month, the Federal Labor Agency said. However, the jobless rate held steady at 6.9 percent in February, above the consensus forecast to 6.8 percent.

Germany's EU harmonized inflation slowed less than economists expected in February, latest data showed. Inflation as per the harmonized index of consumer prices dropped to 1.8 percent in February from 1.9 percent in January, preliminary data from the Federal Statistical Office showed. Economists had forecast a faster deceleration to 1.7 percent.

by RTTNews Staff Writer

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