TSX closes higher: TD, CIBC beat expectations, traders look to Yellen comments

TORONTO – Solid bank earnings helped lift the Toronto stock market to a modest gain on Thursday.

Traders also took in remarks from U.S. Federal Reserve chair Janet Yellen, who said it’s too early to tell how badly adverse winter weather is affecting the American economy.

The S&P/TSX composite index climbed 26.16 points to 14,214.74 as CIBC (TSX:CM) posted quarterly net income of $1.18 billion, up nearly 50 per cent from a year ago and partly due to the sale of half its Aeroplan credit card business to TD Bank (TSX:TD).

Ex-items, CIBC’s earnings were up 6.3 per cent to $951 million or $2.31 a share, 15 cents better than estimates.

TD had $2.04 billion of net income in the first quarter, up 14 per cent from a year earlier. Adjusted net income was $2.02 billion, or $1.06 per common share, two cents ahead of estimates.

TD hiked its dividend by nine per cent to 47 cents per share while CIBC’s will be going up about two per cent to 98 cents per share. TD shares rose 34 cents to $49.76 while CIBC gained 88 cents to $91.47.

“No qualms about them,” said Ian Nakamoto, director of research at 3MACS.

“They have a tendency (to beat expectations) and that’s exactly what they did.”

The Canadian dollar was off 0.06 of a cent at 89.8 cents US.

New York indexes advanced while traders also digested data showing that orders for durable goods declined by a better than expected seasonally adjusted one per cent in January compared with December.

The Dow Jones industrials gained 74.24 points to 16,272.65, the Nasdaq was up 26.87 points at 4,318.93 while the S&P 500 index edged up 9.14 points to another record close of 1,854.4.

Yellen, during a question and answer session before the Senate’s banking committee, noted that “a number of data releases have pointed to softer spending than many analysts had expected.”

“Part of that softness may reflect adverse weather conditions, but at this point it is difficult to discern how much,” she said.

In other earnings news, Maple Leaf Foods (TSX:MFI) gained 44 cents to $16.33 even as it reported an adjusted quarterly operating loss of $21.7 million or 25 cents a share, a big miss from the six cents a share of adjusted profit that analysts had estimated.

The tech sector led advancers, up 0.79 per cent with BlackBerry (TSX:BB) ahead 20 cents to $11.68.

The financial sector gained 0.52 per cent as the TD and CIBC earnings added to solid reports from earlier in the week from Royal Bank (TSX:RY), National Bank (TSX:NA) and Bank of Montreal (TSX:BMO).

The base metals sector was up 0.39 per cent as May copper lost one cent to US$3.20 a pound.

A major decliner was Taseko Mines (TSX:TKO) after the federal government again rejected its proposed $1.5-billion, open-pit gold-copper mine in British Columbia’s Interior over environmental concerns. Its shares fell 12 cents or 5.06 per cent to $2.25.

The gold sector was flat as April bullion gained $3.80 to US$1,331.80 an ounce.

The energy sector was the leading decliner, down 0.35 per cent as the April crude contract in New York dipped 19 cents to US$102.40 a barrel.