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Strong Bank Earnings, But Lower Market Close

The Toronto stock market closed lower Friday with buyers inclined to do little at the end of a negative week despite a strong earnings report from American banking giant JP Morgan. The S&P/TSX composite index eased 31.91 points to 12,202.04 while the TSX Venture Exchange was 7.13 points lower at 1,292.81. The Canadian dollar closed down 0.07 of a cent at 102.11 cents US.  New York markets were also listless after JPMorgan handed in a record quarterly profit of US$5.7 billion; up 34% from a year ago as the bank set aside less money for bad loans. Earnings were $1.40 per share, far exceeding the $1.21 predicted by analysts. Revenue rose 6% to $25.1 billion, beating expectations of $24.4 billion. Traders also took in better-than-expected earnings from U.S. bank Wells Fargo. It posted third-quarter earnings per share of 88 cents, beating estimates by a penny.

Indexes also failed to find support from a strong consumer confidence reading.  The Dow Jones industrials added 2.46 points to 13,328.85 as the University of Michigan’s index for October came in at 83.1, up from 78.3 in September.  The TSX ended the week down 217 points or 1.74% in the wake of a gloomy assessment of the global economy by the International Monetary Fund, which reduced its growth forecast for the world economy to 3.3% this year from its previous estimate of 3.5%. Still, the TSX is up about 7.5% from the market lows of early June, largely because of a commitment from European Central Bank president Mario Draghi to do whatever it takes to preserve the monetary union and another round of quantitative easing by the U.S. Federal Reserve.

“There had to be a letdown and we are getting it,” said Pat McHugh, senior managing director and Canadian equities strategist at Manulife Asset Management.


Market Update as of October 12 2012

The TSX closed at 12202, down -217 points or -1.75% over the past week. YTD the TSX is up 2.07%.

The DOW closed at 13329, down -281 points or -2.06% over the past week.YTD the DOW is up 9.09%.

The S&P closed at 1429, down -32 points or -2.19% over the past week.YTD the S&P is up 13.59%.

The Nasdaq closed at 3044, down -92 points or -2.93% over the past week.YTD the Nasdaq is up 16.85%.

Gold closed at 1756, down -27.00 points or -1.51% over the past week.YTD gold is up 12.20%.

Oil closed at 93.51, up 2.01 points or 2.20% over the past week.YTD oil is down -5.45%.

The USD/CAD closed at 0.9794, up 0.0006 points or 0.06% over the past week.YTD the USD/CAD is down -0.04%.   


Sources: Bloomberg; advisor.ca; Manulife