Banks at Records Keep Canada Stocks Afloat as Industrials Slump

  • Toronto-Dominion Bank teams with Ameritrade on Scottrade bid
  • Canadian Pacific Rail extends losses after profit target cut

TSX Movers: Mullen Group, Altagas, Dominion Diamond

Canadian stocks ended mixed as the nation’s biggest lenders -- Royal Bank of Canada and Toronto-Dominion Bank -- the nation’s largest lenders, extended highs to offset a slump in railroads.

The S&P/TSX Composite Index was up slightly at 14,848.24 at 4:000 p.m. in Toronto, after a three-day advance that took the Canadian equity benchmark to its highest since June 2015. Rallies among energy producers and miners have propelled the gauge to a 14 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.

Financial services, which account for a third of the S&P/TSX Composite Index, gained 0.2 percent to lead an advance in five of the 11 industries in the broader index. Royal Bank added 0.5 percent for a fourth day of gains, while Toronto-Dominion is on a six-day winning streak, extending records for both stocks. Toronto-Dominion reportedly teamed with TD Ameritrade Holding Corp. and made a joint, non-binding offer for St. Louis brokerage firm Scottrade earlier this month, according to people familiar with the situation.

The Bank of Canada maintained the benchmark interest rate at 0.5 percent yesterday and reduced Canada’s growth profile in large part because of slower housing markets and a lower trajectory for exports. The European Central Bank Thursday kept its rates unchanged and signaled that it may extend its stimulus program beyond the planned March end.

Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

Canadian Pacific Railway Ltd. lost 2 percent to lead a 0.7 percent drop in industrial stocks, the biggest laggards in the S&P/TSX. The railway operator retreated a second day after cutting its profit target for the year Wednesday due to falling revenue from commodities.

Raw-materials producers gained 0.5 percent and energy companies added 0.2 percent Thursday even as prices for gold, copper and crude retreated. Barrick Gold Corp. slipped 0.8 percent while Goldcorp Inc. added 1.2 percent. Oil declined from a 15-month high as investors weighed conflicting signals from OPEC members on their readiness to reduce production, ahead of a key November meeting. The group’s October rise is now at 3.8 percent.

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