Sign in Subscribe
Banking industry

Markets Mixed as Bank Shares Decline Amid Merger Rumors

Strategic Insights

— 2 min read

Canadian bank shares suffered their steepest two-day decline since January 12 as merger rumors surrounding the banking industry cooled off. The Toronto Stock Exchange 300 composite index fell 10.39 points to 7,754.36, with Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, and Bank of Nova Scotia cutting 35 points from the index. Despite this, earnings expectations remained strong, with First-quarter earnings looking better than a month ago.

Key Takeaways:

  • The Toronto Stock Exchange 300 composite index fell 10.39 points to 7,754.36, with a decline of 35 points attributed to Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, and Bank of Nova Scotia.
  • Bank shares suffered their steepest two-day decline since January 12, with Canadian Imperial Bank of Commerce shares falling $3.20 to $51.80 and Bank of Nova Scotia shares falling $1.90 to $39.60.
  • Earnings expectations remained strong, with First-quarter earnings looking better than a month ago, according to Frank Mersch, vice-president of equities at Altamira Management Ltd.
  • Bonds suffered their biggest decline in six weeks, cutting the value of banks' large bond portfolios and compounding their losses.
  • Gainers led losers by 510 to 508 as 110.2 million shares were traded, valued at $2.5-billion.
  • U.S. stocks were mixed, with drug and computer-related shares rallying, while higher bond yields hurt bank shares.
  • American Express Co. led the drop in the Dow Jones industrial average, after giving up much of the gain it made Friday from takeover speculation.

Statistics:

  • The Toronto Stock Exchange 300 composite index fell 10.39 points to 7,754.36.
  • Bank shares suffered a 35 point decline, with Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, and Bank of Nova Scotia cutting 35 points from the index.
  • Bonds suffered their biggest decline in six weeks, cutting the value of banks' large bond portfolios.
  • Gainers led losers by 510 to 508 as 110.2 million shares were traded, valued at $2.5-billion.
  • U.S. stock trading volume totalled 595 million shares, down sharply from Friday's 672.29 million.

Sources:

  • Bloomberg News
  • Quote from Frank Mersch, vice-president of equities at Altamira Management Ltd.
  • CIBC and TD Bank's plan to amalgamate
  • Pfizer Inc. soars on report of new impotence pill Viagra
  • American Express Co. gives up gain from takeover speculation
  • The Standard & Poor's 500 rises 0.93 points to 1,123.65
  • The Nasdaq composite index climbs 20.54 points to a record 1,887.14
  • Eli Lilly & Co. reports earnings that exceed analysts' forecasts
  • AT&T Corp. reports first-quarter profit of 77 cents a share

Read more