Bank stocks led the TSX to close lower on Wednesday as Royal Bank missed earnings expectations and boosted its provisions for credit losses.
The S&P/TSX composite index fell 23 points, or 0.2 per cent, to close at 12,740. That's a considerable improvement over its low point this morning, when the index was down more than 250 points.
The financial sector, with its 1.2 per cent decline, was the main factor in Wednesday's drop.
Before markets opened, RBC reported a rare earnings miss as it released its first-quarter financial results. The bank also set aside more money for bad loans in the oil and gas sector.
RBC shares slid $1.82 to $67.81.
"While the core earnings were reasonably solid and Royal appears to be taking a more rational stance on its credit outlook, the market rewarded its relative conservatism by punishing its shares," Barclays analyst John Aiken observed.
"Going forward, with its exposure to the energy patch and the Canadian consumer, incremental sustained performance could be challenging," he said.
Shares of all the other big banks were down as well, but to a lesser extent.
In New York, the Dow Jones industrial average rose 53 points, or 0.3 per cent, to close at 16,485. That was a dramatic turnaround from earlier in the day, when it was down 265 points. The Dow began its climb after crude oil futures began to turn higher.
"For the near-term, volatility stays and will hinge on what happens in the crude market," said Ernie Cecilia, chief
investment officer of Bryn Mawr Trust in Devon, Pa.
Oil prices dropped in the morning following the release of U.S. supply data that showed a further increase in stockpiles. But by the end of the trading day in New York, oil futures had turned slightly positive, up 28 cents to settle at $32.15 US a barrel.
The Canadian dollar rose 0.43 cents US to close at 73.06 cents US.
April gold futures jumped $16.40 to settle at $1,238.70 US an ounce.