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At midday: TSX up slightly as banks beat estimates

Bank buildings tower over the corner of Bay Street and Adelaide streets in Toronto.

Gloria Nieto/The Globe and Mail

The Toronto stock market advanced Wednesday amid a strong earnings report from Royal Bank and mixed results from key retailers.

The S&P/TSX composite index gained 18.85 points to 14,207.83. The Canadian dollar was off 0.03 of a cent to 90.17 cents (U.S.).

U.S. indexes were slightly higher ahead of the mid-morning release of new home sales figures. Economists think the unusually tough winter conditions will also affect this set of data with sales expected to decline about four per cent to an annualized pace of 398,000. But they also note that the sector is suffering from last year's spike in mortgage rates.

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The Dow Jones industrials was ahead 8.36 points to 16,188.02, the Nasdaq was up 8.71 points to 4,296.3 while the S&P 500 index added 0.61 of a point to 1,845.73.

Royal Bank of Canada says its first-quarter net income was up two per cent from a year ago to $2.09-billion or $1.38 a share. Ex-items, RBC earned $1.47 a share, which was above estimates. The bank also announced its quarterly dividend will increase by six per cent to 71 cents per common share and its shares rose 16 cents to $72.86.

Bank of Montreal and National Bank also issued earnings reports this week that beat expectations.

TD Bank and CIBC issue earnings results Thursday while Scotiabank posts earnings next Tuesday.

The earnings news was mixed in the retailing segment as Sears Canada Inc. had a $373.7-million net profit in its fiscal fourth quarter, up from $39.9-million a year earlier. But the showing was largely due to gains from unusual items including early lease terminations for some large stores that are closing. Revenue fell nearly $129-million or about 10 per cent to just under $1.17-billion. Its shares were unchanged at $13.30.

Target Corp says the massive data breach over the holidays helped push its profit down 46 per cent to $520-million or 81 cents a share, beating estimates by a penny. Revenue fell to $21.5-billion from $22.7-billion and met expectations and its shares ran ahead $2.09 to $58.60 (U.S.) in New York.

Target's results are also being weighed down by its stumbles in its expansion into Canada, its first foray outside the U.S. Its Canadian segment contributed $623-million of sales during the quarter but posted a loss of $329-million, before interest and tax items.

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At home improvement retailer Lowe's, the housing market recovery helped push fiscal fourth-quarter net income up six per cent to $306-million or 29 cents a share. Ex-items, earnings were 31 cents per share, which matched expectations. Revenue rose six per cent to $11.66-billion, slightly missing forecasts of $11.67-billion but its shares ran up $1.44 to $49.55.

On the TSX tech stocks led advancers with CGI Group ahead 48 cents to $36.25.

The base metals group was up 0.7 per cent with March copper unchanged at $3.26 a pound.

The energy sector was the major decliner, down 0.3 per cent with the April crude contract in New York up 56 cents to $102.39 a barrel.

The gold sector was slightly lower while April bullion fell $9.80 to $1,332.90 an ounce.

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