Canada's main stock index lost ground on Wednesday, weighed by a sharp fall in shares of Bank of Montreal (BMO.TO) after it reported disappointing earnings, with investors also shying away from other major banks ahead of their quarterly results.

Bank of Montreal fell 3.3 per cent to $91.98 after reporting profits which were slightly below expectations, hit by a decline in income in the United States.

"That took the financials down" on fears that other big banks might also release less rosy earnings, said Paul Gardner, a portfolio manager at Avenue Investment Management.

The heavyweight sector, which accounts for a third of the index's weight, ended 0.8 per cent lower.

Royal Bank of Canada (RY.TO), Canadian Imperial Bank of Commerce (CM.TO) and Toronto-Dominion Bank (TD.TO) are all due to report on Thursday, and all fell between 0.6 per cent and 0.8 per cent.

Home Capital Group Inc (HCG.TO), Canada's biggest non-bank lender, lost 2.7 per cent to $8.99 after saying late on Tuesday it had drawn down an additional $250 million from a high interest credit line.

The Toronto Stock Exchange's S&P/TSX composite index settled down 57.45 points, or 0.37 per cent, at 15,419.49.

The energy sector fell one per cent, which Gardner tied to supply concerns following news earlier this week that Donald Trump's White House plans to sell half of the country's strategic petroleum reserves.

Overall, decliners outnumbered advancers by a 1.4-to-1 ratio.

The Bank of Canada held interest rates steady as expected, saying that while economic growth was likely to moderate in the second quarter, government measures to rein in the housing market have not yet had a substantial effect.

In comments following its earnings release, a Bank of Montreal executive said Canada's fourth-biggest lender was starting to see signs of a softening in Toronto's housing market.

U.S. MARKETS

U.S. stocks ended up slightly on Wednesday, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve's latest meeting showed policymakers view a rate hike coming soon.

But, according to the May 2-3 meeting minutes, they also agreed they should hold off on raising interest rates until they knew a recent U.S. economic slowdown was temporary.

Stocks were volatile following the minutes' release, but eventually added to small earlier gains. The S&P financial index , which fell right after the minutes came out, rebounded to end down just 0.04 percent. Banks tend to benefit from higher borrowing rates.

"Absent a material slowdown in the economy, Federal Reserve officials, acknowledging support from strengthening global growth, appear poised to stay on track toward interest rate normalization," said Quincy Krosby, chief market strategist at Prudential Financial, based in Newark, New Jersey.

The Dow Jones Industrial Average was up 74.51 points, or 0.36 per cent, to 21,012.42, the S&P 500 gained 5.97 points, or 0.25 per cent, to 2,404.39 and the Nasdaq Composite added 24.31 points, or 0.40 per cent, to 6,163.02.

It was also a fifth straight day of gains for the S&P 500.

Following the Fed minutes' release, traders scaled back bets on two more rate increases by the end of 2017.

Federal funds futures implied traders saw about a 46 percent chance the U.S. central bank would raise rates twice more by year-end, down from roughly 50 per cent late on Tuesday, according to CME Group's FedWatch program.

Fed policymakers also discussed at length the reasons for the first-quarter slowdown. While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen.

"One thing that struck me a bit was that they registered confidence in the consumer was pretty healthy, and that's significant," said Michael Purves, chief global strategist at Weeden & Co.

Among the day's gainers, Intuit jumped 6.7 per cent after the tax-preparation software maker posted a profit topped estimates and also raised its revenue forecast.

The retail sector issued more results that disappointed.

Lowe's dropped three per cent after the home improvement chain reported a lower-than-expected profit and comparable sales.

Jewelry retailer Tiffany sank 8.7 per cent after posting a surprise drop in comparable sales. Signet Jewelers , which reports on Thursday, was down 7.2 per cent. The two were the biggest losers on the S&P.

About 6.1 billion shares changed hands on U.S. exchanges, below the 6.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 99 new highs and 57 new lows.