* TSX rises 0.19 percent to 10,941.74
* CIBC drops, other banks higher
* U.S. housing data prompts market reversal
By Ka Yan Ng
TORONTO, Aug 26 (Reuters) - Toronto's main stock index turned higher on Wednesday after U.S. housing data prompted investor optimism, overriding lower-than-expected quarterly profit from Canadian Imperial Bank of Commerce (CM.TO) that initially weighed on the hefty financials group.
U.S. single-family home sales rose for a fourth straight month in July to set their fastest pace since last September, buoying optimism about the economic recovery in the United States. [ID:nN26261432]
"We saw the Dow move up on that, and the TSX will probably follow. It looks like the market, at least temporarily, likes them," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
At 10:30 a.m. (1430 GMT), the S&P/TSX composite index .GSPTSE was up 21.21 points, or 0.19 percent, at 10,941.74. Seven of 10 sectors were higher.
The index fell sharply at the open on the CIBC news [ID:nN24133906] and other banks initially weakened as well, handing back gains made on the back of Bank of Montreal's surprisingly solid third-quarter report on Tuesday.
By midmorning, CIBC, the top influential decliner, was the only Big Five bank that was lower. CIBC, which also said it set aside more money to cover bad loans and credit-card delinquencies, dropped 5.2 percent to C$65.05. It had dropped nearly 10 percent in the first moments of the trading session.
"Their forward looking statements were a little tepid. But there weren't any huge nasty surprises which is kind of the silver lining," Ibel said.
On the flip side, Royal Bank of Canada (RY.TO) was up 0.9 percent at C$53.25. Overall, financials were up 0.09 percent.
The price of oil fell towards $71 a barrel, adding pressure to the resource-heavy index as the energy group fell 0.1 percent. Materials were off 0.08 percent. (Editing by Jeffrey Hodgson)