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Traders work on the floor of the New York Stock Exchange. (Henny Ray Abrams/AP)
Traders work on the floor of the New York Stock Exchange. (Henny Ray Abrams/AP)

At midday: Stocks cling to gains Add to ...

The Toronto Stock Exchange was in positive territory at midday Thursday as commodity prices gained ground on expectations China may move to stimulate its economy.

The S&P/TSX composite index added 55.66 points to 12,288.52 after closing lower Wednesday as commodities dropped amid protests over austerity measures expected to be announced in Europe. The TSX Venture Exchange rose 3.64 points to 1,310.5.

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The Canadian dollar gained 0.21 of a cent to 101.71 cents U.S.

Wall Street was also higher, with the Dow ahead 18.97 points to 13,432.48 and the Nasdaq 14 points higher at 3,107.7. The broader S&P 500 was up 5.23 points at 1,438.55.

The gains came amid expectations the People’s Bank of China will soon take more steps to stimulate the world’s No. 2 economy, which has been slowing.

There was also a bit of respite in Europe as Greek officials said Thursday that after weeks of fruitless efforts, the heads of the three parties in Greece’s governing coalition have struck a basic deal on a new round of austerity measures required for the country to continue getting vital rescue loans.

Worries about a slowing Chinese economy have combined with unrest in Europe to pressure the market this month.

And even as those worries persist, and the U.S. continues to churn out mixed economic data, sentiment will likely be buoyed into Friday, the last trading day of the third quarter, said Sadiq Adatia, chief investment officer at Sun Life Global Investments.

“I think people do want to buy some good names heading into Q4 and want to show that on their books ... I think they’re actually jumping in in anticipation of what’s going to happen in Q4,” Adatia said.

“You’ve seen a little bit of a sell off in the past few days ... but I think they’re going to be back to slowly buying up things and moving this marker a little higher up.”

The benchmark New York oil contract was ahead $1.39 at US$91.37 a barrel, while the December gold contract added $14.50 to US$1,768.1 an ounce. The December copper contract was unchanged at US$3.71 a pound.

Though the mood in markets has improved modestly, investors remain concerned about Greece and Spain where there have been violent protests against debt reduction measures due to be announced this week.

Spain has come under pressure to tap a bond-buying program from the European Central Bank that has been partly designed to keep a lid on the country’s borrowing costs, but the government has been reluctant to request the help for fear of the conditions attached.

Investors were also reacting to a positive sign in a U.S. Commerce Department report on August business orders for durable goods. While the overall number dropped because of a huge decline in commercial aircraft orders, orders for machinery, electronics and other equipment, rose 1.1 per cent, the first increase since May.

However, a less positive sign came in another report from the Commerce Department which said the U.S. economy grew even more sluggishly in the April-to-June quarter than previously thought.

The agency revised the annual growth rate to 1.3 per cent, down from its previous estimate of 1.7 per cent. The revision mainly came as a result of slashing estimates for crop production by $12 billion, reflecting the drought that battered farms this summer.

Meanwhile, the number of Americans who signed contracts to buy previously occupied homes fell in August from a two-year high in July.

Investors also got word from the U.S. Labour Department that the number of Americans seeking unemployment benefits last week plunged to the lowest level in nine weeks, a hopeful sign for the job market.

In Canada, traders took in a Statistics Canada report that the average weekly earnings for non-farm payroll employees was $906.68 in July, up 1.1 per cent from the previous month.

In Canadian corporate news, a glimpse into the state of struggling BlackBerry maker Research In Motion (TSX:RIM) will be revealed when the company releases its second-quarter financial results after markets close. Shares rose six cents, to $6.94.

And eye drug developer QLT Inc. (TSX:QLT) said Thursday it plans to buy back up to 3.4 million of its shares over the next year as the first step in a plan to return $100 million to stockholders. The plan follows the sale by QLT earlier this week of Visudyne, its flagship drug, to Valeant Pharmaceuticals Inc. (TSX:VRX) for $112.5 million. Its shares rose seven cents to $7.80.

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