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A trader works on the floor of the New York Stock Exchange (NYSE) March 1. (Brendan McDermid/Reuters)
A trader works on the floor of the New York Stock Exchange (NYSE) March 1. (Brendan McDermid/Reuters)

At midday: Financial stocks lead TSX higher Add to ...

Canada’s main stock index rose on Tuesday, led by financial shares after the country’s third largest bank reported a rise in quarterly profit, while domestic data revealed the economy grew more than expected in the fourth quarter.

Bank of Nova Scotia rose 4.4 per cent to $57.18 after it reported a 5-per-cent increase in first-quarter net income, helped by growth in its international banking business.

Canadian GDP tops estimates, sends loonie higher (BNN Video)

Royal Bank of Canada added 1.8 per cent to $70.33, while Toronto-Dominion Bank was up 1.5 per cent at $53.22. The overall financials group gained 1.8 per cent.

The energy sector advanced 0.7 per cent as oil prices rose to a two-month high. It included a 1.1-per-cent increase for Suncor Energy Inc to $33.43.

TransCanada Corp inched up 0.7 per cent to $50.02 after Quebec said it was seeking an injunction to compel the company’s proposed Energy East oil pipeline to be reviewed under the province’s environmental laws.

Maple Leaf Foods Inc jumped more than 8 per cent to $24.65 after the Canadian pork processor posted a better-than-expected fourth-quarter profit as margins in its prepared meats business improved.

At 11:39 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index increased 121.7 points, or 0.95 per cent, to 12,982. Eight of the index’s 10 main groups were higher.

The Canadian economy slowed substantially in the final quarter of last year, but the 0.8-per-cent annualized increase in gross domestic product topped both economists’ and policymakers’ expectations for zero growth.

Valeant Pharmaceuticals International Inc was the biggest drag on the index for a second consecutive day. It said on Monday it is under investigation by the U.S. Securities and Exchange Commission.

The company’s shares fell 10.8 per cent to $84.25, having hit its lowest since May 2013 at $83.

Gold stocks also fell, including a 4.8-per-cent drop in Barrick Gold Corp to $17.89.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 1.6 per cent.

Wall Street were at session highs on Tuesday morning, led by financial and technology stocks, after strong U.S. factory and construction data suggested the economy was regaining momentum after slowing in the fourth quarter.

While manufacturing activity contracted in February, steadying new orders growth and improving inventories offered signs of stability. Construction spending in January surged to the highest level since 2007.

“Things were never as bad as we thought they were and now we’re realizing it,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Mass.

The encouraging data will factor into the U.S. Federal Reserve’s decision, when they deliberate on further raising interest rate hikes.

While Fed Chair Janet Yellen has hinted at continuing with the central bank’s plan to raise rates gradually through the year, other policymakers are calling for a pause amid the turmoil in global financial markets and slowing global growth.

The Dow Jones industrial average was up 225.51 points, or 1.37 per cent, at 16,742.01.

The S&P 500 was up 29.8 points, or 1.54 per cent, at 1,962.03 and the Nasdaq Composite index was up 85.64 points, or 1.88 percent, at 4,643.59.

The S&P and the Nasdaq were on track for their best one-day percentage gain since Feb. 17.

Nine of the 10 major S&P sectors were higher, led by a 2.3-per-cent rise in the financials sector, which has been the worst performing sector this year.

The technology sector was up 2.14 per cent. Utilities was the only laggard.

The S&P 500 has recovered from a steep sell-off at the start of 2016 is currently above its 50-day moving average, a key technical level, in a sign of increased investor optimism.

However, data outside the United States was not as encouraging.

Manufacturing activity across much of Asia, including China, shrank in February, and factory growth in Europe waned, dealing a further blow to policymakers struggling to stimulate their economies and spur inflation.

Fiat rose 5.5 per cent, Ford 3.8 per cent and GM 1.4 per cent after strong U.S. auto sales in February, defying fears of a slowdown after a record 2015.

Honeywell rose 3.2 per cent to $104.62 after dropping its bid for United Technologies. United Tech was down 3.1 per cent at $93.62 and was the only laggard on the Dow.

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