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The Globe and Mail

At midday: S&P 500 hits new five-year high

The U.S. benchmark index rose to a fresh five-year high in midday trading on Friday, after a smaller than expected trade deficit pointed to stronger economic activity in the fourth quarter and European leaders agreed to a seven-year budget.

At around noon, the S&P 500 was up 8 points or 0.5 per cent, to 1517. The blue-chip Dow Jones industrial average was up 48 points or 0.4 per cent, to 13,992 – after briefly rising above 14,000 earlier in the day. In Canada, the S&P/TSX composite index was up 32 points or 0.3 per cent, to 12,788.

Trading volumes were relatively low because of the winter storm battering the U.S. northeast.

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The U.S. trade deficit fell to $38.5-billion (U.S.) in December, a much steeper drop than expected, which points to economic growth in the fourth quarter when revised figures are released. A preliminary reading showed a contraction of 0.1 per cent.

China's trade surplus in January was bigger than expected, with exports rising 25 per cent over last year.

In Europe, EU leaders agreed to a seven-year budget that entails the region's first-ever spending cuts.

Stocks reacted favourably: The U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 0.8 per cent.

Within the S&P 500, technology stocks led the way, rising 1.1 per cent. Consumer discretionary stocks and health-care stocks rose 0.7 per cent each. Financials rose 0.2 per cent.

LinkedIn Corp. surged 19.5 per cent after reporting income (excluding some extraordinary items) of $40.2-million or 35 cents a share, topping expectations.

Boeing Co. fell 1 per cent after it warned that deliveries of its 787 Dreamliner were at risk as it works with regulators to determine a solution to onboard fires that have grounded its fleet of new airliners.

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In Canada, industrials and consumer staples rose 0.6 per cent each, financials rose 0.5 per cent and energy stocks rose 0.4 per cent.

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