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At midday: S&P 500 rebounds after back-to-back slump

North American stocks showed signs of breaking out of a two-day slump on Friday, following a better-than-expected reading on U.S. consumer confidence.

Shortly after noon, the Dow Jones industrial average was up 51 points or 0.4 per cent, to 12,862. The broader S&P 500 was up 10 points or 0.8 per cent, to 1388. In Canada, the S&P/TSX composite index was up 53 points or 0.4 per cent, to 12,244.

The gains follow back-to-back declines for major indexes, with investors apparently reacting to gloomy news on the European sovereign-debt crisis and worries about whether the United States will be able to avert a so-called fiscal cliff of rising taxes and reduced government spending next year.

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The University of Michigan's consumer sentiment index seemed to help lift spirits. Its November reading rose to 84.9 from 82.6 in October – marking its fourth straight increase sending the index to its highest level since July 2007.

Apple Inc. rose 2.3 per cent, rebounding from a bear market selloff that had sent the stock down as much as 23 per cent from its high. While there are concerns about the company's ability to compete in the increasingly fragmented smart phone and tablet markets, analysts have stuck to their bullish target prices on the stock in recent reports. According to Bloomberg News, the average target is $760.

Apple's gain drove technology stocks within the S&P up 1.3 per cent, making them the top performers within the benchmark index. In other moves, financials rose 1 per cent, industrials rose 0.9 per cent and telecom stocks rose 0.8 per cent.

Within Canada's benchmark index, telecom stocks rose 0.8 per cent, financials rose 0.5 per cent and energy stocks rose 0.3 per cent.

Telus Corp. rose 2.3 per cent after it reported a 7.7 per cent gain in its quarterly earnings and boosted its dividend by 3 cents a share.

Commodity prices moved higher. Crude oil rose to $85.72 (U.S.) a barrel, up 63 cents. Gold rose to $1,734 an ounce, up $8.

In Europe, stocks were weak. The U.K.'s FTSE 100 fell 0.1 per cent and Germany's DAX index fell 0.6 per cent.

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