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At midday: Dow sheds 250 points as trade war worries weigh on industrials

TMX Group Inc. signage is seen at the Toronto Stock Exchange (TSX) in this file photo.

Pawel Dwulit/Bloomberg

Canada's main stock index sat flat on Wednesday, boosted by the heavyweight financial sector and shares of Valeant Pharmaceuticals after the company's drug was approved.

At 11:51 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 5.17 points, or 0.03 per cent, at 15,641.97.

Shares of Valeant Pharmaceuticals International Inc. jumped 5.56 per cent to $22.01 after Health Canada approved its drug for plaque psoriasis.

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The financials group, which accounts for about a third of the index, rose 0.1 per cent. Among the gainers, Bank of Nova Scotia climbed 0.3 per cent to $81.49, while Bank of Montreal was up 0.5 per cent at $98.57.

Energy shares gave up earlier gains even as the price of oil rose following strong Chinese factory data. The sector was down 0.3 per cent in mid-morning trading.

Suncor Energy Inc. was one of the biggest drags on the index after the company said its Syncrude oil sands project in northern Alberta would run at reduced rates in the first quarter due to maintenance. Suncor was down 0.9 per cent at $41.90.

Teck Resources Ltd. rose 2.7 per cent to $35.01 after India's Steel Minister said state-owned Steel Authority of India was in talks with Teck for long-term purchase agreements.

The Dow Jones Industrial Average shed more than 250 points on Wednesday as U.S. manufacturers continued to suffer from concerns over the impact of new tariffs on trade.

Boeing's 4-per-cent fall contributed to about 100 points drop in the blue-chip index, with traders citing continuing fallout from Tuesday's reports that U.S. President Donald Trump could impose tariffs on up to $60-billion of Chinese imports.

"Governments in general are in a wait-and-see mode to find out what is going to be the outcome of the negotiations," said Paul Springmeyer, investment managing director at U.S. Bank Private Wealth Management.

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The Trump administration is pressing China to cut its trade surplus with the United States by $100-billion, a White House spokeswoman said on Wednesday.

"There's every situation that's being looked at now, whether it's tariffs or not with a new eye, in terms of how one would deal with United States moving forward."

Major U.S. manufacturers have been the heaviest hit since Mr. Trump trailered and then announced tariffs on steel and aluminum imports earlier this month.

The issue overshadowed China's report that its factory output grew much faster than expected at the start of the year, suggesting the world's second largest economy may be picking up speed.

The Dow Jones Industrial Average was down 257.31 points, or 1.03 per cent, at 24,749.72. The S&P 500 fell 0.46 per cent to 2,752.71 and the Nasdaq Composite dropped 0.32 per cent to 7,487.06.

The third straight monthly fall in retail sales pointed to slowing U.S. growth but cooled concerns of Federal Reserve raising interest rates at a faster pace in 2018.

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Following the data, J.P. Morgan analysts lowered their first-quarter gross domestic product growth estimate to 2 per cent from 2.5 per cent.

Financial stocks fell 0.37 per cent, tracking a decline in U.S. bond yields on the back of soft retail sales data.

Shares of department store operators Kohl's fell 2.9 per cent, while Macy's and Nordstrom dropped more than 1 per cent.

Shares in Qualcomm fell about 3 per cent and those in rival Broadcom declined 0.5 percent after the Singapore-based chipmaker formally withdrew its bid for Qualcomm Inc but said it would pursue other targets.

Signet Jewelers fell about 17 per cent after the company reported lower same-store sales in the fourth quarter.

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