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At midday: TSX flat as financials gain, energy stocks fall

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.

Mark Blinch/Reuters

Canada's main stock index was barely higher in morning trade on Thursday, as banks and other financial stocks pushed higher while the index was weighed by energy stocks including Husky Energy Inc., which has had its SeaRose operations suspended.

Husky fell 4.6 per cent to $18.19 after it said on Wednesday evening that Canadian regulators had ordered it to halt operations at its SeaRose floating production vessel after an iceberg came too close to the facility in March 2017.

The broader energy group retreated 0.4 per cent, as oil prices were weighed by a reported rise in U.S. fuel stocks and expectations that OPEC-led efforts to cut output will boost supply from the United States and other rivals.

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The financials group gained 0.3 per cent, adding to a move higher after the Bank of Canada raised interest rates on Wednesday. Home Capital Group Inc fell 0.8 per cent to $15.38 after the country's biggest alternative lender said on Wednesday it had received a statement of claim from short seller Marc Cohodes, who is seeking $4-million in damages.

At 11:18 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was up 9.67 points, or 0.06 per cent, at 16,326.25. Six of the index's 10 main groups were in positive territory, although decliners were slightly outnumbering advancers.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.2 per cent.

Oceanagold Corp rose 5.4 per cent to $3.35 after saying it produced a record amount of gold in 2017.

Ivanhoe Mines Ltd, which is developing a project in the Democratic Republic of Congo, advanced 1.2 per cent to $4.18, while Hudbay Minerals Inc. fell 7.4 per cent to $11.73 after it released its 2018 production and cost guidance.

Wall Street's main indexes edged lower on Thursday as declines in healthcare and energy stocks paused a rally that had driven the Dow Jones index to its fastest ever 1,000 point gain.

Merck and Pfizer weighed the most on the S&P healthcare sector, which fell 0.45 per cent.

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Oil's drop below $69 a barrel on a reported rise in U.S. fuel stocks shaved 0.66 per cent off the S&P energy index .

Investors are keeping a close eye on corporate earnings reports, given the runup in stock valuations.

Morgan Stanley wrapped up earnings season for the big U.S. banks with a better-than-expected profit, but its shares were little changed.

"This might just be a little bit of a pullback, especially after yesterday's significant gain, until we get further into the earnings season," said Lindsey Bell, investment strategist at CFRA Research in New York.

However, she said optimism was still intact.

"There is hope and anticipation for progress in policy. Infrastructure will be the next major one, it should help boost economic and corporate activity."

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The Dow Jones Industrial Average was down 77.54 points, or 0.3 per cent, at 26,038.11, the S&P 500 was down 4.39 points, or 0.16 per cent, at 2,798.17 and the Nasdaq Composite was down 5.33 points, or 0.07 per cent, at 7,292.95.

Economic data in the day was mixed. U.S. homebuilding fell more than expected in December, recording its biggest drop in just over a year, while weekly jobless claims dropped to a 45-year low last week.

Data from China showed its economic growth accelerated for the first time in seven years, putting world stocks on a firm footing.

Republican leaders in the U.S. Congress intensified efforts to pass a temporary extension in funding government operations and avert a shutdown, scheduling a vote on the measure for later Thursday.

The government is operating on its third temporary funding extension since the 2018 fiscal year began on Oct. 1.

Alcoa shares sank 8 per cent after the aluminum producer's quarterly earnings missed analysts' estimates.

Amazon said it has short-listed 20 cities, including Toronto, to build its second headquarters after reviewing 238 proposals and expects to make a decision this year. Its shares rose 0.35 per ent.

Bank of New York Mellon fell about 5 per cent after the custodian bank said it expected to book more in severance costs in 2018.

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