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At midday: TSX flat as rise in lumber offsets drop in pot stocks

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 201

Mark Blin/Reute

Canadian lumber companies jumped and the country's marijuana producers fell on Friday, while heavyweight resource and financial stocks also moved in different directions, leaving the main Toronto equity index little changed in morning trading.

At 11:29 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index rose 14.62 points, or 0.1 per cent, to 16,301.17. It is on track for a 0.3-per-cent fall for the week.

The materials group, which includes precious and base metals miners and fertilizer companies, added 1 per cent, while the energy group sat flat after giving back early gains. The financials group slipped 0.1 per cent.

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Those three groups make up two thirds of the index's weight.

Cannabis companies, which have risen sharply as they race to prepare for Canada's legalization for recreational use, extended a recent pullback. Aphria Inc fell 8.8 per cent to $18.75 and Canopy Growth Corp was down 9.5 per cent to $34.

Lumber companies, whose softwood products are the subject of a trade spat between Canada and the United States, advanced, with Canfor Corp up 5.2 per cent to $27.10 and West Fraser Timber Co Ltd rising 6.7 per cent to $85.85.

Peyto Exploration and Development Corp surged 6.4 per cent to $14.03 after saying it will cut its 2018 capital budget and dividend payouts.

The Canadian dollar was up 0.1 per cent at 79.87 U.S. cents.

Wall Street's main indexes surged on Friday as strong results for JPMorgan lifted financial stocks and robust retail sales data drove gains in consumer stocks.

The biggest U.S. lender by assets said the new tax law would help future profits by not only reducing the amount it pays the federal government but also by stimulating more business.

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Shares of JP Morgan rose 1.1 per cent, helping lift the S&P financial index up 0.6 per cent, after its fourth-quarter profit beat estimates.

"Their effective tax rate will be declining from 30 per cent to 19 per cent, that's very meaningful. It should generate more than a billion dollar flowing into the bottom line," said Ron Weiner president and founder of RDM financial in Westport, Conn.

Wells Fargo fell 0.8 per cent after it set aside $3.25-billion in the fourth quarter to cover legal expenses related to probes into its mortgage and sales practices.

Earnings for S&P 500 companies are expected to increase on an average by 12.1 per cent in the quarter with profit for financial services companies likely to increase 13.2 per cent, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average was up 194.76 points, or 0.76 per cent, at 25,769.49 and the S&P 500 was up 13.89 points, or 0.50 per cent, at 2,781.45.

The Nasdaq Composite was up 39.36 points, or 0.55 per cent, at 7,251.14.

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The S&P consumer discretionary index jumped 0.81 per cent after an increase in retail sales showed households bought more goods and figures for the prior month were revised higher, suggesting the economy exited 2017 with strong momentum.

Amazon rose 1.8 per cent and provided the biggest boost to the S&P and the Nasdaq. Home Depot rose 1.6 per cent and Walmart rose 1 per cent.

"A lot of these companies like Target and Home Depot are getting on with the internet ecosystem of e-commerce," said Josh Jalinski, president of Jalinski Advisory Group.

Sales at online retailers soared 1.2 per cent.

Another data showed U.S. consumer prices recorded their biggest rise in 11 months in December on gains in the cost of rental accommodations and healthcare, bolstering expectations that inflation will accelerate this year.

Among other stocks, Facebook fell 4 per cent after the company started changing the way it filters posts and videos on News Feed.

Advanced Micro Devices fell 2.66 per cent after the chipmaker said its microprocessors are prone to both variants of the Spectre security flaw, days after saying its risk for one of them was "near zero."

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