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At midday: TSX jumps on broad rally led by banks, resource stocks

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

Mark Blinch/Reuters

Canada's main stock index rose to a 12-day high on Tuesday, boosted by financial stocks, miners and energy companies including TransCanada Corp, which added to gains after winning a key approval for its Keystone XL pipeline on Monday.

At 11:18 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was up 86.77 points, or 0.54 per cent, to 16,091.08. That was its highest level since Nov. 9.

Nine of its 10 main sectors rose, with healthcare the only declining group.

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The energy group climbed 0.3 per cent and the financials group also gained 0.3 per cent, while the materials group, which includes precious and base metals miners and fertilizer companies, added 1.2 per cent.

Nine of its 10 main sectors rose, with healthcare the only declining group.

Industrials rose 0.3 per cent, with Bombardier Inc up 2 per cent at $3.13 in heavy volume after the plane and train maker completed a debt offering and JP Morgan raised its rating on the company to "overweight."

One of the largest percentage gainer was First Quantum Minerals Ltd which rose 4.2 per cent to $15.42 as base metal prices pushed higher.

Wall Street indexes hit record levels on Tuesday, with technology stocks rising for a second straight day and healthcare shares getting a boost from Medtronic's results.

With the third-quarter earnings season winding down and no major economic data in sight, trading activity is expected to slow ahead of Thursday's Thanksgiving holiday.

Also helping the market was a rise in oil prices ahead of next week's OPEC meeting where major crude exporters are expected to extend production cuts.

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"It is a return of momentum for the market, with some of positive earnings and recommendations as catalysts," said Eric Wiegand, senior portfolio manager at U.S. Bank's Private Client Reserve unit.

The S&P technology index climbed more than 1 per cent in the session. It has risen 38 per cent this year, far outperforming the broader S&P 500 index and other major sectors.

"They have been in a leadership position and have produced remarkable earnings growth," Mr. Wiegand said.

The Dow Jones Industrial Average was up 165.03 points, or 0.7 per cent, at 23,595.36.

The S&P 500 was up 17.13 points, or 0.66 per cent, at 2,599.27 and the Nasdaq Composite was up 64.70 points, or 0.95 per cent, at 6,855.41.

Apple's shares were up nearly 2 per cent, boosting all three major indexes.

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Medtronic rose 5.3 per cent, making it the top gainer on the S&P 500, after the medical device maker reported better-than-expected results and backed its forecast.

Hormel Foods rose 5.5 per cent, while Urban Outfitters gained 4.7 per cent after reporting quarterly results.

Lowe's dipped marginally even as the home improvement chain reported strong sales and profit on higher demand after recent hurricanes.

Signet Jewelers tanked 27 per cent after reporting a surprise quarterly loss, pulling down Tiffany by more than 1 per cent.

Oil rose on Tuesday, supported by expectations of an extension next week to OPEC output cuts, but prices remained under pressure from signs of higher output in the United States.

Brent crude oil was up 17 cents at $62.39 a barrel. U.S. light crude was at $56.72, up 30 cents.

Analysts said Brent was expected to fluctuate in a narrow range, from $61 to $63, as the market awaited the outcome of the Organization of the Petroleum Exporting Countries' meeting on Nov. 30.

OPEC, together with a number of non-OPEC producers led by Russia, has been restraining output this year in an effort to end a global supply overhang and prop up prices.

At its meeting next week, the group is widely expected to extend the deal beyond its March 2018 expiry date.

"The market is just waiting for confirmation that OPEC wants to move on with the extension," said Ole Hansen, senior manager at Saxo Bank.

But doubts about the willingness of some participants including Russia to keep restricting production have led traders to take a more cautious approach and weighed on prices.

"Against the positive news we have some comments from Russia which could indicate that they at this stage prefer to wait and see," Hansen said.

"And obviously a deal in order to be successful needs to have everyone on board."

Russian news agency TASS reported on Tuesday that the country's oil producers had met with the energy ministry to discuss a six-month extension, as opposed to the nine months originally floated by President Vladimir Putin.

But the biggest headache for OPEC has been a rise in U.S. drilling activity, led by shale oil producers.

Energy consultancy Westwood Global Energy Group said U.S. output would climb even faster than implied by the rising rig count, which has jumped from 316 rigs in mid-2016 to 738 last week, as producers become more productive per well.

"Westwood Global Energy forecasts an 18-per-cent increase in active rigs in 2018, but more rapid demand growth in certain service areas as operators focus on efficiency and delivering more for less," the consultancy said.

FGE, another consultancy, also warned that though supply disruptions could lead to spikes in the oil price next year, the market could slump again towards 2019 if U.S. production continued to soar.

"We see another big rush with (U.S.) production growth of some 1-1.5 million bpd (barrels per day) in 2018 and 2019," FGE said.

Reflecting rising U.S. oil exports to Asia, U.S. commodity exchange CME Group said it would list a new futures contract that prices the spread between U.S. WTI futures and Middle East benchmark Dubai, starting Dec. 18.

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