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At the open: Dow hits 26,000 for first time; TSX slips

A Toronto Stock Exchange (TSX) logo is seen in Toronto Nov. 9, 2007.

Mark Blinch/Reuters

Canada's main stock index edged lower in early trade on Tuesday, as gold miners and other materials stocks weighed while marijuana producers extended their latest rally.

The Toronto Stock Exchange's S&P/TSX composite index was down 33.34 points, or 0.2 per cent, at 16,338.47 shortly after the open.

The Dow Jones Industrial Average touched the 26,000-mark for the first time on Tuesday and other Wall Street indexes climbed as strong earnings from UnitedHealth and Citigroup helped lift the sentiment.

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The Dow Jones Industrial Average rose 198.99 points, or 0.77 per cent, to 26,002.18. The S&P 500 gained 13.76 points, or 0.493856 per cent, to 2,800. The Nasdaq Composite added 45.95 points, or 0.63 per cent, to 7,307.01.

Hopes of strong quarterly earnings, supported by steep cut in corporate taxes, and solid global economic growth have bolstered Wall Street's optimism in the start to 2018.

"Not only is the U.S. coming off a strong quarter, but the new tax reform measures are continuing to provide a boost, with investors keen to hear more about what impact this will have on future earnings," said Craig Erlam, senior market analyst at online foreign exchange broker Oanda.

More than three quarters of the 26 S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S.

Asia and Europe's big bourses kept world shares on their record-breaking run on Tuesday, although a steadier dollar halted the sizzling start to the year for the euro, yen and yuan and sent metals markets skidding.

Wall Street traders were ready for another set of highs having seen MSCI's world index notch its third consecutive all-time best following a sharp jump in Japan, where the heavyweight Nikkei hit its highest since 1991..

The pan-European STOXX 600 crawled up 0.3 per cent as technology, car and insurance stocks offset a 1-per-cent drop in miners caused by buckling metals prices.

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Copper slumped 2.2 per cent, while nickel plunged almost 4 per cent. For both it was their biggest drop since early December, after which they went on to surge 10 and 20 per cent respectively.

Analysts put the wobble partly down to supply issues after stockpiles of iron ore at China's ports leapt to the highest since at least 2004, but also to the dollar -- used to price commodities -- pulling out of a four-day dive.

"Everything this year (in commodity markets) has been largely about the dollar," said Crédit Agricole FX Strategist Manuel Oliveri.

"It has been selling off regardless of rate expectations, regardless of the growth outlook," he added, saying he expected the currency to start stabilizing.

The steadier dollar also brought an end to the euro's four-day hot-streak though again there were other factors at play too.

The single currency was buffeted in early European trading by reports that parts of Germany's main opposition party were resistant to reforming a "grand coalition" with Angela Merkel's conservatives.

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It then took another step back after sources at the European Central Bank told Reuters that despite growing talk it will stop its mass stimulus at the end of September, policymakers were unlikely to flag an end to the program just yet.

The euro slipped all the way down to $1.2204 from Monday's three-year high of almost $1.23. The Japanese yen , which has also been on a strong run, was 0.15 per cent lower at 110.6 per dollar.

Euro zone government bond yields switched direction too, with German Bunds coming off recent highs and low-rated Italian and Portuguese debt outperforming as investors returned to some of 2017's most profitable trades.

"We need more thorough analysis before making any change," one of the ECB sources said.

BITCOIN SLUMPS

Ahead of the bell in North Amercica, Citigroup's quarterly profit topped analyst expectations as its consumer businesses made up for lower trading revenues, though General Electric looked set for a tumble as it took $6.2 billion hit on its insurance portfolio.

Overnight moves in Asia included a 1-per-cent jump by Japan's Nikkei that saw it touch its highest since November 1991 and more gains for high-flying Chinese bourses.

Australian shares had stumbled 0.5 per cent though as its heavyweight miners were bruised by the slide in metals prices.

"The yen's appreciation against the dollar has stopped and this brightened sentiment, along with expectations for robust company quarterly results," said Sumitomo Mitsui Asset Management's Masahiro Ichikawa about Tokyo's gains.

Japanese Finance Minister Taro Aso said on Tuesday that he did not see problems with the dollar weakening to around 110.80 yen, but that big swings in currencies would be problematic.

Crude oil prices were also softer after being driven to their highest levels since December 2014 this week by the dollar's weakness and signs that production cuts by OPEC and Russia are tightening supplies.

Brent crude futures were down 30 cents, or 0.4 per cent, at $69.94 a barrel after touching a high of $70.37 a barrel on Monday. Gold also shuffled back to $1,334 an ounce, after hitting a near four-month peak.

The other eye-catching move was another battering for crytocurrencies which have had a torrid start to the year following spectacular gains in 2017.

Bitcoin tumbled 18 per cent to almost $11,000, after reports that a ban on trading of cryptocurrencies in South Korea was still an option drove fears grew of a wider regulatory crackdown.

The slide triggered a massive selloff across the broader digital currency market, with biggest rival Ethereum down 23 per cent on the day and the next-biggest, Ripple, plunging 33 per cent.

"It's mainly been regulatory issues which are haunting the cryptocurrency, with news around South Korea's further crackdown on trading the driver today," said Think Markets chief strategist Naeem Aslam.

"But we maintain our stance. We do not think that the complete banning of cryptocurrencies is possible," he said.

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