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The close: TSX grinds higher as Bombardier soars on Airbus deal

TORONTO - MAY 11: The Trump branded tower (center L) stands next to bank towers Scotia Plaza (center R), First Canadian Place (L) and Commerce Court (R) in the Bay Street financial district in Toronto, Canada on May 11, 2017. Also seen are the KPMG and Deloitte Towers if the Bay Adelaide Center. (Photo by Gary Hershorn)

Gary Hershorn

Canada's main stock index inched higher on Tuesday, helped by a jump in Bombardier Inc shares and higher financial stocks.

Bombardier Inc ended up 15.7 per cent at C$2.73 after soaring as much as 26.4 per cent following a game-changing deal with Airbus SE.

The Canadian plane and train maker said it would sell a majority stake in its CSeries jetliner program to the European aircraft manufacturer, a move that helps secure the CSeries' future and solves a number of issues for Bombardier, including its dispute with Boeing Co.

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The overall industrials group rose 0.4 per cent.

"It could be a win-win-win scenario. I think time will tell. ... It seems like a very creative way to perhaps get a win out of the scenario," said Kevin Headland, senior investment strategist at Manulife Investments.

Financial stocks, which makes up about a third of the index's weight, gained 0.2 per cent. Royal Bank of Canada was the biggest driver of the index's gains and was up 0.5 per cent at C$99.78. Thomson Reuters was another top gainer, rising 1.7 per cent to C$60.19.

The Toronto Stock Exchange's S&P/TSX composite index edged up 14.2 points, or 0.09 per cent, to finish at 15,816.90.

Six out of the index's 10 main groups advanced.

"There's no material end in sight for this slow grind higher. ... It should end the year in positive territory," said Headland, adding that there did not seem to be too much negative momentum going forward.

Oil and gas companies rose 0.3 per cent alongside slightly firmer crude prices, which advanced on Middle East tensions and data that showed a bigger-than-expected draw in inventories.

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Capping the index's gains was a 0.7 per cent fall in mining and other resource stocks, as base and precious metal prices fell on a stronger U.S. dollar.

First Quantum Minerals Ltd was the index's biggest drag, stumbling 4.1 per cent to C$15.19, while Teck Resources fell 2.3 per cent to C$28.16. Iamgold Corp sank 5.2 per cent to C$7.09.

Aphria Inc shares tumbled 13.4 per cent to C$6.86 after the operator of the Toronto Stock Exchange said that cannabis companies with U.S. interests would come under heightened scrutiny and could be delisted.

Canopy Growth Corp fell 4.7 per cent to C$12.52, while the overall healthcare group gave back 1.6 per cent.

Declining issues outnumbered advancing ones on the TSX by 132 to 108, for a 1.22-to-1 ratio on the downside.

Wall Street ends little changed; Dow brushes 23,000 milestone

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The Dow Jones Industrial Average briefly broke above the 23,000-point mark for the first time on Tuesday, driven by strong earnings from UnitedHealth and Johnson & Johnson, but finished the session just below that milestone.

The blue-chip index, which surpassed similar 1,000-point marks three times previously this year, has been steadily inching higher and is up 2.6 per cent so far this month, putting it on track for a seventh straight monthly advance.

Still, the Dow may in the near term have a difficult time sustaining a move above 23,000, said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

"My view is it may pull back before staying above" that level. "It may take several days or a couple of weeks," he said.

"Right now, you're contending with earnings season and the fact that the market has run up leading up into the earnings season," Pavlik said.

Shares of the largest U.S. health insurer UnitedHealth touched a life intraday high and closed up 5.5 per cent after the company reported a stronger-than-expected profit and raised its full-year earnings forecast.

Johnson & Johnson , up 3.4 per cent, also posted better-than-expected results and raised its forecast, leading a 1.3 per cent gain in the S&P healthcare sector <.SPXHC>.

The Dow Jones Industrial Average <.DJI> rose 40.48 points, or 0.18 per cent, to end at 22,997.44 after rising as high as 23,002.20.

The S&P 500 <.SPX> gained 1.72 points, or 0.07 per cent, to 2,559.36. and the Nasdaq Composite <.IXIC> dropped 0.35 point, or 0.01 per cent, to 6,623.66.

Also boosting some health insurers and U.S. hospital operators was news of a bipartisan deal in the U.S. Senate to stabilise Obamacare. Shares of Anthem were up 1.9 per cent, while shares of Tenet Healthcare were up 5.3 per cent.

Financials were the biggest drag on the S&P 500, with shares of Goldman Sachs down 2.6 per cent despite reporting a profit beat and smaller-than-expected trading revenue fall.

Netflix slipped 1.6 per cent after touching a record high as more subscribers signed up for its original content in the latest quarter.

Declining issues outnumbered advancing ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.72-to-1 ratio favoured decliners.

About 5.5 billion shares changed hands on U.S. exchanges. That compares with the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

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