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The close: TSX finishes flat as consumer stocks’ losses offset mining, energy gains

Trader Robert Moran, center, works on the floor of the New York Stock Exchange, Thursday, Feb. 22.

Richard Drew/AP

Canada's main stock index closed little changed on Thursday as strength in miners and energy companies offset losses in healthcare and consumer shares.

The Toronto Stock Exchange's S&P/TSX composite index ended the day 15.84 points, or 0.1 per cent, lower at 15,508.17.

Magna International Inc. provided one of the biggest boosts to the index, rising 2.4 per cent to $71.31 a share after the auto parts maker's quarterly results were lifted by higher sales in Europe and the launch of new cars for BMW and Jaguar.

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The financial sector erased gains late, finishing 0.3 per cent lower.

Bank of Montreal ended down 0.5 per cent at $98.69, while Royal Bank of Canada fell 0.3 per cent to $102.16.

Canadian Imperial Bank of Commerce rose 0.4 per cent to $116.93 a share after its quarterly results topped expectations on a strong performance in all business units and an expansion in the United States.

The energy group climbed 1 per cent as U.S. crude prices rose after a surprise decline in inventories. Encana Corp. jumped 1.6 per cent to $13.66, while Canadian Natural Resources Ltd. was also up 1.6 per cent to $40.06.

A gain in spot gold prices also boosted the resource sector by 0.4 per cent.

Kirkland Lake Gold Ltd. rose 3.6 per cent to $20.21, while Lundin Mining Corp. increased 3 per cent to $8.59. Methanex Corp. jumped 1.9 per cent to $74.12.

Among other companies that reported results, SNC-Lavalin Group Inc. advanced 4 per cent to $55.60 a share after its profit topped expectations and the company gave a strong forecast for 2018.

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On the downside, Loblaw Cos Ltd. declined 1.8 per cent to $64.16 a share following its quarterly report.

Manulife Financial Corp. dropped 1.1 per cent to $24.50, while Sun Life Financial Inc. fell 1.4 per cent to $54.

The Dow and S&P 500 advanced on Thursday to halt a two-session losing skid, buoyed by gains in industrial and energy shares as U.S. Treasury yields eased, while the Nasdaq lost ground for a third straight session.

Major indexes advanced early as worries about a faster pace of interest rate hikes by the U.S. Federal Reserve were eased by comments by St. Louis Fed President James Bullard, who expressed concerns that a "bunch of hikes" could turn Fed policy restrictive. Benchmark 10-year U.S. Treasury yields retreated from the more than four-year highs hit on Wednesday.

Those gains faded, however, and major indexes finished well off session highs as investors exercised caution in what is likely to be a rising interest rate environment.

"The rally on Bullard was a little overzealous," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Conn.

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"I wouldn't be out there aggressively buying stocks because until the interest rate picture clarifies, and it probably will do so at a higher level, it is just going to create problems for equities," he said.

The concerns over rising interest rates have dogged Wall Street of late, and stocks stumbled on Wednesday after minutes from the Federal Reserve's January meeting showed the central bank's rate-setting committee grew more confident in the need to keep raising rates.

Market participants are still largely expecting the Fed to raise rates three times this year, beginning with its next meeting in March.

Despite the recent climb in rates, many analysts expect the stock market to be able to absorb the rise as long as economic data remain supportive and the pace of the increase is modest.

The Dow Jones Industrial Average rose 164.7 points, or 0.66 per cent, to 24,962.48, the S&P 500 gained 2.63 points, or 0.10 per cent, to 2,703.96, and the Nasdaq Composite dropped 8.14 points, or 0.11 per cent, to 7,210.09.

Benchmark 10-year notes last rose 5/32 in price to yield 2.9225 per cent, from 2.941 percent late on Wednesday.

Industrial shares climbed 0.59 per cent, led by a 3.04-per-cent gain in Quanta Services Inc after its quarterly results and a 3.34 percent rise in United Technologies Corp after the aero parts maker said it is exploring a breakup of its business portfolio.

Energy stocks, up 1.08 per cent, also helped support gains, as oil prices advanced on a surprise draw in U.S. crude inventories.

Chesapeake Energy Corp shares surged 21.67 per cent, their biggest daily percentage gain since April 2016, after the company's quarterly results and outlook.

Oil prices rose to two-week highs on Thursday, boosted by data showing a surprise draw in U.S. crude inventories and also by a drop in the dollar.

West Texas Intermediate (WTI) crude futures rose $1.09, or about 1.8 per cent, to settle at $62.77 a barrel. U.S. crude traded between $60.75 and $63.09, its highest since Feb. 7.

Brent crude futures rose 97 cents to settle up about 1.5 per cent at $66.39 a barrel. It hit a two-week peak at $66.56.

U.S. crude inventories unexpectedly fell 1.6 million barrels last week as net imports dropped to a record low and exports surged, while inventories declined further at the key storage hub in Cushing, Okla., according to data from the Energy Information Administration (EIA).

Crude inventories had been forecast to rise 1.8 million barrels, as stocks seasonally increase when refineries cut intake to conduct maintenance.

"Weekly EIA data was particularly supportive to WTI considering U.S. and Cushing draws, a boost in crude exports above 2 million bpd and flat crude production," said Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota.

Crude stocks at the Cushing delivery hub for U.S. futures fell 2.7 million barrels last week, the ninth straight week of drawdowns, the EIA said.

"The reason that the inventories continue to drop at Cushing is because the market remains backwardated and therefore it's uneconomical to be storing crude," said Andrew Lipow, president of Lipow Oil Associates in Houston, Texas.

In a market structure called backwardation, prompt crude prices are higher than forward prices, discouraging storage.

"It makes more sense to liquidate your on-hand inventories," Mr. Lipow said.

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