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The close: TSX rises with miners, financials; Linamar jumps on deal

The Toronto Stock Exchange Broadcast Centre is pictured in Toronto on June 28, 2013.THE CANADIAN PRESS/Aaron Vincent Elkaim

The Globe and Mail

Canada's main stock index ended higher on Friday, boosted by gains for financial stocks and base metal miners and a surge in auto parts maker Linamar Corp. after it said it would buy a farm equipment maker.

The Toronto Stock Exchange's S&P/TSX composite index unofficially closed up 25.52 points, or 0.16 per cent, at 16,041.98. It lost 0.3 per cent over the week after hitting an all-time high on Wednesday.

Seven of the index's 10 main sectors finished in positive territory, although decliners slightly outnumbered gainers overall.

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Linamar gained 11.5 per cent to $72.50 after saying after the bell on Thursday it had agreed to buy privately held MacDon Group of Cos. for $1.2-billion.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.6 per cent, with First Quantum Minerals Ltd. up 4.9 per cent at $16.98 and Teck Resources Ltd. adding 2.7 per cent to $30.67.

The energy group fell 1 per cent, with Encana down 5.4 per cent even as oil prices edged higher. The financials group gained 0.2 per cent as Manulife added 1.2 per cent and industrials rose 0.5 per cent as Waste Connections Inc. gained 2.3 per cent.

Wall Street's three major indexes tallied record closing highs on Friday with broad gains across sectors as a long-awaited tax bill that would cut corporate tax rates looked like it would win enough support from lawmakers to pass.

The Dow Jones Industrial Average rose 142.49 points, or 0.58 per cent, to 24,651.15, the S&P 500 gained 23.62 points, or 0.89 per cent, to 2,675.63 and the Nasdaq Composite added 80.06 points, or 1.17 per cent, to 6,936.58.

For the week, the S&P rose 0.91 per cent, the Dow added 1.32 per cent and the Nasdaq gained 1.41 per cent.

Republicans put the final touches on their tax overhaul plan on Friday, with decisive votes in the House of Representatives and the Senate seen next week.

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CNBC was reporting that Republican Marco Rubio would support a compromise bill. Rubio had spoken out against the bill as he sought an expansion of child tax credits.

"It's the Marco Rubio watch today and the market seems to be responding to the latest on whether he will or won't support the tax reform bill," said David Joy, chief market strategist at Ameriprise Financial in Boston.

"They're not completely out of the woods yet but it's getting closer and closer."

The bill, which in its current form proposes to lower the corporate tax rate to 21 per cent from 35 per cent, has been a major catalyst for this year's surge in equities.

The S&P financial index gained 1 per cent. Banks are seen as one of the biggest beneficiaries of tax reform.

The S&P consumer staples index rose 1.1 per cent. Costco was its biggest percentage gainer with a 3.3 per cent rise after the retailer reported upbeat results.

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On top of a boost expected from the tax law overhaul, Ameriprise's Joy said investors may have been encouraged by Unilever's agreement to sell its margarine and spreads business to U.S. private equity firm KKR for 6.83 billion euros ($8.04 billion).

The technology sector gained 1.2 per cent, though one notable decliner was Oracle. The software maker slipped 3.8 per cent after it gave a disappointing forecast for its cloud business.

CSX tumbled 7.6 per cent after the railroad said its Chief Executive Hunter Harrison was taking medical leave, amid its controversial turnaround plan.

Reuters

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