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Equities

The S&P/TSX Composite Index carved out modest gains as mining shares rose on the back of Barrick Gold’s latest results but energy stocks struggled as crude prices slid. Wall Street edged higher at the open to near record levels as investors weigh corporate results and wait for the next development in trade talks between the United States and China.

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At 09:43 a.m. ET (1443 GMT), the Toronto Stock Exchange’s S&P/TSX Composite index was up 21.52 points, or 0.13%, at 16,703.44. The materials sector advanced 0.4 per cent. Energy shares fell 0.7 per cent.

In the U.S., the Dow Jones Industrial Average rose 10.11 points, or 0.04 per cent, at the open to 27,502.74.

The S&P 500 opened higher by 0.48 points, or 0.02 per cent, at 3,075.10. The Nasdaq Composite, however, dropped 8.11 points, or 0.10%, to 8,426.57 at the opening bell.

“You can almost feel the enthusiasm drain away from the equity market,” Chris Beauchamp, chief market analyst with IG, said.

“It is probably just some over tiredness, or disappointment at the lack of fresh trade war headlines, but stocks seem unable to keep moving higher. After the gains of the past month, this is hardly surprising, and, as suspected, the Vix (volatility index) is also beginning to move higher.”

Wall Street marked another milestone on Tuesday, with the Dow managing a record close. Major European markets started little changed but managing cautious gains heading into the afternoon. Asian markets ended mixed.

On Bay Street, earnings continue to set the tone.

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Ahead of the open, Barrick Gold Corp. said adjusted profit in the latest quarter rose to US$264-million, or 15 US cents a share, from US$89-million, or 8 US cents a share last year. Gold production rose to 1.31 million ounces from 1.15 million ounces. Barrick also hiked its quarterly dividend by 25 per cent to 5 US cents a share. Barrick shares were up more than 3 per cent in early trading in Toronto.

After the close insurers Sun Life and Manulife Financial release their latest results.

News that China has reopened its market to imports of Canadian pork and beef after a four-month ban will likely continue to bolster shares of producers in this country. Maple Leaf Foods closed up more than 3 per cent in Toronto on Tuesday following news of the rescinding of the ban. In the last quarter, Maple Leaf fell short of analysts’ forecasts, citing, in part, the impact of “abnormal erratic” pork market conditions.

South of the border, the Wall Street Journal reports that Xerox Holdings Corp. is considering making a cash-and-stock offer for personal computer maker HP Inc. valued at US$27-billion. The report, citing sources familiar with the matter, said Xerox’s board discussed the possibility on Tuesday. On Monday, Xerox had said it will sell its 25-per-cent stake in Fuji Xerox, its joint venture with Fujifilm Holdings, for US$2.3-billion amid investor concern over the deal. Last year, Xerox had dropped its US$6.1-billion plan to merge with Fujifilm after lobbying by two of its main investors, Carl Icahn and Darwin Deason. HP shares were up more than 12 per cent.

Overseas, major European markets made tentative moves higher by afternoon. Tepid economic data out of Germany also put a cap on gains. New numbers showed Germany’s services sector barely advanced in October while euro zone business activity grew slightly faster than forecast but still remained modest.

The pan-European STOXX 600 gained 0.16 per cent. Britain’s FTSE 100 was up 0.02 per cent. Germany’s DAX rose 0.20 per cent. France’s CAC 40 edged up 0.38 per cent.

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In Asia, markets closed out the session mixed. The Shanghai Composite Index fell 0.43 per cent. Japan’s Nikkei edged up 0.22 per cent. Hong Kong’s Hang Seng finished up 0.02 per cent.

Commodities

Crude prices were weaker, ending a three-day rally, after new figures showed a bigger-than-expected rise in weekly U.S. inventories.

The day range on Brent is US$62.36 to US$62.81. The range on West Texas Intermediate is US$56.75 to US$57.27.

The American Petroleum Institute said crude inventories rose by 4.3 million barrels to 440.5 million barrels for the week ended Nov. 1. Analysts had been forecasting a much more modest rise of 1.5 million barrels.

Official U.S. weekly numbers are due from the U.S. Energy Information Administration shortly after the North American open.

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“Oil traders should find dip-buying interest in price pullbacks, as the expectation of further production cuts sneak in on the run-up to OPEC’s December meeting,” Ipek Ozkardeskaya, senior market analyst with London Capital Group, said.

OPEC and its allies meet next month and are expected to weigh extending and possibly deepening current production cuts, which are now set to run through to March.

Through this week, markets have also found support in optimism over the state of U.S.-China trade talks and hopes that the two could sign a partial agreement in the relatively near future. However, analysts say reports that China wants some recent tariffs pulled back as part of the agreement could be a sticking point in talks.

“I think the market is less concerned about the inventory data since it’s not at any dangerous levels and following seasonal patterns but are deeply worried if there is a failure to roll back tariffs, which could likely prompt a significant bearish shift in sentiment," Stephen Innes, strategist with AxiTrader, said.

“China continues to test President [Donald] Trump’s resolve to push for a reverse in U.S. tariffs before signing a deal. While I believe Trump wants the political trade deal to win, I’m not so sure how keen he is to bridge the trust gap and commit to a rollback before an enforcement mechanism is in place.”

Gold prices, meanwhile, edged higher.

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Spot gold rose 0.1 per cent to US$1,485.25 per ounce. On Tuesday, prices posted their biggest one-day percentage drop since late September, falling 1.7 per cent.

U.S. gold futures were up 0.2 per cent at US$1,486.90.

Currencies

The Canadian dollar continued to trade in a narrow range around the 76-US-cent mark with risk sentiment pulling back a bit as investors await more news on U.S.-China trade negotiations.

The day range on the loonie so far is 75.93 US cents to 76.07 US cents.

“With no further news to digest on U.S.-China trade, markets have consolidated yesterday’s risk-positive moves overnight,” RBC chief currency strategist Adam Cole said. “[U.S. dollar/Japanese yen] is off the overnight high and other G10 currencies are trapped in tight ranges.”

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There were no major Canadian economic reports on the calendar for Wednesday.

On global markets, major currencies were waiting for more news on trade.

The U.S. dollar index, which weighs the greenback against other major currencies, was mostly unchanged 97.876 in early European trading. The index fell 0.4 per cent on Tuesday.

The euro stood at US$1.1077, after falling 0.5 per cent on Tuesday, and was not far from a near three-week low of US$1.10635 hit that session, according to Reuters.

In bonds, U.S. Treasury yields were slightly lower. The yield on the 10-year note was down at 1.846 per cent. The yield on the 30-year note was also lower at 2.323 per cent.

More company news

The Globe’s Tim Kiladze reports that GFL Environmental Inc. is pulling its initial public offering after institutional investors pressed the Canadian waste management giant to price its shares below the deal’s marketing range. The IPO, which launched in mid-October, was expected to raise as much as US$2.4-billion, with GFL marketing as many as 100.7 million shares to potential buyers at US$20 to US$24 each.

Cosmetics maker Coty Inc posted first-quarter revenue below Wall Street estimates, hit by sluggish sales in its biggest business, consumer beauty. Net income attributable to the company was US$52.3-million, or 7 US cents per share, in the quarter ended Sep. 30, compared with a loss of US$12.1-million, or 2 US cents per share, a year earlier. Net revenue fell 4.4 per cent to US$1.94-billion. Analysts were expecting US$1.97-billion, according to IBES data from Refinitiv.

Spin Master Corp. says earnings dropped in the third quarter as several challenges, including U.S. tariffs on Chinese production, affected results. The Toronto-based toy manufacturer, which reports in U.S. dollars, says it earned $92.1-million, or 89 cents per share in the quarter ending Sept. 30, compared with $107.9-million or $1.06 per share in the same quarter last year. The company said adjusted net income was $93.2-million, or 90 cents per share, compared with $117.7-million or $1.15 per share last year.

CVS Health Corp posted a better-than-expected quarterly profit, boosted by its pharmacy benefit management unit and the Aetna health insurance business it acquired last year. Shares of the company rose 3 per cent in premarket trading after the company also raised its 2019 adjusted profit forecast range to US$6.97 to US$7.05 per share, from US$6.89 to US$7.00.

Papa John’s International Inc said its finance head would leave the company next year as new chief executive officer Rob Lynch makes top level changes to turn around the pizza chain’s business. The company has started looking for a replacement for chief financial officer Joe Smith and said it had hired Max Wetzel, a former top executive at chemicals company PPG Industries, as chief commercial and marketing officer.

SoftBank Group Corp. reported its first quarterly loss in 14 years on Wednesday, with its giant Vision Fund suffering a 970 billion yen ($8.9 billion) loss on falling valuations of top tech bets such as WeWork and Uber. The Japanese investment powerhouse posted an operating loss of 704 billion yen (US$6.5-billion) in the July-September quarter compared to a 706 billion yen profit in the same period a year earlier and a 48 billion yen loss forecast by analysts, according to Refinitiv.

BMW’s third-quarter operating profit rose 33 per cent on stronger sales of sports utility vehicles as well as the absence of one-off factors that had depressed earnings a year earlier, the German luxury car maker said. The Munich-based company said its earnings before interest and taxes rose to euro 2.29-billion.

Lufthansa cabin crew were given the green light by a German court to go on strike this week. On Wednesday, the Frankfurt labour court rejected a temporary injunction against a flight attendants’ strike scheduled for this week at German carrier Lufthansa. Germany’s biggest airline had filed a motion with the court to prevent the strike after trade union UFO had called for a walkout at Lufthansa’s German operations on Thursday and Friday.

Economic news

Ontario fiscal update.

(830 a.m. ET) U.S. productivity and unit labour costs for the third quarter.

With Reuters and The Canadian Press

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