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Energy stocks weighed on Canada’s main stock index in the wake of a Federal Court of Appeal decision to quash the approval of the contentious Trans Mountain pipeline expansion.

At 11:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 17.3 points, or 0.11 per cent, at 16,372.99.

The energy sector erased early gains following the decision, sitting down 1.8 per cent despite gains in U.S. crude prices.

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Cenovus Energy Inc. dropped 4.4 per cent, while Meg Energy Corp. plummeted 7 per cent.

The material sector fell 0.9 per cent with shares of mining companies were the biggest drags. First Quantum Minerals, Teck Resources and Agnico Eagle Mines fell between 1 per cent and 1.5 per cent.

Toronto-Dominion Bank reported third-quarter profit which topped expectations, but its shares dipped 0.2 per cent after analysts said its performance was less impressive than rival Canadian lenders.

Canadian Western Bank fell 3.6 per cent, the most on the TSX, after the company reported third-quarter results.

The biggest percentage gainer on the TSX was BRP Inc , which jumped 8.4 per cent, after reporting better-than-expected quarterly results.

U.S. stocks dropped on Thursday, after four straight sessions of gains, weighed down by concerns over the U.S.-China trade war, even though gains in technology stocks helped limit losses.

Washington has proposed slapping tariffs on a further $200-billion worth of Chinese goods, which will come into effect next month after a public comment period ends on Wednesday, Sept. 5.

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Metal prices fell as the Sino-U.S. trade tensions upstaged optimism that the United States and Canada could clinch a new North American Free Trade Agreement (NAFTA).

The S&P materials index sank 1.21 per cent, the most among the 11 major S&P sectors. Trade-sensitive industrials fell 0.35 per cent, led by Caterpillar’s 1.3-per-cent decline.

However big technology stocks provided support. Facebook was up 1.8 per cent and Apple rose 0.6 per cent.

Amazon rose as much as 1.4 per cent to a record high of $2,025.57, moving closer to joining Apple in the $1 trillion market cap club. Amazon was last up 1 percent.

“I would never bet against the tech leaders, because every single time the markets have ticked down the tech stocks seemed to have eventually gained enough to close the markets higher and today should be no different,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.

“The (dip in the markets) is no surprise given the recent run-up, we have seen a pretty consistent appreciation in the past few days and investors are just catching breath before the long weekend ahead.”

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The Dow Jones Industrial Average was down 75.40 points, or 0.29 per cent, at 26,049.17, the S&P 500 was down 5.44 points, or 0.19 per cent, at 2,908.60 and the Nasdaq Composite was down 2.03 points, or 0.03 per cent, at 8,107.65.

Three of the 11 S&P sectors were higher, led by the utilities index’s 0.30-per-cent rise.

Dollar Tree slid 12 per cent, the most on the S&P, after reporting lower margins and forecasting a disappointing full-year profit.

Dialysis services provider DaVita fell 9.1 per cent after California passed a bill that aims to curb access to insurance coverage for kidney patients.

Signet Jewelers soared 28.2 per cent after the company topped sales and profit estimates and raised its full-year sales forecast.

Commerce Department data showed consumer spending increased strongly in July and a Labor Department report showed the labor market remained robust, despite a rise in jobless claims last week.

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Oil prices rose on Thursday, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. crude inventories.

Brent has risen by almost 10 per cent over the past two weeks on widespread perceptions that the global oil market is tightening and could run short in the next few months as U.S. sanctions restrict crude exports from Iran.

“There are a lot of supportive factors here,” said John Kilduff, a partner at Again Capital Management in New York

Brent crude oil was up 53 cents a barrel at $77.67. U.S. crude was 34 cents higher at $69.85, after earlier hitting a high of $70.08.

“The oil market is once again tightening,” said Giovanni Staunovo, analyst at Swiss bank UBS in Zurich. “Iranian oil export declines are already visible well in advance of U.S. oil-related sanctions, which enter into force in November.”

Iranian crude exports are likely to drop to a little more than 2 million barrels per day (bpd) in August, against a peak of 3.1 million bpd in April, as importers bow to American pressure to cut orders.

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The Organization of the Petroleum Exporting Countries, in which Iran is the third-biggest producer, will discuss in December whether it can compensate for a sudden drop in Iranian supply after sanctions start in November, the head of Iraq’s state oil marketer SOMO, Alaa al-Yasiri, said on Wednesday.

Reuters and The Canadian Press

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