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Canada’s main stock index edged higher on gains from metals and consumer staples as investors made defensive moves ahead of a possible pullback. The S&P 500, however, ended lower.

The S&P/TSX composite index closed up 36.48 points, or 0.18%, to 20,183.72. Consumer staples rose just over 2 per cent, as Alimentation Couche-Tard rallied 5.75% after analysts raised price targets on the stock following the company’s investor day this week. At least two analysts upgraded their ratings to a buy recommendation as the company outlined several growth initiatives.

The TSX materials sector rose 0.87% as gold hit a one-month peak, spurred by U.S. Federal Reserve Chair Jerome Powell’s dovish comments and some concerns over a stalling global economy. U.S. gold futures gained 0.3% to US$1,830.00.

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The TSX energy sector was a drag on the Composite, falling 1.48%. Oil prices fell by more than US$1 a barrel on expectations of more crude hitting the market after a compromise deal between leading OPEC producers and a surprisingly poor weekly reading on U.S. fuel demand.

Brent crude settled at $73.47 a barrel, dropping $1.29, or 1.7%. U.S. West Texas Intermediate (WTI) crude settled at $71.65 a barrel, down $1.48, or 2.2%.

The slide continued Wednesday’s losses, after Reuters reported that Saudi Arabia and the United Arab Emirates had reached an accord that should pave the way for a deal to supply more crude to a tight oil market. A deal has yet to be solidified, and the UAE energy ministry said deliberations are continuing.

In New York, the Dow Jones industrial average was up 53.79 points at 34,987.02. The S&P 500 index was down 14.27 points at 4,360.03, while the Nasdaq composite was down 101.82 points at 14,543.13.

The Canadian dollar traded for 79.54 cents US compared with 80.02 cents US on Wednesday.

The 10-year U.S. Treasury note fell 5.7 basis points to yield 1.2989%, while the U.S. dollar index, which tracks a basket of six currencies, rose 0.24% to 92.639.

Wall Street traded lower even as the four largest U.S. consumer banks posted blockbuster second-quarter results earlier this week that were above analysts’ estimates.

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Investors are looking for visibility into future earnings as stocks have already surged in anticipation of stellar growth.

“We had the rally going into the earnings season. Now that we’re actually here, we’re seeing some softness. I wouldn’t be surprised if we don’t see a lot of strength during this reporting season,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Analysts expect strong earnings, with IBES data from Refinitiv showing consensus looking for a 65.8% gain from a year ago, making corporate guidance more important than results.

Energy and technology stocks led the decline on Wall Street, with defensive consumer staples and utilities the only two of 11 S&P 500 sectors to gain. Staples have pricing power that could help Procter & Gamble Co, Coca-Cola Co and others rise, once it is clear their margins remain intact, said Tom Hayes, founder and managing member of Great Hill Capital LLC.

“Guidance is the name of the game. A lot of good news is already baked into the market and even with strong guidance, you may get a breather here,” Hayes said.

The MSCI world equity index, which tracks shares in 50 countries, closed down 0.33% to 723.66 after touching a record high on Wednesday. Europe’s broad FTSEurofirst 300 index closed down 0.92% at 1,761.30, less than 20 points from an all-time peak set Monday.

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Losses in Europe were broad-based, with economically sensitive stocks such as banks, automakers and travel down between 0.3% and 1.6% as investors grew wary of rising COVID-19 cases and their potential economic impact.

Official data showed that the United Kingdom reported the highest daily increase in COVID-19 cases since Jan. 15.

China’s economic data showed average growth surpassed the first quarter, while June retail sales and industrial output beat expectations. But it also showed authorities, which only last week injected 1 trillion yuan into the financial system, will ensure that conditions stay loose.

The World Health Organization (WHO) COVID-19 dashboard reported the first weekly rise in global deaths from the virus in 10 weeks and a 5.6% jump in daily case numbers on Wednesday.

“The market is fearing the Delta variant could take a hold of different economies so you are almost seeing that we are back to the ‘bond yields lower, tech doing well’ scenario,” said Justin Onuekwusi, portfolio manager at Legal & General Investment Management.

The likes of Amazon and Google are up 6-8% this month, while China’s biggest tech firms Alibaba and Tencent have surged more than 12% since China’s central bank made a supportive policy tweak for the first time in nearly a year on Friday.

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The Canadian Press, Reuters, Globe staff

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