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Canada’s main stock index rose on Monday amid renewed hopes that the United States and China would soon resolve their trade dispute, after President Donald Trump said he would delay raising tariffs on Chinese imports.

The announcement was the clearest sign yet that the two sides are closing in on a deal to end their prolonged trade spat.

Trump also said he would hold a summit with China to sign a final trade deal, a day after signaling that he planned to meet with Chinese President Xi Jinping to conclude an agreement.

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The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 44.02 points, or 0.27 per cent, at 16,057.03. The financial sector rose 0.5 per cent, as Manulife Financial jumped 2 per cent and Sun Life Financial Inc. increased 1.5 per cent.

Energy stocks finished 0.6 per cent despite a dip in oil prices.

Marijuana producers led health care stocks lower by 0.7 per cent. Cronos Group Inc. fell 7.3 per cent, while Aphria Inc. closed 4.4 per cent lower.

Leading the index were SNC-Lavalin Group Inc., up 6.3 per cent, New Gold Inc., up 6 per cent, and First Majestic Silver Corp., higher by 5.1 per cent

But gains were capped after weeks of advances for the S&P 500, the Dow Jones Industrial Average and the Nasdaq, partly due to trade optimism and dovish signals from the Federal Reserve.

“A lot of the good news related to trade is priced in at this point,” said R.J. Grant, head of trading at Keefe, Bruyette & Woods in New York.

“There’s only so much we can rally when somebody says we’re making progress... The trade stuff is a little bit of a sideshow. If you get back to looking at economic growth, it’s clearly slowing.”

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The S&P 500 index ended 4.9 per cent below its late September record closing high after narrowing the gap to 4.3 per cent earlier in the session.

Investors were also looking ahead to an appearance by Fed Chairman Jerome Powell before a U.S. Senate committee on Tuesday.

“In the short term trade got taken off the table today so next up on the calendar is Powell speaking to Congress. It’s possible investors are starting to clam up a bit because of what they think Powell may say,” said Michael Cuggino, portfolio manager at Permanent Portfolio Funds in San Francisco.

The Dow Jones Industrial Average rose 60.14 points, or 0.23 per cent, to 26,091.95, the S&P 500 gained 3.44 points, or 0.12 per cent, to 2,796.11 and the Nasdaq Composite added 26.92 points, or 0.36 per cent, to 7,554.46.

Investors were also wary of weakening estimates for current quarter earnings, with Wall Street on Monday expecting a 0.9-per-cent decline in S&P first-quarter earnings per share compared with expectations for 5.3-per-cent growth on Jan. 1, according to IBES data from Refinitiv.

“It’s hard to get valuations to continue to rise in the face of falling earnings estimates,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab in Boston.

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Of the S&P’s 11 major sectors, 7 ended the day with gains.

After advancing as much as 1.4 per cent, the financials index lost ground late in the day to close up 0.4 per cent.

The S&P technology index rose 0.5 per cent. The Philadelphia semiconductor index climbed 0.8 per cent as chip companies have a big exposure to China.

The industrials sector rose 0.4 per cent, getting its biggest boost from General Electric Co, which gained 10.8 per cent after announcing a sale of its biopharma business to Danaher Corp for $21.4 billion. Danaher shares rose 8.2 per cent.

A flurry of M&A activity also helped the risk-on sentiment.

The Nasdaq Biotechnology Index rose 2 per cent, its biggest boost coming from shares in Spark Therapeutics Inc , which soared 120 per cent after Swiss drugmaker Roche Holding AG agreed to buy it for $4.3 billion.

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The biggest laggards were the S&P’s defensive sectors - consumer staples, utilities and real estate . The consumer discretionary sector also ended down 0.3 per cent, with the biggest drag from Home Depot, down 1.3 per cent, on concerns about a soft housing market ahead of its quarterly results.

Reuters

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