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Market News Financials help push TSX to record high, U.S. markets mixed

Canada’s main stock index hit a new record as gains in the financial sector sent the Toronto market higher but major U.S. stock indexes ended the day mixed.

The S&P/TSX composite index closed up 39.14 points at 16,682.42 after trading as high as 16,756.11 earlier in the morning. The index had hit an intraday record of 16,696.40 on Thursday.

Leading the index were SNC-Lavalin Group Inc, up 11.1%, First Quantum Minerals Ltd, up 9.7%, and ARC Resources Ltd , higher by 6.5%. Lagging shares were Shopify Inc , down 4.6%, First Majestic Silver Corp, down 4.3%, and Detour Gold Corp, lower by 4.0%.

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The TSX’s energy group rose 0.77 points, or 0.6%, while the financials sector climbed 2.42 points, or 0.8%.

The October crude contract was down 24 cents at US$54.85 per barrel and the October natural gas contract was up four cents at US$2.61 per mmBTU.

The December gold contract was down US$7.90 at US$1,499.50 an ounce and the December copper contract was up 5.90 cents at US$2.70 a pound.

The TSX is now up 16.5% for the year.

Wall Street

The S&P 500 ended the day down slightly on Friday but less than 1% below its all-time high as a drop in Apple stock countered cooling U.S.-China trade tensions.

Tariff-vulnerable industrials helped keep the blue-chip Dow in positive territory, which has now gained in eight straight sessions, its longest winning streak since May 2018.

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All three major U.S. stock indexes posted their third straight weekly gains, capping a week that saw signs of a potential thaw in the trade war between the world’s two largest economies, which has gripped markets for months.

Apple Inc was the biggest drag on the major stock averages, falling 1.9% after Goldman Sachs cut its price target for the iPhone maker’s shares.

Beijing announced it would exempt some U.S. agricultural products from additional tariffs after President Donald Trump suggested he could be open to an interim deal, the latest conciliatory gestures by both sides of the trade war ahead of next month’s negotiations in Washington.[ ]

“Apple is holding back the averages,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “Another factor is we have a huge rally in (Treasury) yields, the 10-year is up substantially. Those two factors are holding back the market and dampening the enthusiasm that some kind of cosmetic trade deal is on its way.”

However, rising Treasury yields did boost interest-rate sensitive financials, which gained 0.8%.

On the economic front, U.S. retail sales increased in August at twice the rate analysts expected, according to the Commerce Department, suggesting that strong consumer spending will continue to support the longest-ever U.S. economic expansion.

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“The consumer is pretty cheerful,” Cardillo added. “Going into the holiday season the consumer is likely to continue to spend, and that bodes well as far as the consumer-led economy is concerned.”

Ebbing trade jitters and upbeat retail sales data helped U.S. Treasury yields reach multi-week highs, providing an attractive alternative to risk-averse investors.

Market participants now look to the U.S. Federal Reserve, which is widely expected to cut interest rates by 25 basis points at the conclusion of its monetary policy meeting next week.

The Dow Jones Industrial Average rose 37.07 points, or 0.14%, to 27,219.52, the S&P 500 lost 2.18 points, or 0.07%, to 3,007.39 and the Nasdaq Composite dropped 17.75 points, or 0.22%, to 8,176.71.

Of the 11 major sectors in the S&P 500, five closed in the red, with real estate suffering the largest percentage loss, 1.3%.

Materials was the biggest percentage winner, gaining 1.1%.

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Chipmaker Broadcom Inc slipped 3.4% after the company missed quarterly revenue estimates late Thursday and said that while semiconductor demand has likely hit bottom, the timing of a recovery remains uncertain.

Progressive Corp fell 5.6% after the insurer reported a 36% year-on-year drop in August net income.

Lumber Liquidators Holdings Inc plunged 13.2% after founder Thomas Sullivan told Bloomberg he was holding off on plans to take the company private.

Reuters, The Canadian Press

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