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Canada’s main stock index rose on Monday to its highest closing level in one week, helped by gains in the consumer discretionary sector and shares of e-commerce company Shopify Inc.

The S&P/TSX composite index ended up 43.12 points, or 0.2%, at 20,585.15. It followed a gain of 1.5% on Friday as data showed Canada’s economy adding more jobs than expected

“Nice follow-through from Friday’s move,” said Mike Archibald, a portfolio manager at AGF Investments. “The positioning in the market is very overweight to cash and underweight to equities and all those things present a fairly good opportunity for money to move itself back into the equity markets.”

Investors were awaiting U.S. inflation data on Wednesday for clues on the Federal Reserve policy outlook as well as a heavy slate of Canadian corporate earnings throughout the week.

Shopify shares rose 3.7% to the highest since April 2022 as several analysts raised their price targets on the stock. BlackBerry Ltd shares added to their recent gains, advancing 5.7%.

The technology sector rose 1.9%, while consumer discretionary was up nearly 1%.

In individual stock moves, Canaccord Genuity Group Inc shares slumped 13.2% after a management-led group, which has offered to take the company private, gave no assurance of completing its C$1.13 billion deal due to delays in securing regulatory approvals.

On Wall Street, stocks paused after a strong rally in the prior session. For most of the day, stocks struggled for direction amid disappointing earnings from Tyson Foods and Catalent and a short-lived rebound in regional banks.

Shares of Catalent Inc tumbled 25.74% as the contract drug manufacturer saw lower revenue and core profit in 2023, while Tyson Foods tanked 16.41% on a surprise second-quarter loss and a cut in its annual revenue forecast.

A rebound in shares of regional lenders ran out of steam by midday, with the KBW Regional Banking index falling 2.82% after posting its best single-day performance in seven weeks on Friday.

The Dow Jones Industrial Average fell 55.69 points, or 0.17%, to 33,618.69, the S&P 500 gained 1.87 points, or 0.05%, to 4,138.12 and the Nasdaq Composite added 21.50 points, or 0.18%, to 12,256.92.

The struggle for a clearer direction comes after a rally on Friday, when U.S. jobs data pointed to a resilient labor market.

“Whenever you have a big up day, people need more good news to keep the market up every day in a row,” said portfolio manager Moez Kassam of Anson Funds.

The spotlight this week will be on the Labor Department’s inflation reading, which is expected to show the consumer price index (CPI) likely climbed 0.4% in April after gaining 0.1% in March. Producer prices, weekly jobless claims and consumer sentiment data are all lined up for the week.

The data this week should help investors gauge whether the Federal Reserve’s aggressive tightening cycle - including its most recent 25 basis point hike last week - is helping tamp down inflation as well as whether fears of stagflation are founded.

“The bigger picture is inflation will remain higher for longer and that we are heading into a recession,” Michael James, managing director of equity trading at Wedbush Securities.

“Whether that’s hard or soft remains to be seen, but until there’s something to disprove that bigger picture thesis, the overall market is going to remain somewhat range bound.”

A rally in regional banks’ shares proved short-lived, with PacWest Bancorp paring gains to 3.65% after a surge of as much as about 30% earlier in the session after the lender sharply cut its quarterly dividend to boost capital.

Shares of regional banks tumbled for much of last week on worries tied to the collapse of First Republic Bank.

“We’ve had some stabilization in the stocks of middle market banks today because people are realizing prices were moving counter to where the fundamentals actually were,” said Carol Schleif, chief investment officer for BMO Family Office.

Warren Buffett’s Berkshire Hathaway Inc’s Class B shares rose 0.70% after posting a $35.5 billion first-quarter profit, boosted by gains from stocks such as Apple.

Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored decliners. The S&P 500 posted 12 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 66 new highs and 96 new lows.

Reuters, Globe staff

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