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North American markets scaled new records on Thursday as the U.S.-China trade deal, strong corporate earnings south of the border and encouraging U.S. economic data lifted stocks.

Oil rose as the long-awaited Phase 1 trade deal brought some relief to markets, while gold prices slid briefly below the psychological level of $1,500 an ounce as the upbeat data signaled a healthy U.S. economy.

U.S. retail sales increased for a third straight month in December and the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, indicating the labor market remained strong.

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Other data showed a gauge of manufacturing activity in the U.S. Mid-Atlantic region rebounded in January to its highest in eight months, leading the Federal Reserve Bank of Philadelphia to call the factory outlook the brightest in more than 18 months.

Upbeat earnings from Morgan Stanley and a tech rally on Wall Street added to optimism from a trade deal investors hope will take the edge off an 18-month U.S.-Sino dispute that has roiled markets and crimped global growth.

“We believe the agreement underpins a positive outlook for risk assets, especially emerging market stocks,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

“But it is also important for investors to understand the limitations of the deal. So we see the deal as representing a partial calming rather than an end to trade tensions.”

MSCI’s gauge of stocks across the globe gained 0.36 per cent to an all-time high, while emerging market stocks rose 0.09 per cent.

In Toronto, the S&P/TSX Composite index was unofficially up 69.60 points, or 0.4 per cent, at 17,484.77.

Canadian manufacturer Bombardier Inc.’s shares tumbled more than 31 per cent to their lowest level since March 2016 after the company warned of lower 2019 profits and said it might have to write down significantly the value of its partnership with Airbus on A220 jets.

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Also lifting the mood was a report from payroll services provider ADP which showed Canada added 46,200 jobs in December, the sixth straight month of gains.

The materials sector, which includes precious and base metals miners, lost 0.8, while the energy sector slid 0.5 per cent.

Leading the index were Aurora Cannabis Inc., up 4.5 per cent, Celestica Inc., up 4.1 per cent, and Ballard Power Systems Inc., higher by 3.7 per cent.

Lagging shares were Bombardier Inc., down 31.6 per cent, Iamgold Corp., down 6.5 per cent, and Pan American Silver Corp., lower by 4.7 per cent.

The S&P 500 hit the 3,300 mark for the first time on Thursday and the other main U.S. indexes also surged to record highs, fueled by solid retail sales data and earnings.

The Dow Jones Industrial Average rose 267.42 points, or 0.92 per cent, to 29,297.64, the S&P 500 gained 27.52 points, or 0.84 per cent, to 3,316.81 and the Nasdaq Composite added 98.44 points, or 1.06 per cent, to 9,357.13

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Technology stocks provided the biggest boost on Wall Street, with Apple Inc up more than 1.2 per cent and chipmakers gaining after a strong forecast from the world’s top contract chipmaker TSMC signaled a recovery in the sector.

The Philadelphia Semiconductor index climbed 1.2 per cent.

Morgan Stanley jumped 6.7 per cent after it beat quarterly profit estimates and raised its performance goals, closing out fourth-quarter results at the big U.S. banks on a strong note.

European shares edged higher but Asia saw China’s biggest stocks take a slight dip overnight.

The pan-European STOXX 600 index rose 0.22 per cent.

The dollar index erased earlier losses to rise on the data.

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“The data flurry was positive, particularly the Philly Fed number,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. It “reduces the probability for a recession, which was low already.”

The dollar index rose 0.1 per cent, with the euro down 0.15 per cent to $1.1132. The Japanese yen weakened 0.20 per cent versus the greenback at 110.13 per dollar.

Crude oil gains of more than 1 per cent were capped after the International Energy Agency said it expected oil production to outpace demand.

Brent gained 62 cents to settle at $64.62 a barrel and West Texas Intermediate advanced 71 cents to settle at $58.52 a barrel.

China committed to buying more than $50 billion in additional U.S. oil, liquefied natural gas and other energy products over two years, according to the trade deal.

Central banks were active, with both Turkey and South Africa cutting their interest rates again after policy meetings.

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The European Central Bank published a largely upbeat set of meeting minutes ahead of a speech from its chief, Christine Lagarde.

U.S. Treasury yields rose slightly on the strong economic data and bank earnings.

The benchmark 10-year yield was up 2.1 basis points at 1.8091 per cent.

U.S. gold futures settled down 0.2 per cent at $1,550.50 an ounce.


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