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Market News The close: Dow jumps 545 points after midterm vote; TSX gains with marijuana, tech stocks

Canada’s main stock index closed higher Wednesday, after strong quarterly results from tech companies boosted the market and investors dove back into marijuana stocks. U.S. stocks ended more than 2 per cent higher with broad gains led by the technology and healthcare sectors as investors, relieved to have midterm elections behind them, made bets that a divided Congress would be good for equities.

Based on the latest available data, the S&P/TSX Composite Index close up 76.72 points, or 0.5 per cent, at 15,369.43.

The Dow Jones Industrial Average rose 545.29 points, or 2.13 per cent, to 26,180.3, the S&P 500 gained 58.36 points, or 2.12 per cent, to 2,813.81 and the Nasdaq Composite added 194.79 points, or 2.64 per cent, to 7,570.75.

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Ten of the Toronto index’s 11 major sectors were higher, led by health care stocks, up 4.8 per cent, and technology stocks gained 2.6 per cent.

Canopy Growth rose 8 per cent, Aurora rose 9 per cent and Aphria added 3.7 per cent.

Helping tech was a 4.7-per-cent rise in Shopify Inc., 3-per-cent increase in CGI Group Inc. shares and a 6.5-per-cent jump in shares of Solium Capital Inc.

Top percentage gainer on the TSX was Home Capital Group , which jumped 24 per cent after quarterly earnings beat estimates.

In the U.S., Democrats won control of the House of Representatives on Tuesday, while President Donald Trump’s Republican party expanded its Senate majority, pointing to a political gridlock in Washington.

The S&P’s biggest boosts came from the S&P technology sector, which rose 2.9 per cent, and the healthcare index , which gained 2.9 per cent as investors were more comfortable taking on risky bets. The consumer discretionary sector was also a strong gainer, up 3.1 per cent, as Amazon soared 6.8 per cent.

“I don’t think any of Trump’s agenda that he’s already accomplished gets unwound. That was the main point of concern for investors,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “We’ve got a relief rally because the market got exactly what it expected.”

While a divided Congress will make it harder for Trump’s administration to push through new legislation such as additional tax cuts, investors were not expecting a reversal of tax cuts and deregulation measures that have already been enacted.

Some strategists said Democratic control of the House means President Donald Trump would have a harder time gaining support for efforts to impose more regulations on Amazon, which rose 6 per cent providing the S&P 500’s biggest boost from a single stock.

But even as technology and healthcare stocks soared, investors questioned whether the sectors could now be more at risk of additional regulatory scrutiny.

Following a steep selloff in October, the S&P 500 was still roughly 5 per cent below its record high reached in December, as investors still had their eyes on rising interest rates and a U.S.-China trade war.

The Federal Reserve began its two-day monetary policy meeting on Wednesday, but was not expected to raise rates until December.

Bank stocks were up but underperforming the broader market as Treasury yields slipped and investors bet that the divided Congress would hamstring any efforts for additional fiscal stimulus.

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Health insurers Humana Inc., Anthem Inc. and UnitedHealth Group Inc. jumped to record highs as voters in three states approved expanding Medicaid programs for low-income people. The stocks were up between 4 and 6 per cent.

DaVita Inc. jumped 10 per cent after California rejected a proposal to limit the rates dialysis clinics can charge commercially insured patients.

Anadarko Petroleum Corp. surged 5.7 per cent and Noble Energy Inc jumped 4.1 per cent after Colorado voters a rejected a tougher rule on oil and gas drilling, which spurred shares of companies operating in the state.

Among the laggards were luxury handbag maker Michael Kors Holding Ltd. and beauty products maker Coty Inc., which tumbled 14.6 per cent and 22.5 per cent, respectively, after both missed quarterly revenue estimates.

With files from Reuters

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