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S&P/TSX composite sets new record highs as U.S. stock markets mixed

TORONTO — Canada's main stock index pushed further into record high territory Tuesday even as U.S. markets were mixed on a report of lingering tariffs on Chinese goods. The S&P/TSX composite index closed up 59.
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TORONTO — Canada's main stock index pushed further into record high territory Tuesday even as U.S. markets were mixed on a report of lingering tariffs on Chinese goods.

The S&P/TSX composite index closed up 59.48 points to set a new closing high of 17,352.90 after posting an intraday record of 17,356.47.

The Toronto stock market rose on gains from nine of the 11 major sectors, including materials and energy.

In New York, the Dow Jones industrial average was up 32.62 points at 28,939.67. However, the S&P 500 index was down 4.98 points at 3,283.15, and the Nasdaq composite was down 22.60 points at 9,251.33.

While investors welcome Wednesday's signing in Washington, D.C., of the first phase of a trade agreement between the U.S. and China, a news report ignited concerns that some hefty tariffs will remain in place through the November U.S. presidential election.

Although a proposed new round of tariffs on US$160 billion of goods would be scrapped, 25 per cent duties would remain on about US$250 billion of Chinese imports and existing tariffs would be cut in half to 7.5 per cent on US$112 billion of products.

The negative tariff headlines kickstarted algorithm program traders to sell off even though the news was previously known, said Allan Small, senior investment adviser at HollisWealth.

"This was not expected that an announcement like that would be made but we didn't anticipate them to remove the tariffs," he said in an interview.

Markets initially rose on positive earnings results from U.S. banks JP Morgan & Chase Co. and Citibank along with tech companies tied to China. But they turned negative on the tariff report.

"The techs really took it on the chin and started to sell off on that news which in my opinion is not valid. So it was a tech-led day until the announcement. Techs have sold off and that's brought the whole market down."

The big bank earnings results demonstrated that U.S. consumers continue to spend money to drive the economy higher, said Small.

JP Morgan shares closed 1.2 per cent higher after being up as much as 2.6 per cent in earlier trading.

"JP Morgan is definitely helping power the Dow higher," said Small.

The Canadian dollar traded for 76.56 cents US compared with an average of 76.64 cents US on Monday.

In Canada, the only sectors to fall were technology and telecommunications.

Materials climbed 1.1 per cent with Kinross Gold Corp., Yamana Gold Inc. and Teck Resources Ltd. up as much as 2.6 per cent despite a drop in gold prices.

The February gold contract was down US$6.20 at US$1,544.40 an ounce and the March copper contract was up 0.40 of a cent at US$2.86 a pound.

Canadian Natural Resources and Suncor Energy Inc. led the energy sector higher as crude oil prices rose for the first time in seven trading sessions.

The February crude contract was up 15 cents at US$58.23 per barrel and the February natural gas contract was up half a cent at US$2.19 per mmBTU.

The health care sector led the TSX by gaining nearly two per cent even though shares of Aphria Inc. lost 3.5 per cent as it slashed its outlook after a delay in opening additional Ontario cannabis stores and a ban on vape products in Alberta.

The increase was driven by cannabis producers Cronos Group Inc., Hexo Corp. and Aurora Cannabis Inc.

This report by The Canadian Press was first published Jan. 14, 2020.

Companies in this story: (TSX:CRON, TSX:HEXO, TSX:ACB, TSX:APHA, TSX:K, TSX:YRI, TSX:TECK.B, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press




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