Financial and consumer stocks lift Canada's main stock index; U.S. stocks also up

TORONTO — North American stock markets ended a week of losses by setting record highs Monday on renewed signs of a trade deal between the world’s two largest economies.

“Good start to the week for sure,” said Craig Fehr, Canadian markets strategist, Edward Jones.

Investors welcomed a report from a Chinese state-backed newspaper that the U.S. and China were very close to a partial deal along with a rumour that China may be willing to strengthen rules around intellectual property theft, a major U.S. demand.

“The big takeaway there is that IP theft, technology transfers, the entire enforcement around any trade deals is really at the heart of any bigger compromise that we’re going to see longer term,” Fehr said in an interview.

“And so to see an acknowledgment of intellectual property theft coming into the fore of these negotiations I think is a broad positive and markets are responding favourably to that today.”

In addition, the announcement of some mergers and acquisitions is a signal of optimism about growth. Charles Schwab is buying rival TD Ameritrade for about US$26 billion and French luxury group LVMH is paying US$16.2 billion for Tiffany.

“It suggest that the economic cycle and the business cycle is not fully exhausted at this stage,” said Fehr.

The S&P/TSX composite index closed up 78.02 points at 17,032.86 after hitting an intraday record of 17,048.47.

In New York, the Dow Jones industrial average was up 190.85 points at 28,066.47. The S&P 500 index was up 23.35 points at 3,133.64, a record high, while the Nasdaq composite was up 112.60 points at 8,632.49 and an intraday record of 8,631.08.

The Canadian dollar traded for 75.15 cents US compared with an average of 75.26 cents US on Friday.

Eight of the 11 major sectors of the TSX were higher

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