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Canadian Stocks Are Paring Early Gains - Canadian Commentary

The Canadian stock market got off to a positive start Wednesday, but has since given back much of its early gains. Energy and information technology stocks are climbing this morning, while industrials and financials are struggling.

Markets in Europe are trading in the green Wednesday. However, after a solid start to the session the markets have begun to pare their gains following the open on Wall Street.

Markets on Wall Street got off to a solid start Wednesday, but appear to be having trouble extending their gains. The results of yesterday's midterm elections were in line with expectations, with Democrats retaking control of the House and Republicans retaining control of the Senate. Traders remain somewhat cautious ahead of tomorrow's policy decision from the Federal Reserve.

The benchmark S&P/TSX Composite Index is up 33.52 points or 0.22 percent at 15,326.23.

On Tuesday, the index closed up by 75.01 points or 0.49 percent, at 15,292.71. The index scaled an intraday high of 15,295.31 and a low of 15,220.16.

The Capped Information Technology Index is gaining 2.67 percent. BlackBerry (BB.TO) is rising 2.10 percent and Constellation Software (CSU.TO) is up 1.43 percent. Descartes Systems Group (DSG.TO) is higher by 1.50 percent and Sierra Wireless (SW.TO) is adding 1.88 percent.

The Energy Index is rising 0.83 percent. Suncor Energy (SU.TO) is increasing 2.44 percent and Enbridge Inc. (ENB.TO) is adding 0.28 percent. Crescent Point Energy (CPG.TO) is gaining 0.67 percent and Husky Energy (HSE.TO) is higher by 1.30 percent. Encana (ECA.TO) is advancing 0.61 percent and Cenovus Energy (CVE.TO) is climbing 1.68 percent.

Imperial Oil (IMO.TO) is up 0.12 percent after it announced that it will go ahead with its $2.6-billion Aspen oilsands project. Construction will begin this year, with the project expected to start up in 2022, the company said. The Aspen project, located about 45 kilometres northeast of Fort McMurray, Alta., is expected to produce about 75,000 barrels of bitumen per day.

The Capped Industrials Index is down 0.28 percent. Canadian National Railway (CNR.TO) is lower by 0.61 percent. WestJet Airlines (WJA.TO) is surrendering 0.11 percent and Finning International (FTT.TO) is decreasing 0.22 percent.

Canadian Pacific Railway (CP.TO) is falling 0.22 percent after it announced that it delivered record shipments of grain and biofuels in October. The railway said it moved 2.64 million tonnes of Canadian grain and grain products in the month, breaking the previous high set in September 2017. The company said it has shipped more than 7.5 million tonnes of grain and grain products through 14 weeks of the 2018-19 crop year.

The heavyweight Financial Index is decreasing 0.14 percent. Bank of Nova Scotia (BNS.TO) is losing 0.08 percent and Bank of Montreal (BMO.TO) is declining 0.07 percent.

Spin Master Corp. (TOY.TO) is falling 2.52 percent after it reported adjusted net income of US$117.7 million, or US$1.16 per share, for the third quarter, compared to US$111.7 million, or US$1.10 per share, in the year-ago quarter.

On the economic front, Euro area retail sales were unchanged in September after growing in the previous month, preliminary data from Eurostat showed on Wednesday. Retail sales were flat on the month, while economists were looking for a modest 0.1 percent gain.

Germany's industrial production unexpectedly rose for a second straight month in September, adding to the positive sentiment provided by the orders data released earlier.

Production grew a calendar and seasonally adjusted 0.2 percent from the previous month, preliminary figures from the Federal Statistical Office showed on Wednesday. Economists had forecast a 0.1 percent decline.

German construction activity declined for the first time since March during October, survey data from IHS Markit showed on Wednesday. The construction Purchasing Managers' Index fell to 49.8 from 50.2 in September. A score below 50 suggests contraction in the sector.

UK house price inflation eased sharply in October to its lowest level since March 2013, survey data from IHS Markit and Lloyds Banking Group unit Halifax showed on Wednesday. The Halifax house price index rose 1.5 percent year-on-year in the three months to October, which was sharply slower than the 2.5 percent increase in September. Economists had forecast a 1.3 percent climb.

In commodities, crude oil futures for December delivery are up 0.19 or 0.31 percent at $62.40 a barrel.

Natural gas for December is down 0.047 or 1.32 percent at $3.508 per million btu.

Gold futures for December are up 4.50 or 0.37 percent at $1,230.80 an ounce.

Silver for December is up 0.135 or 0.93 percent at $14.635 an ounce.

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