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Canadian Stocks Recover After Weak Start

The Canadian stock market recovered after a weak start Wednesday morning, and was up with modest gains a little before noon, with information technology shares seeing some strong buying.

The early decline was due to disappointing retail sales and industrial output data from the U.S. and weak Canadian inflation data.

The market recovered on reports U.S. President Donald Trump is likely to delay imposing steep tariffs on auto imports by about six months.

The benchmark S&P/TSX Composite Index is up 42.30 points, or 0.26%, at 16,326.83, after having dropped to a low of 16,229.69 in early trades.

The Capped Information Technology Index is up nearly 2%. Enghouse Systems (ENGH.TO) is gaining about 4% after the company said it has acquired Vidyo, Inc. for a purchase price of approximately $40 million. Vidyo's annual revenue is approximately $60 million.

Shopify Inc. (SHOP.TO) is rising 3.5% and BlackBerry (BB.TO) is up 1.4%, while CGI Inc. (GIB.A.TO), Constellation Software (CSU.TO) and Open Text Corporation (OTEX.TO) are gaining 0.5 to 1%.

Cannabis shares Green Organic Dutchman Holdings (TGOD.TO), Hexo Corp. (HEXO.TO) and CannTrust Holdings (TRST.TO) are up 2.5 to 3%.

Aurora Cannabis (ACB.TO) is down marginally despite the company reporting a surge in quarterly revenue.

Crescent Point Energy (CPG.TO), up 1.5%, is among the prominent gainers in the energy space.

Keyera Corp. (KEY.TO) is rising nearly 8% despite the company reporting a drop in quarterly earnings. The company said it posted net earnings of $33.8 million in the first quarter, compared to $87.7 million in the year-ago quarter.

Corus Entertainment Inc. shares are down more than 17% with Shaw Communications Inc. selling its stake in Corus for $548 million.

Among gold stocks, Kinross Gold Corporation (K.TO), IAM Gold (IMG.TO) and Roxgold Inc. (ROXG.TO) are up with solid gains, while Barrick Gold Corporation (ABX.TO) is down 0.6%.

In economic news, data from Statistics Canada said inflation rose 2% on year-over-year basis in April, following a 1.9% increase in March. On a seasonally adjusted monthly basis, the Consumer Price Index rose 0.3% in April.

Meanwhile, a report from the Canadian Real Estate Association said Home sales recorded via Canadian MLS Systems rose by 3.6% month-on-month in April 2019.

U.S. stocks too recovered after a weak start. The major averages are currently up with modest gains.

Data from the Commerce Department showed retail sales edged down by 0.2% in April after spiking by an upwardly revised 1.7% in March.

Economists had expected retail sales to rise by 0.2% compared to the 1.6% jump originally reported for the previous month.

The Federal Reserve report said industrial production fell by 0.5% in April following a revised 0.2% uptick in March. Economists had expected production to come in unchanged.

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