Canadian Stocks Pull Back Off Early Highs But Continue To See Modest Strength

After an early move to the upside, Canadian stocks have given back some ground but continue to see modest strength during trading on Wednesday.

The benchmark S&P/TSX Composite Index is currently up 73.09 points or 0.3 percent at 21,347.90 after reaching an early high of 21,449.92.

The early strength in the market came following the release of the Labor Department's highly anticipated report on U.S. consumer price inflation in December.

While the report showed the annual rate of consumer price growth once again reached the highest level in almost 40 years, traders seemed relieved the acceleration was not even more significant.

Buying interest has waned since then, but strength in the energy sector has helped to support the market, with the S&P/TSX Capped Energy Index climbing by 1.4 percent.

The strength among energy stocks comes amid a continued increase by the price of crude oil, as crude for February delivery is jumping $1.65 to $82.87 a barrel.

Crude oil has benefited from continued optimism about the outlook for energy demand as well as a report showing a much bigger than expected weekly decrease in U.S. crude oil inventories.

Materials stocks are also turning in a strong performance following data showing easing Chinese inflation, driving the S&P/TSX Capped Materials Index up by 1.4 percent.

On the other hand, healthcare stocks have shown a significant move to the downside on the day, resulting in a 2.1 percent slump by the S&P/TSX Capped Health Care Index.

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