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At midday: TSX rises as RBC earnings boost financial stocks

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. in this file photo.

BRENDAN MCDERMID/REUTERS

Canada's main stock index rose on Wednesday, boosted by a jump in financial shares led by Royal Bank of Canada after the country's biggest lender reported a rise in third-quarter profit.

RBC's stock rose 1.55 per cent to C$93.44 after it kicked off the country's banking earnings season with double-digit growth at its wealth management business, which offset a weaker showing in its capital markets unit.

Rivals reporting over the next week made smaller gains, with the heavyweight financials group gaining 0.7 per cent overall.

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At 12:15 p.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was up 89.69 points, or 0.59 per cent, at 15,073.67. Seven of its 10 main sectors were higher.

Air Canada advanced 2.9 per cent to C$23.71 ahead of what the country's biggest airline called a major announcement about new air service from Montreal.

Iamgold Corp gained 3.7 per cent to C$7.49 and Cominar REIT jumped 5.2 per cent to C$13.47 after analysts at Bank of Montreal raised their price targets and recommendations on the stocks.

Gold and base metal miners perked up in line with a pick up in the price of the precious metal, with Barrick Gold Corp up 0.7 per cent at C$21.31.

Pipeline operators made gains even as the price of oil stagnated, with Enbridge Inc up 0.9 per cent at C$50.63 and TransCanada Corp adding 0.6 per cent to C$62.97.

U.S. stocks were lower late on Wednesday morning after President Donald Trump's warning of a government shutdown to secure funds to build the Mexico border wall added to nerves as the deadline to the raise the U.S. debt ceiling looms.

Lawmakers face a late-September deadline to raise the debt ceiling or risk a default, and Trump's comments on Tuesday evening came hours after a lawmaker said there was "zero chance" of the ceiling not being raised.

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Fitch Ratings said on Wednesday a failure by U.S. officials to raise the ceiling in a timely manner would prompt it to review its rating on U.S. sovereign debt, "with potentially negative implications."

"Trump saying he would be willing to shut down the government over the wall obviously doesn't really inspire much confidence in anyone," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"The debt limit, which is truly urgent and something that needs to be addressed, where theoretically failure should not be an option, that is something of a litmus test for the market."

Investors have grown increasingly concerned about the Trump's ability to legislate his pro-growth agenda given the near constant political rumblings in the White House.

At 12:15 p.m. ET, the Dow Jones Industrial Average was down 36.92 points, or 0.17 per cent, at 21,862.97 and the S&P 500 was down 3.84 points, or 0.16 per cent, at 2,448.67.

The Nasdaq Composite was down 9.31 points, or 0.15 per cent, at 6,288.20.

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The CBOE Volatility index, a widely followed measure of market anxiety, rose 0.55 points to 11.90, marking its first increase in four days.

Investors are also jittery ahead of Federal Reserve Chair Janet Yellen's speech in Jackson Hole, Wyoming, on Friday, which will be scrutinized for clues on the central bank's stand on monetary policy.

Also weighing on sentiment was data that showed new U.S. single-family home sales unexpectedly fell in July to a seven-month low.

Six of the 11 major S&P indexes were lower, with consumer discretionary index's 0.75 per cent fall leading the decliners.

Lowe's 5.5 per cent fall weighed the most on the S&P after the company reported a lower-than-expected profit and cut its margins forecast.

Bigger rival Home Depot dropped 2.28 per cent, weighing the most on the Dow.

Shares of advertising firm Omnicom dropped nearly 4.5 per cent, while Interpublic Group fell 3.7 per cent after WPP cut its sales forecast. WPP'S U.S.-listed shares sank about 12 per cent.

Advancing issues outnumbered decliners on the NYSE by 1,431 to 1,251. On the Nasdaq, 1,477 issues fell and 1,156 advanced.

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