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At the open: TSX hits fresh high as Valeant jumps on profit beat

A Toronto Stock Exchange (TSX) logo is seen in Toronto in this file photo.

© Mark Blinch / Reuters

Canada's main stock index opened to a fresh record on Tuesday, amid broad, but moderate gains, and as Valeant Pharmaceuticals International jumped on better-than-expected quarterly results.

The Toronto Stock Exchange's S&P/TSX composite index was up 16.5 points, or 0.1 per cent, to 16,108.70 shortly after the open.

Eight of the index's 10 key sectors were higher, with energy and materials the lone decliners.

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Valeant was up 17.4 per cent to $18.11 in early trading.

The Canadian dollar weakened against its broadly firmer U.S. counterpart on Tuesday ahead of a speech by Bank of Canada Governor Stephen Poloz and as oil prices dipped.

At 9:21 a.m. ET, the Canadian dollar was trading at $1.2777 to the greenback, or 78.27 U.S. cents, down 0.6 per cent.

The currency traded in a range of $1.2703 to $1.2783. On Monday, it touched its strongest in 12 days at $1.2701.

Mr. Poloz will discuss central banks' ability to understand inflation, with investors looking for clues on the timing of further interest rate increases.

The Bank of Canada is expected to hold rates steady in December after raising them twice earlier this year. But data last Friday showing unexpected strength in the nation's job market has supported expectations of increases next year.

The central bank will release Mr. Poloz's prepared remarks at 12:55 p.m. ET and the governor will hold a press conference at 2 p.m. ET.

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The Dow hit a record high at the open on Tuesday while the S&P and the Nasdaq were hovering near record levels, as earnings season winds down and investor expectations shift to a much-awaited cut in corporate taxes.

The Dow Jones Industrial Average rose 19.08 points, or 0.08 per cent, to 23,567.5. The S&P 500 gained 1.33 points, or 0.05 per cent, to 2,592.46. The Nasdaq Composite dropped 0.72 points, or 0.01 per cent, to 6,785.72.

Negotiations on President Donald Trump's tax bill have begun after House Republicans last week unveiled a first draft that proposes a range of cuts aimed at helping businesses, including slashing the corporate rate to 20 per cent from 35 per cent.

U.S. stocks climbed to record highs on Monday, helped by optimism about merger activity and as investors bet that the tax bill would bolster earnings.

The S&P has risen about 15 per cent in 2017 on the back on strong earnings, an improving economy and Mr. Trump's promise to cut taxes.

With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8 per cent, compared with expectations of a 5.9 per cent rise at the start of October, according to Thomson Reuters I/B/E/S.

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"While the market remains in place for further gains, the unwinding of the earnings season is likely to slow the pace of gains as the battle of tax reform lurks in the background," said Peter Cardillo, chief market economist at First Standard Financial.

Investors are also awaiting a speech from outgoing Federal Reserve Chair Janet Yellen and Fed Vice Chair for Supervision Randal Quarles.

Ms. Yellen will give acceptance remarks at a presentation of the Paul H. Douglas Award for Ethics in Government in Washington at 2:30 p.m. ET.

Her speech will come less than a week after President Donald Trump chose Fed governor Jerome Powell to replace Yellen at the end of her term in 2018.

Mr. Quarles will take part in a discussion on financial regulation. This will be Mr. Quarles' first extensive public comments since taking up the job and Wall Street will be keen to hear on the deregulation of banks from Mr. Trump's nominee.

The global rally in stocks showed no sign of slowing on Tuesday, as upbeat investors pushed the most widely-tracked index of world stocks up for a ninth straight day and it sailed past the 500-point barrier.

The latest leg of the run came as Japan's Nikkei hit its best level since 1992, Germany's DAX scored a record high and Monday's 2-1/2 year top in oil prices lifted European resources stocks again.

The now 500-point MSCI 47-country 'All World' index added 0.2 per cent to its almost-20-per-cent rise for the year.

"You've had almost a perfect backdrop for equities," said Pictet Asset Management's global strategist Luca Paolini.

"You have acceleration in nominal growth, earnings are between 10-15 globally and whatever you look at is pretty much in double digits."

The only bears remained in the Gulf, as nervousness around the weekend purge of Royals and officials in Saudi Arabia sent its stock market down again and Kuwait's bourse tumbling more than 4 percent.

Oil prices meanwhile held on to most of their gains, after posting the biggest rise in six weeks following the Saudi moves which had seen the crown prince tighten his grip on power and crank up tensions between the kingdom and Iran.

U.S. crude drifted back to $57.24 in Europe after going as high as $57.69 and Brent crude futures were at $64.04 after touching a peak of $64.65 a barrel.

The dollar was also back on the move in the currency markets, amid signs of more change at the Federal Reserve and that Donald Trump's Republican party is inching closer to a long-awaited tax cut programme.

It pushed the euro down to $1.1572 - the single currency's lowest since mid-July - having also found some traction against the yen overnight.

The dollar index, which tracks the greenback against a basket of six major currencies, added 0.3 per cent to top the 95 points mark..

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