TORONTO -- North American stock markets extended their record-setting streaks on reduced trade tensions and positive economic data on both sides of the border.

Investor optimism continued to be stoked by Wednesday's signing of Phase 1 of a U.S. trade deal with China, said Scott Guitard, vice-president and portfolio manager at Fiduciary Trust Canada.

"It takes a little uncertainty off the table even though there's still a lot of work left to be done there," he said in an interview, adding that economic data and corporate earnings will now receive more focus.

Guitard said he was surprised by the initial stock rally given how long the deal's details have been known.

"But it shows that it wasn't fully priced in. Maybe the market still had a bit of a risk priced in that something wouldn't happen in the near-term, but also I think it shows that investors are looking for positives in the market."

He said markets are a little vulnerable over the next 10 months to any setback in negotiations about Phase 2 or re-escalation in the trade war that lasted 18 months.

Investors were also buoyed by strong U.S. retail sales numbers and employment data in the U.S. and Canada.

Holiday sales, excluding auto, gas and restaurants, increased 4.1 per cent in December, near the top end of the National Retail Federation's forecast.

Also, the number of Americans filing claims for unemployment benefits dropped for a fifth straight week. In Canada, private-sector non-farm employment increased by 46,200 jobs from November to December, according to ADP Canada.

The S&P/TSX composite index closed up 69.60 points to a record close of 17,484.77, just short of the record intraday high of 17,489.56.

In New York, U.S. markets also set record closes after reaching new peaks. The Dow Jones industrial average was up 267.42 points at 29,297.64. The S&P 500 index was up 27.52 points at 3,316.81, while the Nasdaq composite was up 98.44 points at 9,357.13.

The Canadian dollar traded for 76.66 cents US compared with an average of 76.63 cents US on Wednesday.

Eight of the 11 major sectors rose in a broad-based rally that included industrials even though shares of Bombardier Inc. plunged nearly 32 per cent to a near four-year low in heavy trading. The transportation company had warned of weakened 2019 results, suggested it may withdraw from a partnership with Airbus and said it is considering alternatives to reduce its staggering debt.

The heavyweight financials sector was up 0.6 per cent as the steepening yield curve was positive for bank profits.

Materials decreased on lower gold prices as shares of Centerra Gold Inc. and Yamana Gold Inc. were down 3.25 and 2.6 per cent respectively.

The February gold contract was down US$3.50 at US$1,550.50 an ounce and the March copper contract was down 1.9 cents at US$2.85 a pound.

Health care and energy were down marginally.

Energy was lower despite an increase in crude oil prices on expectations that the U.S.-China trade deal will help global demand.

The March crude contract was up 69 cents at US$58.53 per barrel and the February natural gas contract was down 4.3 cents at US$2.08 per mmBTU.

Guitard doesn't foresee the record-setting trend ending any time soon as the focus turns to corporate earnings and economic data.

"We'll have to watch that a lot closer but there's no reason to think that that's going to change in the near-term just because we're hitting all time highs every day."