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A TSX tote board is pictured in Toronto in this file photo.Frank Gunn/The Canadian Press

Canada's main stock index posted its biggest gain in three months on Tuesday, led by financial sector gains, while resource shares also climbed, helped by higher oil prices and watchdog approval of a merger between potash producers.

The Toronto Stock Exchange's S&P/TSX composite index unofficially closed up 103.11 points, or 0.69 per cent, at 15,143.41. Nine of its 10 main groups ended higher

Home Capital Group Inc. rose after shareholders on Tuesday rejected a proposal for Warren Buffett's Berkshire Hathaway to raise its stake in the company, voting against the board's recommendation in a third defeat for the U.S. billionaire this year.

Shares of the company see-sawed after resuming trading at midday, initially falling as much as 3 per cent and later gaining as much as 3.3 per cent. They closed up 1.8 per cent at $14.33.

Bombardier Inc rose 0.4 per cent to $2.42 as Britain and Canada team up to intervene in a dispute between the Canadian aircraft maker and Boeing Co.

The heavyweight financials group gained 0.7 per cent, with Bank of Montreal up 0.6 per cent to $91.43, Toronto-Dominion Bank up 0.4 per cent at $66.68 and insurer Manulife Financial Corp adding 1.5 per cent to $24.29 as Hurricane Irma appeared to have caused less damage than feared.

Agrium gained 0.1 percent to $124.44 and Potash Corp also rose 0.1 per cent to $22.20 after Canada's Competition Bureau said it will not challenge their proposed merger.

The Canadian dollar weakened on Tuesday against its U.S. counterpart, as Canada's yield advantage moderated and the greenback gained broadly.

The gap between Canada's 5-year yield and its U.S. equivalent narrowed by 1.8 basis points to a spread of 3.1 basis points. Last week, the spread pushed above parity for the first time in nearly three years after the Bank of Canada raised interest rates for the second time in three months.

The Bank of Canada struck back on Monday against criticism it had not adequately prepared markets for last week's rate hike after a prominent economist took issue with the central bank's lack of communication in the nearly two months leading up to the move.

The U.S. dollar rose against a basket of major currencies as investors further unwound bearish bets against it following a bounce in Treasury yields and ahead of U.S. inflation data flagged as the next risk event for the market.

The Canadian dollar was trading at $1.218 to the greenback, or 82.10 U.S. cents, down 0.3 per cent.

The S&P 500 hit a record closing high for the second day in a row on Tuesday, with financial stocks leading the charge, but gains were stunted by a decline in Apple Inc shares after it unveiled its latest iPhone.

Nasdaq also clocked a record closing high despite weakness from Apple. Investors were more comfortable with riskier assets as concerns about U.S. tensions with North Korea eased and the financial impact from Hurricane Irma appeared less severe than feared last week.

The financial sector was the S&P 500's biggest driver as bank stocks were helped by rising U.S. Treasury yields, while the utilities and real estate sectors lost ground.

"It's a better environment for risk assets. As long as these two issues North Korea and the hurricane - have receded as concerns, it gives investors a green light to focus on stronger fundamentals," said David Joy, chief market strategist at Ameriprise Financial in Boston.

The Dow Jones Industrial Average rose 61.49 points, or 0.28 per cent, to 22,118.86, the S&P 500 gained 8.37 points, or 0.34 per cent, to 2,496.48 and the Nasdaq Composite added 22.02 points, or 0.34 per cent, to 6,454.28.

Concerns about Hurricane Irma's impact receded as it weakened to a tropical depression, while investors shrugged off fresh developments related to North Korea.

"A lot of it is the realization that the latest hurricane wasn't as devastating in the U.S. as people feared," said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York.

Apple's shares closed a volatile trading session 0.4 per cent lower at $160.82 after rising as high as $163.96, after it unveiled its 10th anniversary edition of the iPhone. Apple's release date of Nov. 3 was later than some investors had expected.

While some investors cited worries about whether Apple would face supply shortages, others said traders were just taking profits.

"There were no blockbuster surprises although what they're doing with the products is all pretty good," said Mr. Ghriskey.

The iPhone maker was the second-biggest drag on the S&P behind McDonald's, which fell more than 3 per cent on concerns about its third-quarter results.

Most of the 11 major S&P sectors were higher, with the telecom services index clocking the biggest gain with a 1.4-per-cent rise.

Financials, the biggest driver on the day, rose 1.2 per cent, helped by a 1.8-per-cent jump in the S&P Bank subsector. Investors in banks, whose profits are boosted by higher rates, were reacting to a jump U.S. Treasury 10-year yields to a three-week high after a 10-year note auction.

Also, Goldman Sachs unveiled a growth plan that could add as much as $5 billion in revenue annually.

The S&P Utilities and Real Estate sectors were the laggards of the day, with 1.8-per-cent and 1.2-per-cent declines, as investors shied away from interest rate- sensitive stocks.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russia and Venezuela confirmed their commitment to a production-cutting deal in an effort to reduce the global crude glut.

In its monthly report, the Organization of the Petroleum Exporting Countries also said the two hurricanes that hit the United States in recent weeks would have a "negligible" impact on demand.

About 6.1 million customers are without power following Hurricane Irma, down from a peak over 7.4 million late Monday, according to local utilities.

The market was assessing Hurricane Irma's effect on demand, even as refinery restarts in the wake of Hurricane Harvey boosted expectations for crude oil consumption.

The largest refinery in the U.S. in Port Arthur Texas is now running at reduced rates, sources told Reuters on Tuesday.

Weekly U.S. inventories data will shed light on the impact of the hurricanes. Analysts forecast crude inventories last week rose while products drew down. The American Petroleum Institute (API) will report its data on Tuesday and the U.S. Department of Energy's Energy Information Administration (EIA) reports Wednesday.

This week's numbers might be incomplete indicators of the longer-term supply and demand outlook, said Mark Watkins, regional investment manager at U.S. Bank.

"Over the next two to three weeks, the EIA inventory numbers will be rather sloppy because you have production disrupted, refineries going offline and online," he said. He added that OPEC figures are a better signal. "That's why you have to look out further."

Brent crude settled up 43 cents or 0.8 percent to $54.27 per barrel. During the session it traded as low as $53.42.

U.S. West Texas Intermediate (WTI) was up 16 cents or 0.3 per cent to $48.23 a barrel. It hit a session low of $47.73.

Output by OPEC's 14 member countries fell in August by 79,000 barrels per day (bpd) from July to 32.76 million bpd.

Should OPEC keep pumping at August's rate, the market would see a small supply deficit next year, versus a 450,000-bpd surplus implied by last month's report.

OPEC said inventories were falling and an increased premium of Brent crude for immediate delivery over that for later supplies raised hopes the market was rebalancing.

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