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TORONTO (Reuters) - Canada's main stock index rose for a third straight session on Thursday to its highest in more than three months in reaction to data showing economic growth in the region and to Blackberry (BB.TO) advancing amid speculation for a potential sale.
Most major sectors on the Toronto market traded in positive territory, with financials having the biggest positive impact, helping the benchmark outperform the S&P 500 .SPX.
After trailing its U.S. counterpart for most of the year, the Canadian benchmark has gained more than 5 percent in the quarter to date, surpassing the S&P 500's nearly 3 percent rise.
"It speaks to the fact that buying is coming back into this market," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. "There seems to be growing optimism that the Canadian economy has come out of a lean patch and might close the year on a stronger-than-expected note."
BlackBerry shares climbed 2.8 percent after a Wednesday report from the Wall Street Journal said the smartphone maker's board hopes to run a "fast" auction process that could result in a sale of the company by November.
The market also processed news that U.S. President Barack Obama was facing pressure from world leaders not to launch military strikes on Syria, as well as moves by some central banks to hold interest rates steady.
Data showed U.S. private employers added jobs in August, and new claims for U.S. jobless benefits fell last week. A separate report said the U.S. services sector grew in August at its fastest pace in almost eight years.
Investors contemplated the Federal Reserve's next monetary policy move as they looked to Friday's U.S. nonfarm payroll report, seen as a major indicator of the economy's health.
"Expectations that the Fed will begin tapering have been building up," Picardo said. "Markets do believe that tapering is inevitable, but what they don't want to see is unusually strong numbers that would force the Fed's hand."
Investors and market experts seem divided about when the Fed could begin the stimulus wind-down.
"Expectations of immediate tapering in the (Fed's) September meeting might be a little aggressive," said Colin Cieszynski, senior market analyst at CMC Markets Canada.
"My suspicion is that you will see them talk about tapering in September, but I don't think they'll actually do anything," he added.
It could more likely happen in October, he said.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 87.25 points, or 0.68 percent, at 12,845.06, after rising as much as 12,851.74, its highest level since May 22.
Eight of the 10 main sectors on the index were higher.
Financials, the index's most heavily weighted sector, rose 1.4 percent. Royal Bank of Canada (RY.TO) added 1.7 percent to C$66.56 and had the biggest positive influence on the market; Toronto Dominion Bank (TD.TO) was up 1.5 percent, at C$91.65.
Shares of energy companies reflected a jump in the price of U.S. crude oil, which was up 1.3 percent.
But the materials sector, which includes mining stocks, gave back 1.6 percent on weakness in gold producers. Gold mining shares tumbled 3.2 percent as the bullion price weakened. <GOL/>
BlackBerry's 2.8 percent rise put it at C$11.60. As a result, the information technology group climbed 1.6 percent and showed the sharpest gain of all major sectors.
Editing by James Dalgleish and Bob Burgdorfer