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* TSX up 2.15 percent at 10,285.90
* Highest close since early October
* BMO results top estimates; financials up 4.6 pct
* U.S. consumer confidence boosts sentiment (Adds details, quote)
By Jennifer Kwan
TORONTO, May 26 (Reuters) - Toronto's main stock index rose sharply on Tuesday, gaining for the third straight session, as the financials sector surged on Bank of Montreal's (BMO.TO) earnings and rosy U.S. economic data.
The rally by financial issues and data showing U.S. consumer confidence soared in May to its highest level in eight months, overcame early weakness in resources that had pushed the TSX lower at the open.
"U.S. confidence numbers came out really, really strong. This kind of validated what people were feeling, which was 'Hey, maybe things aren't so bad now'," said Rick Meslin, head of Canadian equities at UBS.
The buoyant mood, coupled with earnings from Bank of Montreal that topped expectations [ID:nN26473895] helped send the financials sector up 4.6 percent.
BMO rose 5.2 percent to C$43.71, while other financial issues climbed on expectations they too would notch healthy profits.
The S&P/TSX composite index .GSPTSE finished up 216.40 points, or 2.15 percent, at 10,285.90, its highest close since early October. Eight of the TSX's 10 main groups were higher.
"Across the board, you're seeing that fear to some extent is being replaced by confidence," said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
"We're looking for it on the part of the institutional level, on the part of corporate America and at the consumer level. And the consumer confidence numbers are indicating a better feel."
The consumer confidence figures helped boost the energy group, up 1.9 percent, as the price of oil CLC1 settled higher at $62.45 a barrel. [ID:nSYD496746].
The materials sector slipped 0.05 percent, with Barrick Gold (ABX.TO) down 3.7 percent at C$41.19. Utilities fell 0.6 percent.
$1=$1.12 Canadian Reporting by Jennifer Kwan