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A Toronto Stock Exchange (TSX) logo is seen in Toronto in this file photo.© Mark Blinch / Reuters

Canadian stocks rose as oil climbed while U.S. stocks traded near a record high after mixed data in the world's largest economy bolstered speculation the U.S. Federal Reserve will be in no rush to raise interest rates.

In Toronto, the S&P/TSX composite index closed up 16.58 points, or 0.11 per cent, at 14,764.77, as the energy sector was the biggest gainer, up 0.6 per cent. Tech and consumer stocks rose as did financials after Bank of Montreal added 2.3 per cent following a solid earnings report that beat expectations. Other banks report results over the rest of the week.

EnCana gained 1.6 per cent, Imperial Oil was up 0.5 per cent. But TMX Group was off 5.4 per cent after three big pension funds announced they were selling a nearly 10 per cent stake in the stock exchange operator.

The Canadian dollar was up 0.16 to 77.42 cents (U.S.).

In the U.S., the dissonance of reports showing a surge in American new home sales and a slowdown in manufacturing brought into question the hawkish tone of recent comments from Fed officials, keeping the relative sense of calm across asset classes. The S&P 500 Index briefly topped its record closing high amid thin trading volume, while the greenback hovered near a three-month low. Treasury 10-year notes were stuck in the tightest monthly trading range since 2006. Oil climbed on speculation Iran may be more willing to co-operate with other producers seeking to freeze output.

Investors' sentiment has shifted back and forth in recent weeks amid bets on how aggressive the Fed will be in its approach to tightening as traders digested recent comments from officials, while awaiting a speech from Chair Janet Yellen on Friday. The mixed economic data reflect a dimming outlook for the central bank to diverge from increased monetary stimulus in Europe and Asia. There's only a 26 per cent chance of a hike in September, according to data compiled by Bloomberg based on fed fund futures.

"We're crawling toward another high, and it's all about being in this sweet spot where everything is working well, but not overheating," said Larry Peruzzi, managing director of international equities at Mischler Financial Group Inc. in Boston. "Now everybody's looking to Yellen's testimony on Friday."

The Bank of America Merrill Lynch GFSI Market Risk Index, a measure of future price swings implied by options trading on global equities, interest rates, currencies and commodities, is close to the lowest level of 2016. U.S. stock volatility hovered near a two-year low.

The S&P 500 rose 4.26 points, or 0.20 per cent, to 2,186.90 in New York. The Dow Jones industrial average added 17.88 points, or 0.10 per cent, to 18,547.30. The Nasdaq gained 15.48 points, or 0.3 per cent, to 5,260.08.

Equities showed signs of breaking out of a recent torpor, with Monsanto Co. leading a rally in raw materials as it's said to be closer to a merger with Bayer AG. Chipmakers extended their recent gains to boost the technology group, and Best Buy Co. surged 19 per cent after surprising earnings.

The benchmark gauge for American shares had barely moved in the prior four sessions as investors assessed stretched valuations and hawkish signals from policy makers, while the earnings season came close to an end.

"The earnings season is largely over and the only thing we can look at is Fed-speak which is antagonizing," Brian Frank, portfolio manager at Key Biscayne, Florida-based Frank Capital Partners LLC, said by phone. "We're in the most aggressive dip-buying market I've ever seen. I wouldn't even call the last two days a dip, but any little tiny decline seems to be an excuse to buy and talk about the Fed."

Oil climbed after Reuters reported that Iran is sending "positive signals" that it may support joint action to bolster the oil market, citing unidentified sources in OPEC and the oil industry. Iran hasn't decided whether to join any action, according to the sources. If OPEC and some other producers agree to cap output at informal talks next month, the resulting price boost may help other suppliers revive output, Goldman Sachs analysts wrote.

"This is just more jawboning," said Sarah Emerson, managing director of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts. "Iran, Iraq and Saudi Arabia are the OPEC members that everyone is listening to. The market will react to any news that comes from them."

West Texas Intermediate for October delivery settled at $48.10 (U.S.) a barrel on the New York Mercantile Exchange. Prices had dropped earlier Tuesday.

Gold futures for December delivery advanced 0.2 per cent to settle at $1,346.10 an ounce on the Comex in New York. The metal lost 1 per cent in the previous two sessions.

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