TORONTO - The Toronto stock market closed higher for a third consecutive session Monday as rising financial and energy stocks made up for losses in the mining sector amid rising trade tensions between China and the United States.

Toronto's S&P/TSX composite index closed up 78.81 points to 11,332.04, adding to last week's rise of just over two per cent.

Concerns about a growing trade dispute rose after the U.S. government imposed trade penalties late Friday on tires coming from China. The Chinese government responded with a complaint to the World Trade Organization. Investors had worried it would erupt into a tariff war that could damage an economic recovery.

CMC Canada market analyst Colin Cieszynski said there is a fear that the dispute between the United States and China could spiral into something bigger.

"There's enough people already wondering if the markets have gotten ahead of themselves in terms of pricing in a global recovery. And you have enough people already looking to take profits."

The financial sector gained 1.3 per cent with Scotiabank (TSX:BNS) ahead $1.07 to $46.70 while Manulife Financial rose 37 cents to $21.86.

The TSX energy sector was up almost one per cent even as a stronger U.S. dollar pulled down commodity prices and made a dent in the Canadian dollar. The loonie moved down 0.42 of a cent to 92.29 cents US.

The October crude contract on the New York Mercantile Exchange lost 43 cents to US$68.86 a barrel. On the TSX, Suncor Inc. (TSX:SU) advanced 63 cents to C$37.35.

The TSX Venture Exchange moved 8.06 points lower to 1,253.83.

In New York, stocks recovered from steep losses at the open. The Dow Jones industrial average rallied to close up 21.39 points to 9,626.8, the Nasdaq composite index climbed 10.88 points to 2,091.78 while the S&P 500 index added 6.61 points to 1,049.34.

Traders reacted coolly to a speech from U.S. president Barack Obama, who warned the financial industry against the type of recklessness that led to the collapse of the brokerage Lehman Brothers Holdings Inc. one year ago. That event sent global stock markets tumbling last fall and winter and led to a freeze in the credit markets that power the world's economies.

TSX tech stocks also moved higher as Research In Motion Ltd. (TSX:RIM) climbed $2.58 to $88.28.

On the negative side, the TSX base metals sector was down 0.78 per cent as December copper moved down 4.2 cents to US$2.8045 a pound. First Quantum Minerals (TSX:FM) lost $3.40 to $72.10 but Teck Resources (TSX:TCK.B) gained 39 cents to $28.75.

Shares in Inmet Mining Corp. (TSX:IMN) lost $1.54 to $57.14 after it announced the termination of strategic discussions that would have seen an unnamed party take a minority stake in the company. The Toronto-based metals miner said it was in discussions with Korea Resources Corp. and another party concerning a potential transaction that would have seen the unnamed company take a minority stake with financial support from Korea Resources.

The gold sector was off almost one per cent as the December bullion contract on the New York Mercantile Exchange lost $5.30 to US$1,001.10 an ounce.

Shares in Rubicon Minerals Corp. (TSX:RMX) ran ahead 27 cents or 6.75 per cent to C$4.27 after it released an update on drilling operations at its 100 per cent-owned Phoenix Gold project in the Red Lake Gold District of Ontario. It called recent activity to open up a new target area "one of our best holes drilled to date."

Eldorado Gold Corp. (TSX:ELD) shares declined 40 cents to $12.45 as it said Monday the due diligence conditions in a $2-billion deal to buy the rest of Australia's Sino Gold Mining Ltd. have been satisfied. The deal is expected to close in early December and will allow Vancouver-based Eldorado to expand its presence in China, and will result in a gold producer with a combined stock market value of $6.4 billion.

In economic news, Statistics Canada said the rate of capacity utilization in Canadian industries continued to shrink in the second quarter. Industrial capacity came in at 67.4 per cent for the period, down 2.8 percentage points from the first quarter and a much better showing than the 65.5 per cent reading that economists had expected.

Statistics Canada noted that the second-quarter figure is still the lowest level since it started gathering this information in 1987.

In other corporate news, shares in auto parts company Magna International (TSX:MG.A) were 75 cents higher to $47.23 after co-CEO Siegfried Wolf said that as many as 10,500 Opel jobs in Europe could be cut, nearly half of them in Germany. Magna and its Russian partner Sberbank have succeeded in buying a 55 per cent stake in Opel, the main European unit of General Motors.

Drugmaker Patheon (TSX:PTI) reported Monday a "disappointing" third-quarter as revenues plunged 15.7 per cent due to due to setbacks at its Puerto Rico operations, a slowdown in its pharmaceutical development services and a drop in the U.S. dollar, among other factors. Its shares dipped 11 cents to $2.88.

The Toronto-based company, which had been at the centre of a takeover battle, said its net loss for the quarter ended July 31 was $6 million, 10.6 cents per share, compared with a loss of $14 million, 15.4 cents per share, in the year-earlier period.