Source: The Canadian Press

The Toronto stock market closed lower Thursday, dragged down by gold stocks despite major merger and acquisition activity in the mining and retail sectors.

The S&P/TSX composite index lost 58.73 points to 13,401.48 as investors pulled back after two strong sessions, while the TSX Venture Exchange moved down 14.46 points to 2,289.

The Canadian dollar fell 0.24 of a cent to 101.09 cents US amid falling commodity prices and data showing that Canada’s trade deficit shrank dramatically in November as the value of merchandise exports rose while imports dropped.

Statistics Canada reported that the trade deficit narrowed to $81 million from $1.5 billion in October.

Merchandise imports declined 3.2% in November, led by a 15.1% drop in volumes of energy products. Export volumes fell 2%, but the value of exports increased by 0.8% to $34.3 billion as prices rose in most sectors.

U.S. retailer Target Corp. (NYSE:TGT) said Thursday it will pay $1.83 billion to buy 220 leases from Zellers Inc., a unit of the Hudson’s Bay Company. Target said the transaction will allow it to open its first stores in Canada beginning in 2013 and its shares dipped three cents to US$55.42 in New York.

Base metals miners Inmet Mining Corp. (TSX:IMN) and Lundin Mining Corp. (TSX:LUN) have signed a merger deal to create a company valued at C$9 billion. The new company will be called Symterra Corp. and have five mines in Europe as well as two large copper development projects in Panama and in the Democratic Republic of Congo.

Under the terms of the deal, Inmet stockholders will receive 3.4918 shares of Symterra for each Inmet share, while Lundin shareholders will receive 0.3333 of a Symterra share for each Lundin share held. Inmet shares gained $4.63 to $79.39 while Lundin shares were off 15 cents at $7.75.

It was the second episode of major dealmaking in the mining sector this week.

On Tuesday, Consolidated Thompson Iron Mines Ltd. (TSX:CLM) said it was being taken over by U.S. miner Cliffs Natural Resources Inc. (NYSE:CLF) in an all-cash deal worth about $4.9 billion.

“One (reason for the deals) is economies of scale,” said Paul Taylor, chief investment officer at BMO Harris Private Banking.

“The other is that with commodity prices as strong as they are, there are opportunities for expansion, opportunities for acquisitions.”

The base metals sector was up 0.43% as the March copper contract in New York moved down two cents at US$4.39 a pound.

Quadra FNX Mining Ltd. (TSX:QUX) gained 22 cents to C$17.19 while Teck Resources (TSX:TCK.B) was $1.20 lower at $63.04.

The energy sector was ahead 0.27% as oil prices backed away after running ahead for the last two sessions after a leak resulted in a shutdown of the 1,300-kilometre trans-Alaskan pipeline on Saturday.

Alyeska Pipeline Co., which manages the line, said about 400,000 barrels a day began flowing Wednesday, about two-thirds of the 620,000 that was delivered before a leak shut the line down Saturday.

Prices had also run up to a two-year high Wednesday as a greater than expected drawdown in U.S. crude inventories signalled improving demand.

On Thursday, the February crude contract on the New York Mercantile Exchange dipped 46 cents to US$91.40 a barrel.

Canadian Natural Resources (TSX:CNQ) lost 66 cents to C$41.36, a day after the energy company declared force majeure on January crude shipments from its fire-damaged Horizon oilsands upgrader. The declaration frees the oil and gas producer from contractual obligations because of the fire which shut down production at the facility.

Imperial Oil (TSX:IMO) gained 52 cents to $41.74.

The tech sector was supportive with BlackBerry maker Research In Motion Ltd. (TSX:RIM) up 60 cents at $63.29 after it said it has given India the means to access its Messenger service. But RIM also said that no changes can be made to the security architecture for BlackBerry Enterprise Server customers since. India wants access to all BlackBerry services as part of efforts to fight security threats.

Gold stocks were weak as bullion closed little changed with the February contract on the Nymex up $1.20 at US$1,387 an ounce. Barrick Gold Corp. (TSX:ABX) faded $2.43 to C$46.88 while Goldcorp Inc. (TSX:G) eased $1.48 to $41.56.

Financials also weighed on markets late in the session after Moody Investor Services warned the United States, France, Germany and the United Kingdom that they need to better control the rising costs of pensions and health-care subsidies.

Moody’s says that all four countries still have balance sheets that are compatible with their triple-A ratings. But the agency added that the countries face “dramatic increases” arising from aging-related pension and health-care subsidies.

Scotiabank (TSX:BNS) declined 44 cents to $55.95 and Manulife Financial (TSX:MFC) shed 14 cents to $17.36.

New York markets were lower in the wake of data showing that more people are applying for unemployment benefits.

The Dow Jones industrial average fell 23.54 points to 11,731.9.

The Nasdaq composite index slipped 2.04 points to 2,735.29 while the S&P 500 index lost 2.2 points to 1,283.76.

In corporate news, Shaw Communications Inc. has (TSX:SJR.B) delayed the launch of its much anticipated wireless business by about three months.

The delay came as the Calgary-based company increased its dividend and reported a quarterly profit of $20.3 million. Results were weighed down by costs related to its purchase of the broadcasting assets of Canwest Global Communications but its shares climbed 39 cents to $20.59.

Shares in media company Astral Media Inc. (TSX:ACM.A) slipped 33 cents to $41.06 as it reported a first-quarter profit of $53.3 million as revenues rose 7%. The company’s net income was down from a year earlier, when Astral and other media companies benefited from a regulatory fee reversal and Ontario tax adjustments. However, the results were up if those one-time items were excluded.