Source: The Canadian Press

The Toronto stock market closed slightly lower Thursday, with mining stocks and copper prices backing off as investors took in the latest reading on the Canadian economy, which missed expectations.

The S&P/TSX composite index closed 9.5 points lower at 13,371.2 while the TSX Venture Exchange rose 8.02 points to 2,175.36.

The Canadian dollar was higher against the U.S. currency, up 0.52 of a cent at 99.12 cents US as Statistics Canada said that gross domestic product increased 0.2% in October following a 0.1% decline in September. The agency said mining and oil and gas extraction were the main source of growth.

But the showing was less than the 0.3% rise that economists had expected as manufacturing decreased 0.6%.

“October’s result, combined with the weak hand-off to Q4 from September, suggest that growth in the final quarter of the year will be held to a maximum rate of two to 2.5% on an annualized basis,” said TD Economics economist Francis Fong.

Manufacturers of non-durable goods cut back production by 2.3% while those of durable goods increased their output by 0.8% as production of motor vehicles and associated parts increased.

Gold stocks ran ahead even as bullion moved lower with the February contract on the New York Mercantile Exchange down $6.90 to US$1,380.50 an ounce. Goldcorp Inc. (TSX:G) shed 20 cents to C$45.19.

The energy sector was slightly higher as the February crude contract on the Nymex gained $1.03 to US$91.51 a barrel, a day after crude closed above US$90 a barrel for the first time since October 2008. Talisman Energy (TSX:TLM) lost 14 cents to C$22.

Metal prices were soft with the March copper contract on the New York Mercantile Exchange down two cents at US$4.26 a pound after hitting a record closing high earlier in the week. The base metals sector was off 0.5% with Equinox Minerals (TSX:EQN) falling 10 cents to C$6 while First Quantum (TSX:FM) was down $2.65 at $108.99.

Financials were weak as Bank of Montreal (TSX:BMO) moved down 80 cents to $57.05 while Manulife Financial (TSX:MFC) lost 20 cents to $17.21.

The tepid showing across most sectors comes at the end of a rewarding year on the Toronto market, which is up about 13% for 2010, led by strong gains in mining stocks.

“In 2010, the trend is definitely up…people have made money,” said Pat McHugh, senior portfolio manager at Manulife Asset Management.

“We’re experiencing a nice Santa Claus rally right now, the market is basically saying that things are improving, no one is talking about a double dip recession or anything else anymore and thank goodness for that.”

U.S. markets were little changed as investors took in a mixed bag of economic data.

Orders for durable goods declined by a larger than expected 1.3% in November, led by transportation equipment orders. Economists had expected a dip of 0.5%. But the U.S. Commerce Department reported that excluding transportation, durable goods orders rose by 2.4%.

The U.S. government also reported that consumers increased spending 0.4% in November. The gain came after shoppers ratcheted up spending by 0.7% in October, the most since August 2009.

And slightly fewer people applied for unemployment benefits last week, the second drop in three weeks and a sign the job market is slowly healing. The U.S. Labour Department said the number of people seeking benefits edged down by 3,000 to a seasonally adjusted 420,000 in the week that ended Dec. 18.

New York’s Dow Jones industrial average gained 14 points to 11,573.49.

The Nasdaq composite index declined 5.88 points to 2,665.6 while the S&P 500 index lost 2.07 points to 1,256.77.

With Thursday’s economic data out of the way, traders will be preparing for the Christmas break. The TSX closes at 1 p.m. EST on Friday while markets in the U.S. and Germany are closed. British and French bourses are also open for half a day.

In corporate news, Danish container shipping and oil group A.P. Moller-Maersk A/S has acquired Brazilian oil group SK do Brasil Ltda. from SK Energy Co. Ltd. for US$2.4 billion in cash on a debt-free basis. Moller-Maersk says the acquisition gives its oil unit access to “immediate production and significant growth potential” offshore Brazil and will help replace its oil reserves in the long term.

Air Canada (TSX:AC.B) shares were down five cents at $3.58 after the Organization for Economic Co-operation and Development announced new rules governing export financing for the purchase of commercial aircraft.

A provision of the agreement allows some previously ordered aircraft to be covered by existing financing terms. The Globe and Mail reported Wednesday that Air Canada (TSX:AC.A) could face higher financing costs if the OECD plan goes into effect before the airline arranges financing for an order of new Boeing 787s.

Davis + Henderson Income Fund (TSX:DHF.UN) has bought repossession management company Asset Inc. for $76 million in cash. Asset provides insolvency and repossession management to creditors of movable property like cars and boats. Davis + Henderson units were off 12 cents at $20.12.