Source: The Canadian Press

The Toronto stock market closed lower Thursday as energy and gold stocks fell alongside prices for bullion and oil.

The S&P/TSX composite index slipped 14.76 points to 13,434.41 as the market found support from mining stocks after strong Chinese economic data helped push copper prices deeper into record territory.

The TSX Venture Exchange was 18.12 points higher at 2,261.69 in thin, year-end trading.

“The whole thing is being driven largely by very low volumes I think,” observed Gavin Graham, global strategist, Excel Funds Management.

Graham said it was not surprising that few transactions occur at this time of year given that “you do a deal this week, it’s not going to settle until next year and therefore you don’t get it for this year’s tax purposes.”

The Canadian dollar closed at parity with the American currency, up 0.06 of a cent at 100 cents US.

The energy sector declined as oil prices fell after a report showed a much smaller drop in U.S. inventories than analysts had expected, suggesting that a recovery in demand may have slowed.

The February crude contract on the New York Mercantile Exchange fell $1.28 to US$89.84 after the U.S. Energy Department reported a drop of 1.3 million barrels in U.S. crude supplies in the latest week. Analysts surveyed by Platts expected the data to show a drop of approximately 3.2 million barrels.

Imperial Oil (TSX:IMO) moved down 20 cents to C$40.67 while Cenovus Energy (TSX:CVE) fell 28 cents to $32.95.

Gold stocks led decliners with the February bullion contract in New York off $7.60 at US$1,405.90 an ounce. Goldcorp Inc. (TSX:G) declined 29 cents to C$45.34 and Barrick Gold Corp. (TSX:ABX) lost 52 cents to $52.61.

The TSX base metals sector was the biggest gainer as the March copper contract rose five cents to a record close of US$4.37 a pound in the wake of data showing China’s manufacturing boom, while losing some momentum in December, continued to expand strongly.

“People are saying, we’re going to see higher growth out of China, that in turn is going to lead to further demand for industrial materials, particularly copper, but also things like nickel, aluminum and lead,” Graham said.

The HSBC China Manufacturing Purchasing Managers Index dipped to a three-month low of 54.4 in December from November’s 55.3 on a 100-point scale where numbers above 50 show expansion.

Production continued to expand at a steep pace in December and didn’t slow enough to allow factories to reduce order backlogs, HSBC said.

Strong demand from emerging economies such as China’s has pushed copper prices up more than 30% in 2010.

Teck Resources (TSX:TCK.B) gained $1.05 to C$60.96 while Western Coal Corp. (TSX:WTN) advanced 19 cents to $12.40.

U.S. markets were also lacklustre amid data showing the number of people applying for unemployment benefits fell sharply last week, a positive sign that the job market south of the border is slowly improving. There was also a stronger than expected reading on the Midwest manufacturing sector.

The Dow Jones industrial average lost 15.67 points to 11,569.71.

The Nasdaq composite index dipped 3.95 points to 2,662.98 while the S&P 500 index was down 1.9 points at 1,257.88.

The U.S. Labour Department said applications for jobless insurance dropped by 34,000 to 388,000 last week, the lowest number since the week of July 12, 2008.

The Chicago Purchasing Managers Index climbed to 68.6 in December, up substantially from November’s reading of 62.5 and higher than the reading of 61 that economists had expected.

Also, the U.S. National Association of Realtors said its index of sales agreements for previously occupied homes increased 3.5% last month from a downwardly revised reading in October.

Contract signings are 22.1% above June’s index reading, which was the lowest level since the private group began tracking the data in 2001. Still, signings are 5% lower than November 2009 when buyers were scrambling to close purchases to qualify for the first U.S. federal tax credit.

Meanwhile, Research In Motion Ltd. (TSX:RIM) is disputing a report in The Economic Times of India that it has offered to install a “network data analysis” system at its location in India to resolve a dispute with the government. India views encrypted communications over RIM’s BlackBerry system as a potential security threat. RIM shares dipped a penny to $58.14.