Markets closed lower Monday as fears of an imminent rise in interest rates overwhelmed a string of positive earnings reports. In Toronto, the S&P/TSX composite index finished 29.66 points lower at 8,638.21.

Canadian steelmaker Ipsco Inc. reported a record first-quarter profit of US$32.7 million. The company also said 2004 should be a record year. Its shares added 22¢, climbing to $26.54.

Shares in Manulife Financial rose 62¢ to $53.90 after the insurer reported its quarterly profit is were up 28%.

After performing well in recent TSX sessions, the information technology sector finished mixed today. Zarlink Semiconductor climbed 15¢ to $5.70 and ATI Technologies 37¢ lighter at $22.90.

Some mining stocks also had a rough day. Inco dropped 71¢ lower to $43.85. Noranda lost 60¢ to $21.96, despite reporting higher metal prices and increased production, which resulted in a higher first quarter profit of US$153 million.

The gold sector stayed afloat, buoyed by a price rise of 80¢ to US$395.80 per ounce. Placer Dome rose 36¢ to $20.83 and Gabriel Resources added 8¢ to $2.89.

A major deal in the Canadian oil-patch helped keep the energy sector in positive territory. Progress Energy Ltd. and Cequel Energy Inc. say they plan to merge to create a $1 billion income trust and two exploration-focused companies. Cequel shares rose 56¢ higher to $10.87 and Progress shares rose 95¢ to $15.45.

The S&P/TSX Venture composite index slipped 2.79 points lower to 1,742.8.

South of the border, U.S. stocks ended lower after a quiet trading session. Analysts say that investors overlooked positive earnings reports to lock in gains after three straight positive days last week.

The Dow Jones industrial average lost 33.58 points to 10,439.26. The tech-heavy Nasdaq composite index slipped 16.72 points to 2,033.05, while the broader S&P 500 declined 5.84 points to 1,134.76.