Toronto stocks tried to rally late Friday afternoon, but came up short.

The TSE 300 finished down 5.17 points at 6,894.24.

Although nine of the TSE’s 14 sub-indices closed higher, slight declines — less than 1% — among oil and gas, financial services and industrial stocks led the composite index to finish in the red.

Gold and transportation stocks once provided the only real strength today. The gold sub-index climbed 2.4%, with transport rose 1.5%.

Volume was light ahead of the Thanksgiving holiday, with just over 83.5 million shares changing hands. Market breadth was mildly positive as advances outpaced declines 517 to 500.

On the TSE most active list it was a different story. The eight most actively traded issues closed lower.

Earnings warnings from U.S. tech giants Sun Microsystems and Gateway Inc weighed down Toronto tech stocks.

Celestica Inc slipped 4.1% to $49.40, while former tech heavyweight Nortel Networks, the day’s top trader, slid 11¢ to $8.60.

Among financial services stocks, the big banks all closed lower, as did Manulife Financial. Sun Life bucked the down trend adding 50¢ to $32.50.

Canadian Hunter, which saw its shares jump 16% yesterday on takeover speculation, sold off a bit today. The stock slipped 6% to $39.01.

CP Ships sailed to an 8.5% gain closing at $12.10. Among the gold stocks, Rio Alto advanced 3.8% to $20.50.

Air Canada helped lift transportation stocks as the troubled airline rose 6% to $2.61.

The day’s biggest percentage gains were found among the small caps. DC Diagnostics soared 41% to 55¢ on news that Canadian Medical Laboratories is willing to pay 60¢ a share to acquire the company. Infrastructure provider Bracknell Corp. powered ahead 29% to 53¢.

Trading was active the Canadian Venture Exchange. Over 28 million shares changed hands, with 207 advances, 142 declines and 463 issues closing unchanged. The CDNX Index closed up 10.77 at 2,857.56

In New York, stocks staged a late rally in Friday’s session as investors put aside negative sentiment stemming from tech sector earnings warnings, as well as worries following a weak U.S. employment report.

The turnaround coincided with U.S. President George Bush saying that his planned US$60 economic stimulus package should come in the form of tax cuts rather than new spending initiatives.

The Dow Jones industrial average gained 58.89 points to 9,119.77. The Nasdaq composite index added 7.99 points, to 1,605.30, while the Standard & Poor’s 500 edged up 1.76 to 1,071.38.