TORONTO — The Toronto stock market closed lower as commodity prices gained ground but most TSX sectors backed off amid another flare-up of worry over the European debt crisis. The S&P/TSX composite index fell 57.15 points to 13,595.12 with gold stocks the strongest group as investors sought a safe haven while the TSX Venture Exchange slipped 4.37 points to 2,027.07. The Canadian dollar weakened against the greenback, down 0.32 of a cent from Friday's close to 102.45 cents US. The TSX was closed Monday for the Victoria Day holiday and played catch up to losses that piled up on stock markets around the globe after Standard and Poor's lowered its outlook on Italy's A-plus sovereign-credit rating from stable to negative last Friday. But the main concern centres on whether Greece will restructure its debt, a scenario that ratings agency Moody's said would constitute a default, which could badly hit the other debt-laden euro countries. "It is a lingering problem, it's actually been incrementally getting worse . . . and there is probably a crossroads out there where this thing will break right or break left," said Garey Aitken, director of equity research at Bissett Investment Management. Commodity prices had also suffered Monday as investors flocked to the safe haven of U.S. Treasurys but were higher Tuesday, helped along as the greenback weakened somewhat and by word from Goldman Sachs Group Inc. that it is turning "more bullish" on raw materials. Goldman Sachs suggested buying oil, copper and zinc, reversing last month's call to sell commodities. The July crude contract on the New York Mercantile Exchange closed up $1.89 to US$99.59. The energy sector dropped 0.71 per cent with Talisman Energy (TSX:TLM) down 50 cents at C$19.82 and Canadian Natural Resources (TSX:CNQ) shed 21 cents to $40.67. Metal prices also advanced with the July copper contract on the Nymex ahead 2.15 cents to settle at US$4.013 a pound but the base metals sector was down almost two per cent. Teck Resources (TSX:TCK.B) declined $1.45 to C$47.24 and First Quantum (TSX:FM) was down $2.10 to $130.78. The financials sector also gave up ground, down almost one per cent ahead of the release of quarterly earnings reports from most of the big banks this week. "I don't think it's going to be an overly eventful quarter for the banks," added Aitken. "We might see one or two dividend increases, I don't think we're going to see a lot on that front, though. We're expecting decent numbers but I don't think it's going to be overly dramatic one way or another." Bank of Montreal (TSX:BMO), which reports Wednesday, gave back 67 cents to $61.50 while National Bank (TSX:NA) was down $1.23 to $80.21. The gold sector was the strongest group as nervous investors pushed the June gold contract in New York up for a third day, rising $7.90 to US$1,523.30 an ounce. Barrick Gold Corp. (TSX:ABX) advanced $1.25 C$45.63 and Goldcorp Inc. (TSX:G) was ahead 89 cents to $48.39. New York markets were with the Dow Jones industrial average down 25.05 points to 12,356.21. The Nasdaq composite index fell 12.74 points to 2,746.16 while the S&P 500 index lost 1.09 points to 1,316.28. On the economic front, the U.S. Commerce Department said new-home sales rose 7.3 per cent last month to a seasonally adjusted annual rate of 323,000 homes. It is the second straight monthly gain. However, a normal housing market would mean a pace of about 700,000 new-home sales a month. In corporate news, Valeant Pharmaceuticals International Inc. (TSX:VRX) will acquire Lithuania-based pharma company AB Sanitas for C$432.6 million in cash. Its shares were unchanged at $43.32. TMX Group (TSX:X) shares were down 18 cents to $43.88 after its board of directors rejected a $3.6-billion takeover proposal from a Canadian consortium of banks and pension plans. The operator of the Toronto stock exchange said Friday the Maple Group bid breeds too many uncertainties, including regulatory and debt risks. It added that the bid is not superior to its proposed merger with the London Stock Exchange Group. Kirkland Lake Gold Inc. (TSX:KGI) said Monday it has recorded its highest level of gold production for its final month and quarter of fiscal 2011 and also for the full year. The junior gold miner said its Ontario mine produced 10,175 ounces in April, the first time it has produced more than 10,000 ounces in a single month. Production for the quarter was 23,466 ounces and for all of 2011, 81,860 ounces. Its shares gained 15 cents to $14.25. Medtronic, the world's largest medical device maker, said Tuesday its profit dropped 19 per cent in the fourth-quarter and the device maker predicted lower-than-expected growth for the year ahead due to a continuing slump in sales of its implants. Its shares fell 38 cents to US$40.88 in New York. Copyright © 2011 The Canadian Press. All rights reserved.

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