A rally in technology shares couldn’t keep the Toronto market from ending slightly lower Thursday. The S&P/TSX composite Index slipped 2.11 points to close at 8,386.42.

Technology shares advanced 2.4%. Much of that was due to Nortel, which jumped 56¢ to $7.86 in heavy trading of more than 70 million shares.

It was the second day of gains for the stock, following news of a major deal with Verizon to provide voice-over IP technology. Nortel also reached a three-year deal with Boston-based Avici.

Exfo Electro-Optical Engineering jumped 93¢, or 17.3%, to $6.31 after the group reported stronger than expected first-quarter results on Wednesday

Research in Motion shares, however, fell $2.28 to $91.64 after it filed a prospectus to issue 9 million new shares.

The TSX energy index fell 1.3% even though U.S. crude oil inventories fell last week.

Suncor dropped $1.11 to $32.12; Petro-Canada fell $1.28 to $64.22.

Shares in auto parts giant Magna International gained $3.58 to $105.80. After the market’s close Wednesday, Magna issued its 2004 outlook that called for sales to rise by as much as 28%.

The TSX utilities index fell 0.9% as TransCanada Corp fell 74¢ to $27.12.

The heavily weighted financials index was down 0.4%. CIBC dropped 62¢ to $65.04; TD fell 56¢ to $43.34.

Sears Canada shares rose 42¢ to close at $16.80 after the retailer reported a rosy Christmas season and raised its outlook for 2004 operating profits.

Sears Canada said its sales in the five weeks ended Jan. 3 were 4.6% higher than the previous year’s.

The junior S&P/TSX Venture composite index gained 11.82 points to 1,786.86.

On Wall Street, stocks rallied after a surprise positive forecast from technology bellwether Nokia lifted investor optimism.

Investors also are gearing up for the December jobs report on Friday, for a better reading on the nation’s struggling labour market.

The Dow Jones industrial average climbed 63.41 points to close at 10,592.44.

The tech-heavy Nasdaq composite index gained 22.57 points to 2,100.25. The broader S&P 500 rose 5.59 points to 1,131.92.

The Canadian dollar rose more than half a cent to close at US78.09¢ as the U.S. greenback continued to fall on international currency markets.

In other economic news, tfinance minister Ralph Goodale said the federal budget will be delivered in late February or early March.

Goodale warned that money is tight. He said the economic effects of the recent mad cow scare will make themselves felt in the budget.

He added that the country is still on course for a surplus of $2.3 billion for the fiscal year that ends Mar. 31, 2004.

Goodale said the federal government is anticipating economic growth in Canada in 2003 will come in at 1.6%, lower than the 1.9% Ottawa had been forecasting.