The rally on Canadian markets failed to hold Tuesday as gold shares fell, while the Dow and S&P 500 managed to finish the day at new highs for the year.

At close, the S&P/TSX was down 15.19 points or 0.16% to 9570.03, while the TSX Venture Exchange gained 4.78 points or 0.25% to 1892.93. In New York, the Dow Jones industrial average added 46.19 points or 0.43% to 10837.32, while the Nasdaq gained 6.30 or 0.30% to 2089.21 and the S&P 500 index added 3.98 points or 0.33% to 1210.12.

Both the Dow and the S&P closed at new highs for 2005.

The Canadian dollar was up 0.19of a cent at US81.24¢ late in the day.

In Toronto, gold stocks pushed the markets lower, falling 1.63% as the price of bullion lost $1.10 to US$424.70 an ounce. Among the bigger movers were Glamis Gold Ltd., down 70¢ or 3.2% to $21.20; Place Dome Inc., down 45¢ or 2.02% to $21.82; and Barrick Gold Corp., down 22¢ or 0.95% to $22.96.

Technology shares, which had carried the TSX in the morning session, closed the day down 0.07%. Financials were off 0.24%.

Energy issues added 0.20% even though crude futures were down Tuesday as traders weighed the possibility of a production cut by OPEC next month and awaited the next weekly petroleum supply report from the U.S. government. Light, sweet crude on the New York Mercantile Exchange settled 18¢ lower at US$47.26 per barrel, after rallying as high as $47.80 earlier in the day. Brent crude futures on the International Petroleum Exchange closed 14¢ lower at US$45.39 per barrel.

Other big movers included O&Y Properties, up $2.10 or 21.21% to $12 after announcing it is putting First Canadian Place – the landmark office tower that is headquarters to the Bank of Montreal in downtown Toronto – up for sale, along with its real estate trust subsidiary. The deal would be worth more than $2 billion.

Inco Ltd. lost 11¢ or 0.31% to $35.64 after reporting its best profit since 1989 as nickel prices soared. Fourth-quarter earnings climbed to US$251 million, $1.19 per share, beating estimates and improving on profits of $123 million or 59¢ per share in the final three months of 2003. Quarterly sales were $1.16 billion, up from $832 million.

Rogers Communications Inc. added 2¢ or 0.06% to $34.52 despite posting a quarterly loss of $15.5 million, 12¢ per share, compared with a year-ago profit of $68.84 million, 23¢ a share.

On Wall Street, the possible takeover of ailing electronics retailer Circuit City Stores Inc. helped maintain momentum. Circuit City said an investment firm has made an unsolicited offer to buy the company for US$3.25 billion or $17 per share, and take it private. Highfields Capital Management’s offer represented a 20% premium to Circuit City’s share price Monday. Circuit City stocks closed up $2.30 or 16.16% to US$16.53.

Stocks also got a boost from better-than-expected January spending data. U.S. retail sales fell 0.3% in January, which was better than the 0.4 % decline anticipated by economists. But it was still the weakest showing in five months as a big drop in demand for cars offset strength at clothing and department stores. However, markets were pleased to see January sales excluding autos rise a better than expected 0.6%.

Wal-Mart Stores Inc. and other retail stocks rose following the news. Wal-Mart added 55¢ or 1.05% to US$52.70.

Tech shares were buoyed by Apple Computer Inc., whose shares gained $3.78 or 4.47% to US$88.41 on the Nasdaq.