Toronto stocks dropped Thursday, while New York markets rallied, as oil prices declined and U.S. investors welcomed positive economic and business news.

The S&P/TSX composite index fell 78.69, or 0.77%, to end 10,124.89.

Volume on the senior exchange was 217 million shares.

Seven of the 10 TSX main sub-groups were down, including energy, which dropped 2.94%, and materials, which shed 1.19%

Light sweet crude for August delivery declined by $2.21 to settle at US$57.80 US a barrel on the New York Mercantile Exchange. The International Energy Agency lowered its forecast of global demand growth this year to 1.58 million barrels of day, down by 200,000 barrels.

Suncor Energy Inc. dropped $2.68, or 4.32%, to $59.36, while Canadian Natural shed 99¢, or 1.98%, to close $48.90.

The price of gold also finished lower, dropping $4.40, or 1%, to US$420.20.

The TSX gold sub-index fell 2.81%. Barrick Gold slipped 50¢, or 2%, to $24.03.

The junior S&P/TSX Venture composite index fell 5.34, or 0.31%, to 1,710.97.

The Canadian dollar closed down 0.33 of a cent to 82.49¢ US.

In its July Monetary Policy Report Update, the Bank of Canada continued to signal that rate increases were likely in the short term and said it expected the economy to grow by about 2.7% in 2005 and 3.3% in 2006.

On Wall Street, investors cheered good June retail sales numbers and a smaller-than- expected rise in inflation for the month.

The blue chip Dow Jones industrial average gained 71.50, or 0.68%, to 10,628.89.

The tech heavy Nasdaq advanced 8.71, or 0.41%, to 2,152.82, its highest close of the year.

The broad based S&P 500 index lifted 3.21, or 0.26%, to 1,226.50, its highest close in four years.

Apple Computer Inc. soared $2.40, or 6.3%, to US$40.75, on record second-quarter earnings, which were reported after market close yesterday.

Also in the tech sector, Advanced Micro Devices Inc. rose 63¢, or 3.27%, to US$19.88 as its reported profits beat expectations.