A late afternoon rally pushed U.S. stocks higher after the Federal Reserve suggested evidence of an economic recovery is building.

But Toronto stocks were held back by weakness in the financial sector. The TSE 300 composite index closed down 18.34 points at 7548.80.

Overall, eight of the TSE’s 14 sub-indices closed lower. The influential financial services sub-index slipped 0.89%. The metals group fell 1.07%.

Among financials, CIBC fell $1.69 to $53.81. Yesterday after the bell, CIBC disclosed its exposure to Global Crossing, which has filed for bankruptcy protection in the U.S., at $386 million.

Sun Life fell 50¢ to $31. Bank of Montreal slipped 19¢ to $35.81, while TD Bank shed 45¢ to $41.80. Royal Bank lost 15¢ to $49.55, and Scotiabank fell 25¢ to $48.

Nortel Networks was the most actively-traded issue on the TSE, rising 6¢ to $11.20.

Among other actively traded issues, Petro-Canada shares dropped $1.23 to $35.65, one day after it announced a $3.2 billion deal to buy oil and gas assets of German-based Veba.

Abitibi shares climbed 30¢ to $12.24.

Market momentum was negative, with 590 issues declining and 478 advancing on volume of 153.8 million shares.

The S&P/CDNX Composite Index closed down 1.94 at 1,113.49. Trading was heavy on a volume of 37.8 million shares, with 222 advances, 216 declines and 551 issues unchanged.

On Wall Street, stocks staged a mammoth rally late Wednesday afternoon, with the Dow Jones industrial average gaining more than 230 points from its session low.

The Dow finished higher by 144.62 points, or 1.5%, to 9,762.86. The Nasdaq composite index was up 20.45 points, or 1.1%, to 1,913.44, and the S&P 500 added 12.93 points, or 1.2%, to 1,113.57.