Sagging gold prices dragged down Toronto markets, while U.S. markets started the day strong but drifted into mixed territory Wednesday morning.

At midday, the S&P/TSX was down 33.1 points or 0.38% at 8752.76, while the TSX Venture exchange was off 25.47 points or 1.52% at 1650.40. In New York, the Dow Jones industrial average climbed as high as 10127 before slipping into the red; it was off 34.66 points or 0.34% to 10042.52. The Nasdag was ahead by 6.28 points or 0.33% to 1930.86 and the S&P 500 had lost four points or 0.36% at 1117.84.

The Canadian dollar was down 0.48 of a cent to US79.10¢.

Canadian markets were led lower by gold stocks, which felt the effect of another drop in gold prices. Gold futures logged a loss of almost US$7 an ounce Tuesday to close at their lowest level in a week, pressured by renewed strength in the U.S. dollar. Gold for December delivery fell $6.80 to close at US$416.60 an ounce on the New York Mercantile Exchange, its lowest ending level since Oct. 4.

Gold stocks were off 2.72% as a result, with Placer Dome and Barrick Gold among the bigger losers.

Oil stocks fell 1.99% as the price of oil continued to slide. Petro-Canada and Talisman Energy were both down more than 2%.

Financial shares, meanwhile, were up, by 0.86%. Bank of Montreal helped lead the way, gaining 1.44% after announcing it plans to buy privately held Mercantile Bancorp Inc., as well as the stock of Lake Commercial Corp. in deals worth $197.4 million.

In New York, aluminum giant Alcoa skid almost three percent amid negative comments on metals from Prudential, which downgraded Freeport-McMoRan Copper & Gold and Inco.

Also weighing on the metals group was a warning from BHP Billiton PLC that while global demand will continue to outpace copper supplies in the first half of next year, copper supply worldwide would exceed demand in the second half as more production comes on stream.

Energy stocks were seeing some profit taking, as crude prices came off record highs, sliding below $52 a barrel. Crude oil futures were last down 66¢ at US$51.85 a barrel in a further retreat from the $54.45 record high touched Tuesday ahead of the latest inventory reports due out Thursday.

Intel and McDonald’s, which had lead the Dow higher at the opening bell, held their gains, however.

Intel surged 4% as investors breathed a sigh of relief that the company did a better-than-expected job moving part of its excess inventory and that the weakness it sees in the fourth-quarter isn’t as bad as some feared.

Shares of fellow blue chip McDonald’s Corp., meanwhile, jumped 4% after it said it expects third-quarter earnings per share exceeded Wall Street’s forecast.

Analysts, meanwhile, said U.S. markets could be seeing a rotation out of groups that have outperformed like metals and energy and into technology.

Other stocks in focus included Internet portal Yahoo, which jmped 5.5% after posting better than expected third-quarter revenue and raised its outlook for the fourth quarter.

Overseas, Japan’s Nikkei stock average fell 0.1%. In afternoon trading, Britain’s FTSE 100 was up 0.4%, Germany’s DAX index jumped 1.4%, and France’s CAC-40 gained 0.7%.