Toronto stocks closed lower Thursday thanks to an 8% drop in the oil and gas sub-index.

The TSE 300 finished down 86.55 points at 7,262.90.

Nine of the TSE’s 14 sub-indices lost ground, with the oil and gas sub-index losing 7.83%. The sector was hammered by falling oil prices, which hit a two-year low.

Market momentum was negative with declines stepping on advances 640 to 434. Market volume was 156 million shares.

Some of the losses in the energy sector were huge. Talisman Energy dropped $6.41 to $52.14; Precision Drilling fell $5.08 to $33.23; Alberta Energy lost $4.30 to $55.30, and Canadian Natural Resources dropped $4.49 to $37.17.

Transportation stocks led the advancing sectors, rising 2.33% on the prospect of cheaper fuel.

Airlines and railroads advanced; Transat AT, parent of Air Transat, surged 21% to $8.19 as investors also bet it would benefit from the demise of Canada 3000. Air Canada rose 13 cents to $4.20; WestJet rose 48 cents to $19.98.

CP Rail climbed 93 cents to $29.53; CN Rail rose $1.50 to $70.

Among financial stocks, TD Bank fell 42¢ to $38.60. The bank reported lower fourth quarter earnings, but beat analysts’ expectations.

724 Solutions surged more than 50%, rising $1.40 to $4.10. The company announced a deal Wednesday to supply a South Korean company with its wireless technology.

Canada’s venture capital stocks posted gains on Thursday. The CDNX Index closed up 3.03 at 3,026.17. Trading was heavy on a volume of 38.2 million shares, with 190 advances and 203 declines.

Gold stocks shed 3.12%.

In New York, the Dow Jones industrial average gained 48.78 points to 9,872.39. The Nasdaq composite index slipped 2.62 points to 1,900.57. The S&P 500 gained 1.03 points to 1,142.24.