Toronto stocks closed lower Tuesday, as investors absorbed the decision by the Bank of Canada to raise key lending rates.

In a widely expected move, the central bank lifted its overnight rate by a quarter point to 4.5% and hinted that further rate hikes could be necessary.

The S&P/TSX composite index lost 45.59 points, or 0.32%, to 14,131.93.

Nine of the 10 TSX main sub-groups were down, with only the energy sector remaining in the black. The group edged ahead 0.06% as light, sweet crude for August delivery moved up 62¢ to close at US$72.81 a barrel.

Penn West Energy Services gained 2¢, or 0.06%, to $35.71.

The materials index gave up 0.48%, the gold sub-index fell 0.16%.

Gold futures rose $1.90 to close at US$664.40 an ounce.

Lundin Mining Corp. finished down 23¢, or 1.59%, to $14.20.

Information technology gave up 0.56%

Nortel Networks fell 13¢, or 0.53%, to $24.45.

The S&P/TSX Venture composite index fell 23.59, or 0.72%, to 3,248.29.

The Canadian dollar fell 0.17 of a cent to US95.10¢.

In New York, markets sank on disappointing corporate earnings reports, higher oil prices, and concerns that sub-prime mortgage woes will spread.

The Dow Jones industrial average fell 148.27 points, or 1.09%, to 13,501.70, the Nasdaq composite index lost 30.86, or 1.16%, to 2,639.16, the S&P 500 gave up 21.73, or 1.42%, to 1,510.12.