Toronto stocks closed lower Monday, after spending most of the session in positive territory, as losses in the financial sector, still beset by investor worries over the tightening credit environment, pulled down the broader market.

The S&P/TSX composite index fell 38.83, or 0.29%, to 13,427.45, after hitting a high of 13,652.64 earlier in the trading day.

Six of the 10 TSX main sub-groups finished higher.

Financials lost 1.32%.

Manulife Financial Corp. fell 51¢, or 1.28%, to $39.48.

CIBC moved up $1.15, or 1.31%, to $88.66 as the bank issued an improved third-quarter earnings forecast, despite advising of a $290 million writedown resulting from exposure to embattled U.S. sub-prime mortgage market.

The energy index moved down 0.17%.

Light, sweet crude for September delivery gained 15¢ at US$71.62 a barrel on the New York Mercantile Exchange.

Imperial Oil Ltd. fell $1.27, or 2.82%, to $43.73.

The materials sector fell 0.08%, but the gold sub-sector gained 1.79%.

Gold for December delivery gave up 70¢ to close at US$680.90 an ounce.

Kinross Gold Corp. fell 49¢, or 3.55%, to $13.31.

The S&P TSX Venture Exchange gained 2.00, or 0.07%, to 2,885.83.

The Canadian dollar gained 0.03 of a cent to US94.95¢.

In New York, markets ended moderately lower after investor optimism earlier in the day gave way to pessimism over the consequences of the U.S. subprime mortgage fallout.

The Dow Jones industrial average drifted down 3.01 points, or 0.02%, to 13,236.53, the Nasdaq composite index ticked lower 2.65, or 0.10%, to 2,542.24, while the S&P 500 edged down 0.72, or 0.05%, to 1,452.92.