The Canadian Press

The Toronto stock market closed little changed Thursday as commodity stocks backed off late in the session in the face of a rising U.S. dollar amid uncertainty surrounding a plan to help Greece dig out of its debt crisis.

The S&P/TSX composite index slipped 4.86 points to 11,958.11, while the TSX Venture Exchange was off 0.86 of a point at 1,550.56.

Commodity stocks lost early momentum as the U.S. dollar strengthened against other currencies as sovereign debt issues again prompted traders to seek the relative safe haven status of the greenback. Commodity prices generally move in an opposite direction to the U.S. currency.

Germany and France were urging adoption of a joint eurozone and International Monetary Fund bailout program for Greece.

But eurozone’s two biggest countries say that any loan package for Greece or other financially troubled countries using the euro would only come as a last resort when the country cannot borrow enough from financial markets, according to a draft text seen by The Associated Press.

Further, the text does not promise cheap loans to Greece, which wants to borrow at rates lower than those demanded by bond investors wary of the country’s shaky finances.

The base metals component was down 1.2 per cent even as May copper closed three cents higher at US$3.38 a pound. Sherritt International (TSX:S) fell 24 cents to C$8.47 and Teck Resources (TSX:TCK.B) was off 56 cents at C$41.13.

The May crude contract on the New York Mercantile Exchange also gave up an early advance and closed down eight cents at US$80.53 a barrel. The energy sector moved 0.52 per cent lower with Canadian Oil Sands Trust (TSX:COS.UN) ahead 54 cents at C$28.74 and Suncor Energy (TSX:SU) falling 32 cents to C$30.88.

Gold stocks were a major decliner even as the April gold contract on the Nymex gained $4.10 to US$1,092.90 an ounce. Goldcorp Inc. (TSX:G) faded 73 cents to C$37.50 while Barrick Gold Corp. (TSX:ABX) lost 50 cents to C$37.65.

At the same time, good news from the retail sector made investors feel a bit better about economic prospects.

Lululemon Athletica Inc. (TSX:LLL) was a major gainer on the TSX after its profit more than doubled in the fourth quarter, rising to $28.5 million from $10.9 million in the same period a year earlier. The specialty clothing retailer’s quarterly revenue also improved, rising to $160.6 million from $103.9 million and its shares ran up $3.52 or 9.54 per cent to $40.43.

Stronger earnings and a higher forecast from retailer Best Buy and a better-than-expected outlook from wireless chip maker Qualcomm raised hopes that consumer spending will increase. Higher sales of flat-panel TVs, laptop computers and smart phones are welcome signs for investors because consumer spending is the biggest driver of the economy.

The Canadian dollar also lost early strong gains and drifted 0.05 of a cent higher to 97.58 cents US.

Blue chips supported the TSX with gainers led by a 1.35 per cent climb in industrials. Railway stocks were especially active with Canadian National Railways (TSX:CNR) gaining $1.12 to $61.29 in the wake of an upgrade to outperform from neutral by Credit Suisse. Canadian Pacific (TSX:CP) advanced $1.24 to $55.90.

The technology sector was ahead 0.83 per cent, with Celestica Inc. (TSX:CLS) up 10 cents at $11.15 and Open Text (TSX:OTC) rising $1.33 to $48.78.

Financials were also supportive with Scotiabank (TSX:BNS) ahead 50 cents at $51.82.

The latest developments in the sovereign debt crisis came a day after Portugal’s debt was downgraded by the Fitch ratings agency.

But even if a rescue package for Greece gets wrapped up, analysts don’t expect the sovereign debt problem to go away soon.

“There’s no doubt that sovereign debt, as a result of the stimulus and fiscal activity, will be in the forefront for quite a while,” said Chris King, portfolio manager at Morgan, Meighen and Associates, adding that there are equally big government debt problems a lot closer to home.

“We’ve identified a bigger problem — the debt problems in California,” King said. “The state is ungovernable and there’s no resolution on how they actually might make things work. And it’s tough for a state like California to really put their books back in order.”

California is currently dealing with a US$20-billion deficit and has the lowest credit rating of any U.S. state.

Gains in New York markets also melted away late in the day, with the Dow Jones industrial average up just 5.06 points at 10,841.21. The Nasdaq composite index dipped 1.35 points to 2,397.41 while the S&P 500 index moved down 1.99 points to 1,165.73. Investors had been encouraged earlier Thursday by positive data on jobs and interest rates.

@page_break@New claims for unemployment benefits fell more than expected in the U.S. last week as layoffs eased and hiring continued to slowly recover. The U.S. Labour Department said first-time claims dropped by 14,000 to a seasonally adjusted 442,000, which was below the average analyst’s estimate of 450,000.

Investors also got some reassurance about interest rates in the U.S. staying low. Federal Reserve chairman Ben Bernanke told Congress that record-low rates are still needed to rev up the economic recovery.

In other corporate news, Rogers Communications Inc. (TSX:RCI.B) is partnering with TBayTel to expand its wireless coverage in northwestern Ontario. The agreement enables Rogers to deliver voice and data services over TBayTel’s third-generation network from just west of Sault Ste. Marie, Ont., to the Manitoba border. Rogers shares rose 36 cents to $34.93.