Toronto stocks closed flat after a surprise Bank of Canada rate cut Tuesday. The S&P/TSX composite index ended up just 0.10 points at 7,116.08.

The Bank of Canada cut its key lending rate by 25 basis points, putting the overnight rate at 3%.

The rate cut gave a lift to financial services stocks, which welcomed the lower borrowing costs, but the rate move sent the Canadian dollar spiraling lower, casting a pall over the stock market. Financial services gained 0.42%.

Industrials rose 1.16%.

The health care sector led the decliners, slipping 1.44%. Telecoms were down 0.95% and the information technology group was off 0.33%.

The gold group was down 2.14% as bullion prices fell in the wake of a broadly stronger U.S. dollar. The greenback rose after Federal Reserve chief Alan Greenspan adopted a bullish stance on the economy.

Among individual stocks, Royal Bank of Canada rose 80¢ to $59.30, and Bank of Nova Scotia gained 25¢ to $62.70.

The TSX Venture composite index slid 2.50 points to close at 1,117.19.

In New York, stocks ended modestly lower after Fed Chairman Alan Greenspan gave a cautiously optimistic view on the economy.

The Dow Jones industrial average shed 48.18 points to close at 9,128.97. The S&P 500 slipped 3.44 points to1,000.42. The tech-heavy Nasdaq composite index fell 1.54 points to 1,753.28.

Greenspan said in his semiannual report to Congress on the economy that he was ready to keep U.S. interest rates low for a long time to lift the sagging economy and prevent a dangerous drop in prices.

After the close, Intel posted a stronger-than-expected quarterly profit after the close.

The Canadian dollar slipped after the Bank of Canada cut interest rates. The loonie finished at US71.83¢, down from US72.74¢ at Monday’s close.