Today’s decision from the U.S. Federal Reserve to keep its key interest rate unchanged left New York markets relatively flat while Toronto stocks closed lower.

As expected, the Fed kept benchmark rate steady at 5.25%.

In Toronto, the S&P/TSX composite index closed down 26.25 points to at 13,715.67.

The gold sector led losses, down 0.9%, though the August bullion contract gained $5.60 to US$650.40 an ounce on the Nymex.

Mining stocks were down 0.3% after Yamana Gold and Northern Orion Resources proposed to merge and take over Meridian Gold.

All three stocks were heavily traded, with Meridian up 11%, gaining $2.94 to $29.15. Northern Orion climbed 32 cents to $6.15, while Yamana lost 9%, or $1.19, to $11.83.

The energy sector fell 0.07% as light sweet crude for August delivery gained 60¢ to US$69.55 a barrel on the New York Mercantile Exchange.

Petro-Canada, Teck Cominco and UTS Energy have agreed on a design for the Fort Hills oilsands project, with the first phase budgeted at $14.1 billion. Petro-Canada shares rose 1¢ to $55.33, while UTS gained 8¢ to $6.02 and Teck lost $1.10 cents to $44.84.

The information technology sector was down 0.05%. Research In Motion reported after the closing bell that first-quarter revenues soared to US$1.08 billion, up 76.5% from the same period of 2006, as net income jumped to $223.2 million. The company also announced it plans to split its stock on a three-for-one basis. RIM shares closed up 38¢ to $175.22 ahead of the report.

Empire Co. is boosting its dividend by 10% on a solid sales performance from its Sobeys grocery business and earnings from its residential real estate operation Empire shares climbed 25¢ to $43.50.

Onex was ahead $1.94 to $37.60 after the Toronto-based conglomerate teamed with the Carlyle Group private-equity firm to buy the Allison transmission commercial and military business from General Motors Corp. for US$5.6 billion. The deal includes seven factories in Indianapolis and a global distribution network.

The S&P/TSX Venture composite index rose 4.17 points to 3,134.03.

The Canadian dollar jumped nearly a penny, up 0.95 of a cent, to US94.39¢, its highest level since June 6.

Statistics Canada reported that the strong Canadian dollar has helped send prices for manufactured products down 0.5% in May after six straight monthly increases. Economists had expected a 0.2% increase.

In New York, the Dow Jones industrials were down 5.45 at 13,422.28. The Nasdaq composite index climbed 3.02 to 2,608.37 and the S&P 500 index lost 0.63 to 1,505.71.