TORONTO - The Toronto stock market closed lower Tuesday following a disappointing revision to recent U.S. economic growth figures and a tepid reading on consumer sentiment just before the start of the holiday shopping season.

Toronto's S&P/TSX composite index dropped 84.39 points to 11,539.63 after the U.S. Commerce Department reported the economy grew at an annual rate of 2.8 per cent in the third quarter, compared with a previous government estimate of 3.5 per cent.

The new reading was weaker than the 2.9 per cent revised growth rate economists had expected.

"It's the U.S. government doing everything and the consumer doing nothing," observed John Stephenson, portfolio manager at First Asset Funds.

"If you look at the growth in the last quarter, (government stimulus) had a lot to do with it. We don't have a solution to replace that except more stimulus so there's really no exit strategy other than the government continues to print money."

The Canadian dollar was down 0.19 of a cent to 94.52 cents US.

The financial sector was down 0.65 per cent despite a strong earnings report from Bank of Montreal (TSX:BMO), which reported its fourth-quarter net income rose 16 per cent from year-ago levels to $647 million. Earnings per share were $1.11, easily beating analyst estimates of 98 cents.

BMO's also said its provision for credit losses decreased to $386 million in the quarter, down $79 million from last year. Still, its shares gave back 41 cents to $53.14.

"Well, I would say BMO has just done a stellar job. It was a great quarter, there is no way to say anything negative about it," said Stephenson, adding the results bode well for earnings reports from the rest of the sector.

A warning from China's central bank that the country's commercial banks should control their lending also weighed on the market, financial stocks in particular. The comments raised concerns that the government could take more measures to reduce liquidity in the system in the coming months.

The TSX energy sector was off 0.22 per cent as lacklustre U.S. economic data helped send the January crude contract on the New York Mercantile Exchange down $1.54 to US$76.02 a barrel. Canadian Natural Resources (TSX:CNQ) climbed 96 cents to $71.95.

Mining stocks were also negative.

The gold sector was down 0.8 per cent even as the December bullion contract on the Nymex gained $1.10 to a record high close of US$1,165.80 an ounce. Goldcorp Inc. (TSX:G) faded $1.01 to $45.84.

The base metals sector stepped back 1.49 per cent with December copper off 2.2 cents to US$3.11 a pound. Teck Resources (TSX:TCK.B) moved back $1.07 to C$36.29.

The industrials sector was the weakest component, down 1.64 per cent with transportation giant Bombardier Inc. (TSX:BBD.B) down 17 cents to $4.79.

The TSX Venture Exchange moved 4.22 points lower to 1,412.41.

New York markets were also negative in the wake of the economic data with the Dow Jones industrials down 17.24 points to 10,433.71.

The Nasdaq composite index was off 6.83 points to 2,169.18, while the S&P 500 index declined 0.59 of a point to 1,105.65 after the U.S. Conference Board said that its Consumer Confidence Index edged up to 49.5 from a revised reading of 48.7 in October. Economists surveyed by Thomson Reuters had expected a reading of 47.7.

One component of the Conference Board's confidence gauge that measures consumers' assessment of the current economy fell slightly to 21.0, compared with 21.1 in October.

Consumer spending accounts for more than two-thirds of all U.S. economic activity and a rebound in shopping is considered vital for a strong recovery.

New York losses moderated after the U.S. Federal Reserve released minutes from its latest rate-setting meeting during which it pledged to keep rates low for the foreseeable future and said inflation remained at bay. The Fed raised its expectations for economic growth during the second half of this year, but said unemployment would remain high.

In other corporate news, Manulife Financial Corp. (TSX:MFC) is expanding its Chinese operations with a deal to buy Fortis Bank's 49 per cent interest in China-based ABN AMRO TEDA Fund Management Co. for 105 million euros, or US$156 million. Its shares declined 28 cents to $18.50.

Kingsway Financial Services Inc. (TSX:KFS) shares fell five cents or 2.96 per cent to $1.64 after it said credit ratings agency A.M. Best had downgraded its issuer credit rating to Triple-C from Single-B. The financial strength ratings of several other insurers in which Kingsway has a major interest were also downgraded.

Shares in Alimentation Couche-Tard Inc. (TSX: ATD.B), which operates convenience stores throughout Canada and the United States, gained 87 cents to $20.97 after it said says its latest quarterly profit was down nearly 10 per cent from a year earlier. But revenue was up 5.3 per cent.

And a B.C. judge has decided Rogers Communications Inc. (TSX:RCI.B) cannot continue to claim it has "Canada's Most Reliable" wireless network without qualification. Telus Corp. (TSX:T) had argued that new networks put in place this month by it and Bell Canada had made it impossible for Rogers to claim superiority.

Rogers shares dipped seven cents to $32.03 while Telus shares were down 19 cents to $34.61.