TORONTO - The Toronto stock market posted a modest loss Tuesday as the materials sector pressured the main index.

Traders getting back to work following a four-day break pushed the S&P/TSX composite index down 52.8 points to 11,701.81.

The main index charged ahead about 2.5 per cent last week to within a handful of points of its highs for the year.

Even after Tuesday's showing, the TSX is still up about 30 per cent year to date.

"It's been a very good year," said Chris King, portfolio manager at Morgan, Meighen and Associates, who cautioned that that pace of gains won't keep up in 2010.

"I think 12, 18 months out we will look at a decent return on an average year but we certainly won't have any sort of the recovery that we had this year."

Investors also took in major dealmaking in the mining sector while U.S. data on home prices and consumer confidence came in largely as expected, showing a gradual improvement in the economy.

The Canadian dollar closed up 0.55 of a cent from Thursday's pre-holiday close to 95.8 cents US.

Energy stocks were down slightly as the February crude contract on the New York Mercantile Exchange rose a dime to US$78.87 a barrel.

The gold sector dropped 2.25 per cent per cent as the February bullion contract on the Nymex declined $9.80 to US$1,098.10 an ounce. Barrick Gold Inc. (TSX:ABX) fell 98 cents to $41.47.

The consumer staples sector was the strongest group, up 0.32 per cent. Grocer Metro Inc. (TSX:MRU.A) gained 64 cents to $39.10.

March copper dipped two cents to US$3.31 a pound.

The TSX base metals sector was off 0.62 per cent with Teck Resources (TSX:TCK.B) down $1.18 to $38.59.

Vancouver-based Corriente Resources Inc. (TSX:CTQ) agreed to a $679-million takeover by China-based Tongling Nonferrous Metals Group Holdings Co. Ltd. and China Railway Construction Corp. Ltd. through their jointly owned subsidiary CRCC-Tongguan Investment Co. Ltd.

Vancouver-based Corriente is engaged in the acquisition, exploration and development of mineral properties, mainly in South America. Among its primary holdings are the Mirador and Panantza-San Carlos copper projects. Corriente shares jumped $1.01 to $8.56.

In other corporate news, the board of International Royalty Corp. (TSX:IRC) recommended Tuesday that shareholders reject an "inadequate" takeover bid from Franco-Nevada Corp (TSX:FNV) and opt for an offer from rival bidder Royal Gold Inc. (TSX:RGL).

The Royal Gold offer values IRC at $749 million, trumping the Franco-Nevada bid of $639 million in cash. IRC shares were ahead four cents at $7.66, Royal shares moved $1.59 lower to $49.51 while Franco Nevada shares dropped 39 cents to $27.64.

Minera Penmont Inc. has sweetened its bid for Canplats Resources Corp. (TSXV:CPQ), topping an offer from rival Goldcorp. Inc. (TSX:G) as the bidding war for the junior gold and silver miner continues. Canplats' board said it had received a "financially superior" bid from Penmont which offered total consideration of $4.80 per share in a deal valued at about $277 million. Penmont's earlier bid had been matched by Goldcorp on Christmas eve in a deal that valued Canplats at about $254 million. Canplats shares gained 14 cents to $5.10 while Goldcorp was off $1.60 to $41.13.

Canadian airline stocks registered minor declines following the attempted Christmas Day terrorist attack on a Detroit-bound Northwest Airlines flight from Amsterdam. The failed airliner bombing sparked a new wave of tough security measures for travellers bound to the U.S.

WestJet (TSX:WJA) shares were down two cents to $12.44 while Montreal-based travel company Transat AT Inc. (TSX:TRZ.B) lost 16 cents to $21.04.

Air Canada's class A shares (TSX:AC.A), non-voting stock designed to be held by foreign owners due to foreign ownership regulations, were down a penny at $1.28. The airline's class B shares (TSX:AC.B), voting shares held by Canadian buyers, were ahead two cents at $1.27.

"I think travellers around the world realize that these incidents will come up from time to time," added King.

"I don't see any sort of long-term impact to air travel. I see a much greater risk to the price of oil jumping almost US$10 (recently) -- that will put more of a dent in airline stocks than anything else."

The market was also weighed down by Potash Corp. (TSX:POT). Its shares fell $2.60 to $114.50 after an analyst with Renaissance Capital said that potash prices may fall next year if a Chinese supply contract signed by OAO Uralkali fails to unlock global demand.

The TSX Venture Exchange climbed 13.45 points to 1,483.31.

New York markets were tepid even as the Conference Board reported its Consumer Confidence Index rose to 52.9, up from a revised 50.6 in November. Economists surveyed by Thomson Reuters predicted a reading of 52. The rise was fuelled by a long-term outlook on jobs that reached its highest level in two years.

The reading is still far short of the 90 that would signify a solid economy.

The Dow Jones industrial average was off 1.67 points to 10,545.41 while the Nasdaq composite index was 2.68 points lower to 2,288.4.

The S&P 500 index was down 1.59 points to 1,126.19 as the Standard & Poor's/Case-Shiller home price index showed that home prices rose for a fifth month in a row in October. But the recovery continues to be uneven with only 11 of the 20 metropolitan areas tracked showing gains.