TORONTO - The Toronto stock market closed with a small loss Thursday, pressured by weakness in mining stocks and a report that Canada is exporting fewer goods to the United States.

The S&P/TSX composite index fell 8.73 points to 12,033.53, while the TSX Venture Exchange was down 6.06 points at 1,582.00.

The market weakness followed a report from Statistics Canada that Canada's trade deficit with the world widened 50 per cent to a record $2.7 billion in July as exports to the United States fell 2.2 per cent and imports also declined.

Total export volumes declined 0.6 per cent, falling in all sectors with the exception of industrial goods and materials. Exports to the rest of the world excluding the U.S. rose 3.7 per cent.

"As the U.S. domestic demand goes, so do Canadian exports to a large extent because that's still by far our largest export market," said Gavin Graham, global strategist at Excel Funds Management. "It's all very much the weakness of U.S. domestic demand."

The gold sector was the biggest loser, falling 2.1 per cent as the December bullion contract on the New York Mercantile Exchange tumbled $6.60 to US$1,250.90 an ounce. Goldcorp Inc. (TSX:G) shares fell 87 cents, or two per cent, to C$42.79.

Gold, generally considered a safe-haven investment, pulled back after an upbeat report from the U.S. Labour Department said unemployment claims fell last week to their lowest level in two months.

Wall Street reacted positively to the news, with the Dow Jones industrial average gaining 28.23 points to 10,415.24. The Nasdaq composite index was up 7.33 points to 2,236.20, while the S&P 500 added 5.31 points to 1,104.18.

Meanwhile, the Canadian dollar continued its rise, adding 0.35 of a cent to 96.74 cents US a day after the Bank of Canada announced it would raise its key lending rate by a quarter point to one per cent, sending the dollar up by nearly a cent.

Toronto's metals and mining sector lost 0.6 per cent as the December copper contract on the Nymex fell 5.7 cents to US$3.44 a pound. Teck Resources Ltd. (TSX:TCK.B) lost 50 cents to C$38.75.

The energy sector gained 0.5 per cent even as the October crude contract fell 42 cents to US$74.25 a barrel. Suncor Energy Inc. shares (TSX:SU) gained 55 cents to C$33.76.

The financial sector was up one per cent amid hopes that an international banking committee may revise capital requirements at a meeting this weekend, freeing banks to raise dividends. Royal Bank of Canada shares (TSX:RY) added 60 cents to C$53.11.

In economic news south of the border, the U.S. trade deficit narrowed 14 per cent in July to US$42.8 billion as exports climbed to the highest level in nearly two years, the Commerce Department reported. This reflected big gains in sales of U.S.-made airplanes and other manufactured goods, while imports declined.

Canadian markets also responded to data from the Canada Mortgage and Housing Corp. that showed housing starts in August were down three per cent from July to a seasonally adjusted annual rate of 183,300. Meanwhile, Statistics Canada's new housing price index fell 0.1 per cent in July -- the first decrease in 13 months.

In corporate news, industry analysts predicted Alimentation Couche-Tard (TSX:ATD.B) would have to raise its bid once again if it hopes to beat out 7-Eleven, North America's largest convenience store chain, in its battle to acquire Iowa-based Casey's General Stores. Couche-Tard's shares lost 14 cents to C$23.05.

Methanex Corp. (TSX:MX) said it plans to spend US$40 million restart a methanol plant in Medicine Hat, Alta., that has been idle since 2001. Shares in the methanol producer added $1.18, or five per cent, to $24.68.

Miranda Technologies Inc. (TSX:MT), a Montreal-based company that provides infrastructure and monitoring systems for television broadcasters and distributors, said it has acquired British company OmniBus Systems Ltd. for $48.7 million. Shares in Miranda fell 18 cents, or 3.5 per cent, to $4.97.

And travel company Transat A.T. Inc. (TSX:TRZ.B) said its third-quarter profits tumbled to $20.9 million compared to $31 million a year earlier when it benefited form a non-cash gain related to fuel hedging. Revenues were up 5.9 per cent, boosting the company's shares by 35 cents, or 2.6 per cent, to $14.05.