TORONTO - The Toronto stock market closed lower Monday as investors took a break after sending the TSX up for a fourth week in a row.

The S&P/TSX composite index closed 21.34 points lower to 11,424.61 with losses led by telecom and gold stocks.

"While I think the markets may have gotten ahead of themselves, I think the economic numbers are actually going to continue to surprise on the upside short term," said Kate Warne, Canadian markets specialist at Edward Jones in St. Louis.

"The underlying fundamentals have been quite strong."

Buying interest was weak Monday after the TSX ran ahead 1.7 per cent last week, leaving the Toronto market up just over 50 per cent since the spring rally got under way.

A stronger American currency pushed the Canadian dollar down 0.67 of a cent to 92.81 cents U.S.

The TSX telecom sector was down 1.5 per cent as Rogers Communications (TSX:RCI.B) lost 69 cents to $29.81.

The Toronto gold sector mining was off 0.65 per cent as the December bullion contract lost $5.40 to US$1,004.90 an ounce, sending the gold sector down 2.46 per cent.

The energy sector was slightly higher even as oil prices headed lower. On Monday, the October crude oil contract on the New York Mercantile Exchange fell $2.33 to US$69.71 a barrel. Canadian Natural Resources (TSX:CNQ) advanced $1.70 to $73.92.

The TSX Venture Exchange moved 16.8 points lower to 1,265.

The TSX tech sector was the strongest advancer, up 1.73 per cent as Research In Motion Ltd. (TSX:RIM) gained $1.41 to $90.67.

New York markets were mainly lower, but the tech sector rose as investors took in major deal-making.

The Dow Jones industrials lost 41.34 points to 9,778.86 ahead of the U.S. Federal Reserve's two-day rate-setting meeting, which begins Tuesday.

The Nasdaq composite gained 5.18 points to 2,138.04 as Dell Inc. said it has agreed to buy information technology services company Perot Systems Corp. for about US$3.9 billion or $30 per share as it looks to expand beyond the personal computer business.

Perot shares surged $11.65 or 65 per cent to US$29.56 and Dell shares lost 68 cents to US$16.01.

The S&P 500 index lost 3.64 points to 1,064.66.

The U.S. Conference's Board's forecast of economic activity rose in August for the fifth straight month in the latest sign the recession has ended. It says its index of leading indicators, designed to project economic activity in the next three to six months, rose 0.6 per cent in August, which followed a 0.9 per cent gain in July. However, the rise was less than the 0.7 per cent gain that economists had forecast.

Elsewhere on the TSX, the base metals sector was ups lightly as December copper was ahead two cents at US$2.805 a pound. Teck Resources (TSX:TCK.B) gained 51 cents to $29.31.

A major TSX gainer was Peregrine Diamonds Ltd. (TSX:PGD). Its stock surged 96 cents or 107.8 per cent to $1.85 after it reported the discovery "of large diamonds and a coarse diamond size distribution" during the course of drilling at its Chiliak project on Baffin Island, Nunavut.

Potash Corp. of Saskatchewan (TSX:POT) also dragged the TSX lower as shares in the world's biggest fertilizer producer dropped $1.66 to $100.21 after the company announced on Friday it was lowering its 2009 earnings target.

In other corporate news, Consumers' Waterheater Income Fund (TSX:CWI.UN) reduced its monthly distributions to unitholders by half to 5.4 cents per unit, or 64.8 cents on an annualized basis, effective with the payout scheduled for Oct. 30. Its shares were off eight cents to $4.88.

Power producer TransAlta Corp. (TSX:TA) extended its hostile offer for Canadian Hydro Developers Inc. (TSX:KHD) to Oct. 2. TransAlta shares were unchanged at $21.51 while Canadian Hydro shares edged up five cents at $5.08.