TORONTO - The Toronto stock market closed little changed Tuesday after the U.S. Federal Reserve sent a message that it remains prepared to do what is necessary to keep the economic recovery on the rails.

The S&P/TSX composite index lost 25.27 points to 11,838.29 as the Fed said it was keeping interest rates at historic lows near zero -- and repeated its pledge to keep rates low for an extended period of time.

Investors were also relieved to see that the Fed will embark on some further stimulus to help spur an economic recovery that the Fed said has been more modest than anticipated with employers reluctant to add to payrolls.

The Fed said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help nudge down long-term rates on mortgages and corporate debt but wouldn't have a dramatic impact.

"They're trying to stay the course, trying to support the recovery that is in place," said Colin Cieszynski, market analyst at CMC Markets Canada.

"They're trying to avoid making the policy mistakes of the past, tightening too soon and sending the markets spiralling into a double dip (recession). At the same time, they're trying not to panic either."

The TSX Venture Exchange was down 4.88 points at 1,464.15.

Falling commodity prices helped push the Canadian dollar down 0.53 of a cent to 96.87 cents US.

The Fed moves took some of the sting out of a report earlier in the day that showed a sharp slowdown in imports by China.

While China's exports grew strongly in July, imports rose by just 22.7 per cent in the year to July against 34.1 per cent in the year to June. Economists had expected an increase in imports of 30 per cent in July.

Chinese demand has been one of the reasons why the global economy has largely recovered from recession. But China's monetary authorities are worried about potential inflationary pressures in the economy and are putting on the brakes, particularly in the property market.

"It is slowing but in a way we should be expecting," added Cieszynski, noting that the Chinese government made it clear earlier in the year that it was trying to slow the rate of growth.

"They were raising bank reserve requirements and telling banks to slow down their lending and what is interesting now, we're seeing that it's working."

The strong Chinese growth has been particularly beneficial to commodity prices and, in turn, to oil and mining companies on the resource heavy Toronto stock market.

The base metals sector led Toronto decliners, down 1.65 per cent as worries about falling Chinese demand pushed the September copper contract in New York down five cents to US$3.31 a pound. Thompson Creek Metals (TSX:TCM) declined 41 cents to C$9.80 while Equinox Minerals (TSX:EQN) lost eight cents to C$4.80.

The TSX energy sector lost 0.31 per cent as the September crude contract on the New York Mercantile Exchange moved down $1.23 to US$80.25 a barrel. Canadian Natural Resources (TSX:CNQ) stepped back 72 cents to C$36.13.

The gold sector was the strongest component even as the December gold contract lost $4.60 to US$1,198 an ounce. Goldcorp Inc. (TSX:G) rose 39 cents to C$41.69.

The financial sector was also weak with shares in Manulife Financial (TSX:MFC) down 26 cents to $14.01 after DBRS downgraded its long-term debt and preferred share ratings to AA (low) from AA. The ratings agency said that earnings volatility is expected to continue at elevated levels.

The downgrade follows a $2.4-billion quarterly loss that the insurer reported last week, which sent its stock down by around 14 per cent.

On the economic front, investors also took in a decline in the annual rate of Canadian housing starts last month.

Canada Mortgage and Housing Corp. said the number of starts slipped to 189,200, a 1.6 per cent decline after the agency revised the June rate upward to 192,300 from 189,300. The agency blamed the decline on a decrease in urban single starts and a reduction in rural starts.

New York markets were off earlier lows with the Dow Jones industrial average down 54.5 points at 10,644.25.

The Nasdaq composite index lost 28.52 points to 2,227.17 while the S&P 500 index fell 6.73 points to 1,121.06.

In other corporate news, Saudi Arabia's telecommunications regulator on Tuesday said it would allow BlackBerry services to continue in the kingdom, citing "positive developments" in talks with manufacturer Research In Motion Ltd. (TSX:RIM). The Communications and Information Technology Commission's announcement staves off, at least for now, a potential ban of BlackBerry Messenger in the country -- a step which officials had said was possible because of national security concerns. RIM advanced 99 cents to $57.79.

One of the largest shareholders in Maple Leaf Foods Inc. (TSX:MFI) is selling an 11 per cent stake in the big Canadian food processor. Ontario Teachers' Pension Plan says private equity fund West Face Capital Inc. will acquire the shares of Maple Leaf for an undisclosed sum. The transaction will effectively clear Teachers' holdings of both non-voting common shares and warrants in the company, and reduces Teachers' share in MFI to about 25 per cent. Maple Leaf shares gained 44 cents to $9.44.

Shares in CI Financial Corp. (TSX:CIX), one of Canada's largest mutual fund companies, were down 37 cents to $18.98 after the company reported its second-quarter profits rose to $89 million from $52.9 million a year ago. Assets under management increased to $63.5 billion from $53.7 billion.