The S&P/TSX composite index fell 13.04 points to 12,682.1. The TSX was weighed down by a tumble in the gold sector as strong U.S. factory orders and vehicle sales data raised traders' willingness to take on greater risk, which in turn helped send bullion prices down to almost four-week lows.
The Canadian dollar was off early highs but still up 0.17 of a cent at 98.53 cents US.
U.S. indexes were positive as the Dow Jones industrials ran ahead 89.16 points to 14,662.01 as traders looked to the February report on U.S. factory orders, which showed a jump of three per cent, the best gain in five months. The gain followed a decline in January that was revised to one per cent from two per cent.
The Nasdaq composite index was ahead 15.69 points to 3,254.86 and the S&P 500 index climbed 8.08 points to 1,570.25.
Markets also got a lift from strong auto sales figures for the U.S.
"I think the trend line is going the right way", said Chris King, portfolio manager at Morgan, Meighen and Associates.
"In essence, it says the aspects of manufacturing or auto sales combined with the housing sector and the banking sector, all the elements continue to improve in one of the most critical aspects for the U.S. and that’s the wealth effect that consumers feel."
Chrysler's U.S. sales rose five per cent in March as the company sold more cars and trucks than in any month since the U.S. went into recession in December 2007 — several months before Canada was dragged into a global downturn. Chrysler sold almost 172,000 cars and trucks in March.
GM sales also rose 6.4 per cent to 245,950 while Ford sales jumped 5.7 per cent in its best month since May 2007.
"American sales have been cruising at a plus-15 million annualized rate for the past four months and show no sign of slowing," observed BMO Capital Markets senior economist Alex Koustas.
"Canadian sales shot out of the gate in Q1 2012, and while they haven't quite kept up the near-record pace in 2013, they're still set in the fast lane cruising at a plus-1.7 million annualized rate."
In Canada, Ford Motor Co. of Canada said it was the best selling automaker in the country last month as sales of its popular F-150 pickup truck helped push overall sales up two per cent compared with a year ago to total 25,092.
Chrysler Canada reported a six per cent increase in monthly sales for March to bring its sales to 24,173 — the company's best March sales since 2000.
The gold sector led TSX decliners, down just over four per cent as the strong U.S. economic data helped push June bullion on the New York Mercantile Exchange down $25 to US$1,575.90 an ounce, taking the gold sector down two per cent. Gold prices are down about $100 year-to-date.
But the sector is down 17 per cent year-to-date as the bottom line for miners has come under increasing pressure from falling prices and higher costs to get the ore out of the ground.
"Gold is justifiably under pressure," King said.
Barrick Gold Corp. (TSX:ABX) faded 77 cents to C$38.71 while Iamgold (TSX:IMG) fell 34 cents to $6.88.
May copper was unchanged at US$3.38 a pound after closing Monday at an eight-month low. The base metals sector moved down 1.57 per cent, adding up to an 18 per cent tumble over the past year, reflecting lower demand for copper, particularly from China, amid a slow global economic recovery. HudBay Minerals (TSX:HBM) declined 24 cents to C$9.40 and Teck Resources (TSX:TCK.B) lost 48 cents to $27.82.
Industrials also weakened during the afternoon and Canadian Pacific Railway (TSX:CP) lost $2.66 to $126.34.
Utilities climbed almost one per cent as Atlantic Power (TSX:ATP) gained 33 cents to $5.07.
The financial sector was also ahead almost one per cent as Manulife Financial (TSX:MFC) rose 32 cents to $15.06.
The energy sector gained 0.27 per cent as the May crude contract edged up 12 cents to US$97.19 a barrel. Suncor Energy (TSX:SU) rose 37 cents to C$31.20.
The recovery in the U.S. has been supporting markets in the face of trouble in the 17-country eurozone, where data released Tuesday showed that unemployment in the single-currency bloc hit a record high in January and February of 12 per cent, the highest since the currency was launched in 1999.
The tiny Mediterranean country of Cyprus has also recently deepened concerns about the future of the currency union.
In corporate news, TransCanada Corp. (TSX:TRP) shares gained 36 cents to $49.65 as it begins to seek firm commitments for new pipeline capacity to move oil from Western to Eastern Canada. The Energy East Pipeline project will involve 3,000 kilometres of existing natural gas pipeline, converted to carry crude, and 1,400 kilometres of new pipeline that could stretch as far as New Brunswick. TransCanada is seeking binding commitments for delivery points in Montreal, Quebec City and Saint John, N.B.
The TSX Venture Exchange lost 20.46 points to 1,069.1.