The S&P/TSX composite index fell 103.40 points to 12,473.65.
The Canadian dollar was down 0.02 of a cent at 98.31 cents US.
Statistics Canada reported that manufacturing sales edged down 0.3 per cent in March to $49.5 billion, the third decline in four months. The agency said the decline largely reflected lower sales in petroleum and coal products and the chemical manufacturing industries. Excluding those industries, Canadian manufacturing sales rose 0.3 per cent.
Overall, sales fell in 10 of 21 industries, representing approximately one-third of Canadian manufacturing.
Meanwhile, the number of Canadian houses and condos sold last month was slightly better than in March but down from April 2012, according to the Canadian Real Estate Association.
Its figures showed the number properties sold in April edged up 0.6 per cent on a seasonally adjusted basis, while the number of newly listed homes fell 0.9 per cent. CREA's home price index rose 2.2 per cent in April, the smallest gain in more than two years.
Senior investment adviser Alan Small said neither the manufacturing nor the housing numbers were surprising.
"For the most part, we're seeing a slowdown in our economy and it'll be interesting to see if our government does anything to stimulate," said Small, who works for Dundee Wealth Management Securities.
"Recently, they talked about balancing the books in the next couple of years, rather than choosing to stimulate but — if the numbers continue to show poor economic data coming out of country — maybe our government will take a different approach."
At the close, all sectors on the Toronto stock exchange were lower, with gold seeing the largest decline — more than four per cent. Shares in Agnico Eagle Mines (TSX:AEM) were down 5.62 per cent, or $1.73, to $29.03.
June bullion was down $28.30 at US$1,396.20 an ounce, its lowest price in a month.
Small said gold prices are falling because they take their cue from the U.S. economy, which is showing some signs of recovery.
"I lack to see a catalyst to take gold higher. In fact, there is definitely a case for gold to fall even further," he said. "When the (U.S.) dollar is strong, and the economy is strong, people are leaving these types of investments, like gold and silver, and buying stocks and into the U.S. economy."
The telecom sector was off 1.43 per cent, pulled down by shares in Rogers Communications (TSX:RCI.B), which dropped by more than three per cent to $48.20.
The June crude contract was up nine cents at US$94.30 a barrel, but the TSX energy sector fell by 0.88 per cent. Talisman Energy (TSX:TLM) saw its shares dip 1.79 per cent, or 21 cents to C$11.50.
July copper dipped two cents to US$3.26 a pound as the metals and mining sector fell by 0.73 per cent.
Engineering company SNC-Lavalin (TSX:SNC) said allegations about a subsidiary using a secret code to account for bribes on several projects across Africa and Asia have been resolved and are history. The company says it is focused on moving ahead with systems that would prevent the problems from reoccurring.
The Globe and Mail and CBC reported that the company paid so-called "consultancy costs" between 2008 and 2011 to win contracts for 13 development projects. Its shares were down 1.3 per cent, or 55 cents, at $41.79.
Meanwhile, U.S. indexes turned higher, boosted by a two per cent jump in the shares of department store Macy's. Search engine giant Google also saw its shares soared past US$900 for the first time on the first day of the company's annual conference. Shares in Apple Inc. fell more than three per cent, or $15.01, to US$428.85.
The Dow Jones industrial average was up 60.44 points to 15,275.69, while the S&P 500 index gained 8.43 points to 1,658.77. Both the Dow Jones and the broader market measure, the S&P 500, had record-high closes on Tuesday.
The Nasdaq also ended the day positive, climbing 9.01 points to 3,471.62.
U.S. indexes were down for most of the morning following the release of a number of disappointing economic reports, but bounced back as the signs of sluggish growth may mean the U.S. Federal Reserve will continue with its monetary stimulus program.
The Fed said manufacturing output dropped 0.4 per cent in April — the third decline in four months and the biggest since October as auto companies cranked out fewer cars and most other industries also reduced output.
The U.S. Labor Department reported the producer price index, which measures price changes before they reach the consumer, fell a seasonally adjusted 0.7 per cent in April from March. It was the second straight decline.
Meanwhile, weak economic data across the eurozone pushed European stocks lower, as news hit that the 17-country currency bloc is now in its longest-ever recession. Germany's gross domestic product rose 0.1 per cent in the first quarter of the year while the French economy has fallen back into recession.