TORONTO - The Toronto stock market moved lower yesterday as a mixed bag of US data failed to ease worries about the strength of the economic recovery.

The S&P/TSX composite index fell 45.47 points to 12,101.79 while the TSX Venture Exchange moved down 0.67 of a point to 1,688.03.

The Canadian dollar lost 0.4 of a cent to 96.71 cents US.

Markets started the session off negative as data showed that jobs in the United States remain scarce and that some companies were still cutting workers amid sluggish economic growth.

The US Labour Department said initial claims for jobless aid rose by 12,000 to a seasonally adjusted 465,000 last week after four weeks of flat or declining figures.

Many economists had expected a flat reading or a small drop.

There was increased nervousness from overseas after a closely watched reading on business activity in the 16 countries that use the euro weakened more than expected. Europe's monthly purchasing managers index, or PMI, fell to 53.8 in September from 56.2 in August.

Particularly worrying was that the figures showed growth in Germany, Europe's economic powerhouse, had moderated far more rapidly than anticipated.

Losses deepened in the afternoon despite other data which showed that US leading indicators rose by 0.3 per cent in August, suggesting modest economic growth this winter.

"Everyone is looking for reassurance," said Jennifer Lee, senior economist at BMO Nesbitt Burns. "The fact is the economy is growing but the growth is sluggish."

And sales of previously occupied homes rose by a better than expected 7.6 per cent in August to a seasonally adjusted annual rate of 4.13 million. But sales were still down 19 per cent from the same month a year earlier.

"Overall, it looks like the housing market has stabilized but at very low levels," added Ms Lee. "Any increase at this point is good news."